[MightyMouse]

Originally Posted by electroniclocal »

Sorry guys, I completely disagree with most of what is said above apart from "trade one market on one chart". I am delivering a training course at the moment to convert a group of 25 previously unprofitable traders into consistently profitable ones. Its not just what is taught but how it is taught.

Comparing trading to Eric Clapton's talent of guitar playing (which he was born with) to teaching someone to ideantify order flow and react to it, is a ridiculous comparison. It may sound like a nice sound bite but is so far from reality and doesn't make sense.

Trading can and is capable of being taught. Just because you haven't been taught or you can't teach it doesn't mean it can't be done. 10% who have learned to trade and they certainly aren't all geniuses. It can be done with a group of traders at a time.

EL

The Clapton comparison is meant to show how difficult it is to become a great trader since Clapton is a great guitarist. Anyone can learn how to play a guitar and anyone can learn how to trade. But few guitarists are able to attain the status of Eric Clapton just as few traders will be able to attain the status of Great Trader.

Eric Clapton makes a fortune playing the guitar. Great traders make a fortune trading. Aspiring guitarists starve. Aspiring traders starve. need I go on? The Clapton comparison works quite well.

Is he born with it? I disagree. Clapton, Tiger Woods, Michael Jordan, Etc. are simply willing to do what it takes to be number one.

[JohnnySDG]

Originally Posted by SIUYA »

Trading like anything can be taught, its just that some people will be ok at it which usually means break even after commissions, some will make a reasonable living, and a very small few will really succeed.
As has been mentioned that you need to fit your personality and style, I am sure that not every market or style suits someone, and hence there will always be some wrong turns in the journey.
There are always too many preconceived notions that first need to be eliminated as has been pointed out. There are plenty of trained lawyers out there who are not practicing law and I reckon a few of them found out that its largely a pencil pushing job rather than the high flying court room dramas they initially believe.

Well said!

Electronic local, my analogy about Eric Clapton is dead on. Do you really disagree with that or are you just trying to get people to believe that so you can sell them training.

If it was that easy more people would do it. Its very difficult and very few will be able to make a living at it.

Now, I do believe its not hard to learn how to make a positive return on capital but to trade full time for a living is just a dream.

Johnny

[MadMarketScientist]

I think people tend to get way too absolute with this. Just because the majority of traders fail in their pursuit of the full time dream doesn't mean it's not possible. At the same time, no way can you train a group of people and have everyone end up successful. No matter how good the system or training there will be some in that group who completely butcher it. Nor does that outcome mean you cannot be trained.

I think of marketing. I once helped a friend with some direct mail and there was maybe 1,000 pieces sent out. After a few weeks she told me it was a failure. Which surprised me. I asked how many responses to the coupon she got and she said 'only' 34. Which is a 3.4% response rate which is actually fairly great. Of those 34, many turned into repeat clients and overall led to an roi that was about 10x the cost. However, she could only focus on the failure of the other 966 who did not redeem.

I think people say trading cannot be learned or there's no way to be full time since the numbers are daunting -- it is possible, but let's be realistic and admit that the majority will not -- no matter how good the marketing like the example above or how good the training is. We're just fighting human nature and behaviors in expecting absolutes/100% outcomes.

One final thought, back in the day when I was doing training, I would always survey people who attended the presentation, without fail, over 90% were not profitable despite having spent on average $2,500 or higher on training, strategy, courses, etc... HOWEVER, there was almost always 5% - 10% who were successful. Meaning it's very possible, just not easy.

Originally Posted by JohnnySDG »

Well said!

Electronic local, my analogy about Eric Clapton is dead on. Do you really disagree with that or are you just trying to get people to believe that so you can sell them training.

If it was that easy more people would do it. Its very difficult and very few will be able to make a living at it.

Now, I do believe its not hard to learn how to make a positive return on capital but to trade full time for a living is just a dream.

Johnny

[thalestrader]

Originally Posted by JohnnySDG »

...Now, I do believe its not hard to learn how to make a positive return on capital but to trade full time for a living is just a dream.

One of the best essays I ever read having to do with the real basis of the question at hand can be found at Rod Roth's blog, which I shared at the reading charts thread some time ago, and can be found here: Trader's Page

He gets to the heart of the matter when he tells us that for a long while "I understood everything about trading but I could not be profitable until I gained emotional discipline. The ability to execute a trading plan consistently is the biggest challenge in trading because it is principally a psychological problem."

He then burrows into the heart of the matter when he confesses that "There are things in trading I cannot do. It matters not that these things are efficacious and that others execute them flawlessly and make lots of money. I can’t do them because the emotional part of my brain wants no part of them. Like it or not, the emotional part of my brain heavy-handedly makes most of my decisions in a trade." emphasis added

It was not until he admitted to himself that "I’m a trader and ...I don’t like being in the market," that he was able to settle down and identify an approach that would enable him to trade for his livelihood. You see, the original question posed by the OP is tangential to the question for which he is really seeking an answer - "What kind of trader am I, and given that, what market should I trade and how should I trade it?" And the answer to this will depend upon his ability to "know thyself." You must know your own limitiations, emotionally and psychologically, in order to identify a trading program that plays to your emotional strengths while protecting you (and your capital) from you human, all too human weaknesses.

Rod Roth would not make it if he were trying to be a Curtis Faith type trend follower. At the same time, I would bet that Curtis Faith would go nuts if he were made to sit in front of a monitor shooting for less than a handful of ticks 5-10 times each day. Yet each can "make a living" trading. How so? Well, I imagine that we'd all agree that what we mean by "making a living" is simply generating sufficient current income to cover current living expenses while producing a sufficient excess current income to that can be saved in such a way as to prserve current buying power for use toward future emergencies, desires, and ultimately, a period of diminished or absent income known as "retirement." The markets can provide this in many ways, some of which are hardly "full-time." I know a trader who has generated a fabulous income for 24 years as a seller of options. Most would say he is thus a "full-time" trader. However, other than options expiration day, he spends very few "whole days" trading. I aquainted with a number of traders who successfully generate solid incomes from being glued to their screens day after day playing for anything from a few ticks per turn to trend day swings.

Is "trading for a living" possible? Of course it is! Is it difficult? Absolutely! But its difficulty is the human element with which each of us must contend, and we each must do so in our own way, for while we are all human, we each have our own set of emotional and psychological strengths and weaknesses particular to each individual.

"Full-time trading" is guruspeak. The goal is not to trade full-time, the goal is to replace income from labor with profit from speculation. The time demands such speculation requires ultimately is a function of what kind of trader you are because that wil dictate whether you are better suited to scalping, intra-day swing trading, days to weeks swing trading, or intermediate term swing (i.e. position) trading. Gurus speak to us in terms of the working man, and they sell us a dream by having us think f trading as we do our day jobs - you need so much per hour or per week and your goal should be to do it ":full-time." Non-sense. The goal is to make sufficient profit from speculation to cover current expenses and future needs and to do so with whatever time commitment is necessary to speculate successfully in the manner suited to you.

Best Wishes,

Thales

[natedredd10]

Originally Posted by Bam-Bam »

Each market has its particular characteristics and nuances.

I've always thought this to be total nonsense.."ohh i don't trade ES because YM lines up better with my S/R lines"...Probably more likely is your S/R lines are basically arbitrary if compared to 2 highly correlated instruments like ES/YM and giving such different results.
If you break it down to me you basically have a double auction market with price excited by volatility and bounded by arbitrage opportunity. The only other real variable is tick size.but that is more linked to your risk management and account size than the instrument.
We know CL and ES are double auctions..if you input the exact same volatility and arbitrage opportunity there would be no reason to watch both. Arbitrage opportunity can practically be ignored because we know these can't really be the same. So you are left with watching a double auction under different volatility assumptions.
If you are starting off why not watch ES/YM and NQ along with CL or corn or USD/JPY or all 4 to get more looks at the basket under different volatility regimes.
Or of course you can do what most do and "specialize"...
Personally, I have zero interest in being like most traders given the blowout rate and failure rate.
Why even stop there...why are you even interested in index futures at all? Not like you need the liquidity. As if the best cable futures trader in the world is somehow only making a few hundred bucks a week because of lack of liquidity.
Biggest swinger in pork bellies, oh yea hes broke because he doesn't have the liquidity of ES.
Why even trade futures and not etfs on margin?

Personally, I can't stand ES..I can't believe anyone here even bothers without maxing out liquidity on YM...For whatever reason though people are just masochists with trading and want to prove they can dance with the devil. You can't devise a harder market to trade than ES.

[MightyMouse]

Originally Posted by thalestrader »

One of the best essays I ever read having to do with the real basis of the question at hand can be found at Rod Roth's blog, which I shared at the reading charts thread some time ago, and can be found here: Trader's Page

He gets to the heart of the matter when he tells us that for a long while "I understood everything about trading but I could not be profitable until I gained emotional discipline. The ability to execute a trading plan consistently is the biggest challenge in trading because it is principally a psychological problem."

He then burrows into the heart of the matter when he confesses that "There are things in trading I cannot do. It matters not that these things are efficacious and that others execute them flawlessly and make lots of money. I can’t do them because the emotional part of my brain wants no part of them. Like it or not, the emotional part of my brain heavy-handedly makes most of my decisions in a trade." emphasis added

It was not until he admitted to himself that "I’m a trader and ...I don’t like being in the market," that he was able to settle down and identify an approach that would enable him to trade for his livelihood. You see, the original question posed by the OP is tangential to the question for which he is really seeking an answer - "What kind of trader am I, and given that, what market should I trade and how should I trade it?" And the answer to this will depend upon his ability to "know thyself." You must know your own limitiations, emotionally and psychologically, in order to identify a trading program that plays to your emotional strengths while protecting you (and your capital) from you human, all too human weaknesses.

Rod Roth would not make it if he were trying to be a Curtis Faith type trend follower. At the same time, I would bet that Curtis Faith would go nuts if he were made to sit in front of a monitor shooting for less than a handful of ticks 5-10 times each day. Yet each can "make a living" trading. How so? Well, I imagine that we'd all agree that what we mean by "making a living" is simply generating sufficient current income to cover current living expenses while producing a sufficient excess current income to that can be saved in such a way as to prserve current buying power for use toward future emergencies, desires, and ultimately, a period of diminished or absent income known as "retirement." The markets can provide this in many ways, some of which are hardly "full-time." I know a trader who has generated a fabulous income for 24 years as a seller of options. Most would say he is thus a "full-time" trader. However, other than options expiration day, he spends very few "whole days" trading. I aquainted with a number of traders who successfully generate solid incomes from being glued to their screens day after day playing for anything from a few ticks per turn to trend day swings.

Is "trading for a living" possible? Of course it is! Is it difficult? Absolutely! But its difficulty is the human element with which each of us must contend, and we each must do so in our own way, for while we are all human, we each have our own set of emotional and psychological strengths and weaknesses particular to each individual.

"Full-time trading" is guruspeak. The goal is not to trade full-time, the goal is to replace income from labor with profit from speculation. The time demands such speculation requires ultimately is a function of what kind of trader you are because that wil dictate whether you are better suited to scalping, intra-day swing trading, days to weeks swing trading, or intermediate term swing (i.e. position) trading. Gurus speak to us in terms of the working man, and they sell us a dream by having us think f trading as we do our day jobs - you need so much per hour or per week and your goal should be to do it ":full-time." Non-sense. The goal is to make sufficient profit from speculation to cover current expenses and future needs and to do so with whatever time commitment is necessary to speculate successfully in the manner suited to you.

Best Wishes,

Thales

The common themes seem to be that it can be done, but it is very difficult and most people will lose money trying.

[brownsfan019]

Originally Posted by natedredd10 »

Personally, I can't stand ES..I can't believe anyone here even bothers without maxing out liquidity on YM...For whatever reason though people are just masochists with trading and want to prove they can dance with the devil. You can't devise a harder market to trade than ES.

I couldn't agree more. The ES is a very difficult market to trade and unless you are pushing 100 ct's at a time, why force it on a market that is so hard to trade?

I will say that I've seen a shift in forums recently where there is more discussion on markets other than the ES; whereas at one point you'd only find discussions on the ES.

[thalestrader]

Originally Posted by MightyMouse »

The common themes seem to be that it can be done, but it is very difficult and most people will lose money trying.

And some would belabor the point while others would move the discussion in a direction that might help a few of the many succeed. Very few children playing little league will grow up to enjoy major league careers, but we shouldn't want to discourage the kids each from participating in the sport as far as his or her talents would allow. Why should trading be any different, especially when the odds of succeeding as a trader are much higher than the odds of a child growing into a professional athlete?

Best Wishes,

Thales