JohnnySDG

All true. But I'd like to also point out that a $2,500 account can go to $0 in 10 minutes. Johnny

I see your point. You make sense. My objective is to help people avoid the BS and scamers. I'm not saying that someone can't be successful trading. But, lets keep it realistic. I believe you are saying the same thing. Also, if you traded in the pits then you know that many guys make their money from commissions. And when they do trade it is often a hedge against their business. Johnny

Real math, not spreadsheet geometry. The MLM con men can give me that. Johnny

Cool, the guy made his money on commissions and book sales!

Yes, a spreadsheet! It will show you how to turn $1 into $1,000,000,000,000,000,000 Then you can do an infomercial!

Siuya, as an options trader I agree with you 100% about some of those option tradesI . In any business those well above average profits (in any business) are called windfalls. I agree with you about speculating for superior returns in certain situations. In a previous post I discussed my ford purchase. I agree that speculation is good on a smaller percentage of assets. My argument is that it is a foolish move when it is the sole trading plan. Johnny

Thalestrader, your post illuminates your BS. IF you are the "great trader" why do you still have a business? Second, businesses do achieve a rate of return. How do you think people value them when they are bought and sold. Look at penny stocks, they are not lying when they say something like a company has grown by 324% in one year. They probably did, they same way a guy with a $10k account can make $1500 one week. Not a realistic return with a big account. Just like the penny stock company with 324% annual growth. That company cannot be sold (other than by penny stock scammers) because they don't provide a return on investment to the buyer. If you don't look at rate of return for your business then something is wrong. You don't look at your HR spending or marketing budget, advertising campaigns, equipment, etc. and look at the rate of return to see how they are working? Its called accounting and they reason for it is to see how much money you make relative to how much you spend. There is a term for that but I forgot.....Oh wait, I remember, its called rate of return. By the way.....Did Loeb make more money from trading or writing is book? Johnny

I understand it. I just think its BS. Johnny

Most people lose - that is an undisputed truth. So are the stats showing that trading ER & ES with extreme daytrading margins is not going to work. The casino knows the "Truth" that the odds are people will lose at the tables. Yet, there are still people that go there seeking infinite yield! Johnny

Any monkey can run the numbers but the numbers have to have a basis in fact. A target yield affects those items because you need to know your break even point. Business 101 There is never a limit, but of course there are realistic expectations. Trading, speculating, investing, whatever you want to call it is based upon probability. The idea being to have a positive expectancy. Positive expectancy time frequency of opportunity is the yield. You need to realistic about PE and frequency of opportunity. Johnny

Trading is difficult even IF done with an intelligent plan because most people don't have the personality to execute properly. Your theory of trading for an infinite yield is a great way to take math out of the equation. How can you manage slippage, commission, etc when you have no target yield to speak of? I'm not saying that a target yield is a limit, but you need realistic goals and expectations. Johnny

I apologize for my vulgarity. I would like to point out a few things about my trading beliefs that may clarify anything I said. 1. I trade options. I don't trade contracts. Its my style and it works. If anyone is to be successful they need to find their own style - even if others make more doing something different. 2. I know that there are other successful traders - futures, stocks, etc. 3. 10% per week is not realistic on a CONSISTANT basis. Sure you can make big scores here and there but that kind of return is pie in the sky. My anger started when people started speaking with qualitative certainty about quantitative fantasy. 4. Most people cannot make money trading. We all know the 95% stat and its not going to change. And, they don't always lose because they don't have the right knowledge or tools, they lose because they are not cut out for it. You need a certain attitude and mindset. 5. The idea of trading is to make a rate of return. Again, a realistic one. If you want to trade full time, for your sole source of income, you need to have an account large enough for the return to equal a comfortable wage. 6. Scalping the ES or ER is extremely difficult and you chance of success is slim to none and slim has a plane ticket in his hand. 7. Commissions are a real cost and need to be considered along with slippage, bad fills, etc. (another reason for #6.) Johnny

It must be disapointing when someone points out verbal bullshit that is not backed up by real math. And, where not talking advanced calc or trig but basic +-x/. 95% are losers that is a hard fact. Many of those have ALL the tools but can't do it. The one that do are not making the kind of returns you mention. It tantamount to the BS real estate systems on tv at 2 am. I make money trading. Its what I do and have done for 20+ years so I know from experience not some jerkoff's book. I also know that the pipe dreams of trading ES and ER with stupid only- make-your-broker-money margins is a suckers play. Keep searching for the grail! Johnny

The irony is that you are dismissing what me an MM say and nonsense. 10% per week is not possible on a consistent basis. You are trying to dismiss simple math. And again, your entire post is qualitative without any figures to back it up. 60% per year is a phenominal return realized by some top traders that I know. That is where reality lies not 10,000% in a year. During the financial meltdown, I bought ford with a cost basis of around 2.20 per share and sold 1/2 the position north of $11. I still have the other half. That was an outstanding "investment" some would say great trade. You're philosophy would say great speculation. Indeed I speculated. That is not my normal play. I'm not really an active stock guy. The economy provided an easy opportunity an I took it. The reason I don't play the stock market often is because those opportunities are rare. My general trading program yields me better than 20% in most years. Can you really call that merely generating a return in excess of inflation ? Now, the irony is that even if you are correct and off-the-chart returns are possible, 95% of people can't do it. So, don't you think its better if those 95% could make a fair return on their investment than lose their money?

Well said! There is no risk in playing an amateur sport! Other than injury of course.

Best of luck to you. I you can demonstrate 10% per week for 1 year then I'll invest with you and you can keep 50% of the profits! Johnny

Cutting a loss before full stop is hit is an amateur move as is taking profit early. Except of course in certain rare circumstances. MM, your math, which points out many important factors, also demonstrates that 10% per week profit is not realistic. Cory, i'm not trying to be a dick but your drinking the kool aid here. I have some big windfalls now and again but I can tell you that most of the time you are just looking for a good overall return. Not an exponential one. Johnny

Cory, great explaination. Thanks for clearing that up. I think that 5R is WAY too optimistic. 10% per week is just not realistic on a consistent basis. a 2% per week return turns 10k into 28k in 1 year, 78+k in 2 years, almost 200k in 3 years and over 600k in 4. a 10% weekly return turns 10k into over 1.4 million in 1 year and over 200 million in 2 years!!!!!! Can't argue with simple math. Johnny

TMBTC, that is spreasdsheet math. You said risk 2% per trade but what about reward? Or are you saying risk 2% to make 2%? Either way, your example shows all winners! No possible. If you risk 2% to make 2% and have 50% winners you lose $$$ after commissions. lets say you hit 70% of your trades - you would lose 60% and make 140% for a return of 80% less commissions. But, this is not exactly correct because....... If you lose 10 trades in a row you have a 20% drawdown your 2% trade is 1.6% of original capital. Further, you do not identify tick and/or point values and commissions per trade to look at bottom line numbers. If I own a pizza shop and a pizza cost me $3 in ingredients to make and I sell it for $12 I make a 300% profit on my $$$. But what about the gas bill to heat an oven to 600 degrees? What about rent, employees, etc? No offense but your example is invalid. But kudos for talking #s and not just words. Johnny

Tams, aside from the obvious fact that everybody can't be a trader, I haven't heard one response (other than my last post) where anyone mentions the % returns needed to trade full time given a specific account size. I suggest to everyone that since trading is quantitative not qualitative that new posts in this thread actually show the dollars. Johnny

Smart people don't discourage children from playing baseball and realize they are not going pro. However, the little league fields are littered with child abuse from parents who think their kid will play in the majors. Kids being hit and riduculed right in the middle of the field during a game is rampant. How much mental and physical abuse goes on off the field by the less brazen parents? People delude themselves into thinking they can be pro traders in the same way. Sure the odds of becoming a trader may not be AS bad but it is still a 19-1 shot. There are no "secrets" to trading just like there are no secrets to baseball. But, if 100 people spent 1 year learing from the best traders in the world they would still lose. As for the eloquent definition of "making a living" you need to first make a good return on your capital than have enough capital so that % return is enough to derive an income from. My goal is 1% per month. I average 1.5 - 2.5% per month. My annual returns have been between 17-30% (Note: I do not trade every month). Now, someone wants to "trade for a living" they would need a $1,000,000 account to make a good living if they could equal my returns. With a 100k account they would make 17-30k per year - hardly a living. How can people possibly make a living with a 10 or 20k account? They would need 500 to 1000% returns every year to make 100K income!!!! Johnny

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

Well said MadMarketScientist! It is what fits you best. You can't make it fit. I would also like to add that some people are just never going to be able to do it. That is just the facts. Johnny

I agree. I was speaking about trading for ticks. Svensa, I agree that the conversation is going off topic. So I done debating you as well.

No, Svensa you are misleading the Newbies. Even if your are successful its not likely that others will be. In fact if you are a successful scalper then you should KNOW that they don't stand a chance. Lets be real, if Derek Jeter came up to you and said "I play baseball for the yankees let me show you what I do and you can do it to!". Do you really think you would play for the yankees? Very few people can trade successfully let alone scalp. That's just the way it is. Its like trying to become a pro athlete, it not something you just decide to do and can "learn" to do. You need to have the talent. With that said there are different types of trading some more difficult than others. The problem is that people say they want to "trade for a living" when they should be saying they want to be a successful (profitable) trader. The latter is more realistic although stll difficult. Johnny