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edgararakelyan

How Much Profit Does the Average Successful Trader Make?

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Let's just pause here and examine what you're saying . . .

 

Supposing these traders hold three positions a day and, on average, they have two wins and one loss per day. Each trade has a $200 stop and a $200 target, let's say - does that sound fair? So they make $200 per day on average.

 

Their risk per trade is $200, and they apply the "2% rule", so they have a $10k account.

 

After a week they will have made 200 x 5 = $1000.

 

After just ten weeks, they will therefore have doubled the account to $20k.

 

After a full year they will have made a 520% return on their account if they mantain the same position size as when they started.

 

If they double their position size when they double their account they will have made a return of $310,000 after 50 weeks, or 1600%.

 

I imagine that after about ten years they would own most of the world's wealth. Not bad for "only" a few hundred per day!

 

Just in case anyone is thinking "ah, but they'd have to withdraw most of what they made to pay the bills so they couldn't compound it" you need to think again - if I could give you a system such as this are you seriously telling me that you couldn't find a way to support yourself without the trading income for 10 weeks while you doubled your account? With such a guarantee of future wealth anyone sane would go and live in a freakin dumpster for a few weeks!

 

It's disappointing to see people come here over and over again peddling the same worn out spiele . . .

 

BlueHorseshoe

 

Nobody's "peddling" anything but the truth as they know it to be. If you were an actual trader, you would know that your theory collapses in the real world. There's a practical limit to the number of contracts you can trade without getting split fills splattered all over the place, for instance. Any real trader would know the many holes in your stated theory. If it were possible, traders would be doing it..and nobody is.

 

In spite of your claims, you don't have such a system to give. Total BS crap I hear all the time. Trading is NOT a get rich quick scheme, never was & never will be... but so many traders like yourself still think it is. Worn out spiele? Maybe... but sounds like somebody's not listening.

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I think I can easily pull 50% gains a year and if you have 1:2 margin then if you get 50% of your total buying power then you are getting 100% of your actual capital. If I were to be trading more capital which I hopefully will be in a couple years and am making the same and if not more gains percentage wise then I'd be making a whole lotta money.

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Just in case anyone is thinking "ah, but they'd have to withdraw most of what they made to pay the bills so they couldn't compound it" you need to think again - if I could give you a system such as this are you seriously telling me that you couldn't find a way to support yourself without the trading income for 10 weeks while you doubled your account? With such a guarantee of future wealth anyone sane would go and live in a freakin dumpster for a few weeks!. .

 

BlueHorseshoe

 

Blue, this is complete foolishness. Everyone knows that you shouldn't trade with wifi reception; besides, it is bad from a dumpster. What you are stating is not possible.

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Nobody's "peddling" anything but the truth as they know it to be. If you were an actual trader, you would know that your theory collapses in the real world. There's a practical limit to the number of contracts you can trade without getting split fills splattered all over the place, for instance. Any real trader would know the many holes in your stated theory. If it were possible, traders would be doing it..and nobody is.

 

In spite of your claims, you don't have such a system to give. Total BS crap I hear all the time. Trading is NOT a get rich quick scheme, never was & never will be... but so many traders like yourself still think it is. Worn out spiele? Maybe... but sounds like somebody's not listening.

 

Hi Roger,

 

Your reply is rather odd - you seem to be wholeheartedly agreeing with the point I make, but at the same time trying to argue against an imaginary point in which I sincerely stated the precise opposite. It's a little confusing!

 

You are correct in stating that I do not have such a system to give, and nor do I have such a system to trade for my own benefit.

 

If you could agree that you (and the friends you mention) also do not have such a system to give (such a system being one that would allow someone with a small 10k account the percentage returns that consistent $200 per day profits imply), then I think we can be in total agreement here?

 

BlueHorseshoe

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Hi Roger,

 

Your reply is rather odd - you seem to be wholeheartedly agreeing with the point I make, but at the same time trying to argue against an imaginary point in which I sincerely stated the precise opposite. It's a little confusing!

 

You are correct in stating that I do not have such a system to give, and nor do I have such a system to trade for my own benefit.

 

If you could agree that you (and the friends you mention) also do not have such a system to give (such a system being one that would allow someone with a small 10k account the percentage returns that consistent $200 per day profits imply), then I think we can be in total agreement here?

 

BlueHorseshoe

 

Just so I understand, you're saying that the best traders can possibly do trading a $100,000+ account is to make 1 or 2 ticks per week or so? That, it's impossible to trade a couple of contracts and come out a lousy 10 to 12 ticks ahead on an average day?

 

The pessimist who can't do it and has never seen it done says it's impossible. People that do it or watch it being done consistently by others have no doubt. I don't condem the way you feel about the subject because I understand ignorance...the earth is flat and man didn't walk on the moon. Those that lack understanding because they wont even take a look...or even question...geez, it's just sad.

 

I'd be willing to bet anything that you think I'm claiming to have a trading system that enables traders to consistently win. I don't have it, you don't have it and ingot doesn't have it. And if I told you how my students accomplish it, then you'd really be confused and will stay that way until you realize that trading is a SKILL, not a system. But one thing I've learned over the past 17 years, extreme pessimists cannot be taught...at least I've never been able to.

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Just so I understand, you're saying that the best traders can possibly do trading a $100,000+ account is to make 1 or 2 ticks per week or so? That, it's impossible to trade a couple of contracts and come out a lousy 10 to 12 ticks ahead on an average day?

 

Hi Roger,

 

No, trading a 100k account ten to twelve ticks per day sounds perfectly reasonable to me.

 

Do your friends who make a few hundred a day have 100k accounts? And do you tell prospective students who have, say, 20k accounts, that they can only realistically expect to make $10 to $20 per day?

 

I'd be willing to bet anything that you think I'm claiming to have a trading system that enables traders to consistently win.

 

I don't think that - I'm just putting the reality brakes on so that anybody with a small account reading the thread (that's lots of people here, new traders especially), doesn't think they're likely to be making a few hundred per day.

 

extreme pessimists cannot be taught...at least I've never been able to.

 

That's a really interesting comment, and probably pretty on-target in my case, although I prefer 'skeptical' to 'pessimistic'.

 

BlueHorseshoe

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Hi Roger,

 

No, trading a 100k account ten to twelve ticks per day sounds perfectly reasonable to me.

 

Do your friends who make a few hundred a day have 100k accounts? And do you tell prospective students who have, say, 20k accounts, that they can only realistically expect to make $10 to $20 per day?

 

 

 

I don't think that - I'm just putting the reality brakes on so that anybody with a small account reading the thread (that's lots of people here, new traders especially), doesn't think they're likely to be making a few hundred per day.

 

 

 

That's a really interesting comment, and probably pretty on-target in my case, although I prefer 'skeptical' to 'pessimistic'.

 

BlueHorseshoe

 

Hi Blue:

 

In your experience, what could someone trading (1) ES contract with a 10K account expect to make? Assuming they know what they are doing. Big assumption I know! Using your experience with your trading, just scale up from your figures today. I assume you know what your average daily profit is? Example: you have a 100K account and make $2000 per day. That is equivalent to a 10K account making $200 per day. Thanks!

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Hi Blue:

 

In your experience, what could someone trading (1) ES contract with a 10K account expect to make? Assuming they know what they are doing. Big assumption I know! Using your experience with your trading, just scale up from your figures today. I assume you know what your average daily profit is? Example: you have a 100K account and make $2000 per day. That is equivalent to a 10K account making $200 per day. Thanks!

 

Hi Joseph,

 

I can't answer your question in the way that you would like, I'm afraid. Scaling from my own experience, daytrading a £100k (whatever that was in dollars at the time) account, the answer would be a negative figure :(

 

I haven't daytraded for several years, except ocassionally in SIM if I'm bored.

 

Swing trading I have made a 60% return in 9 months, but this was on a £12k account and I took insane risks (not using stops) that, continued over time would have cleaned out the account (and mid-way through the 9 months took the balance right back to zero). So this clearly isn't a useable point of reference.

 

If you want to scale what a "good" trader (with accountability to investors in terms of risk management) would achieve, then just go look at the better fund managers - 25-30% seems to be a good approximate guide which, in the case of Roger's discussion above, would equate to a few hundred dollars per day on a 100k account.

 

Finally, I can't scale up my live trading performance today because I haven't traded in the last seven months.

 

Sorry if that reply isn't very helpful!

 

BlueHorseshoe

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Wow I wish I could of gotten in on this one sooner. I want to answer a few things said or suggested so far. I wont take the time to respond to every post but rather just shotgun it in one reply.

 

Traders don't usually look at R.O.I.. The good ones don't look at percentage of account. I can get you 100-1000% R.O.I. on your money. I of course am only going to give you 5%. Its a fair trade off considering the banks and the rate you are going to get from the establishment. Yes I would be glad to get 100-1000% on your 2500 dollar account. And yes I am confident I can cover and do that. 5% on your investment is good don't you think? Can you live off that as a trader? Of course not.

 

So how much can you make? In order to justify the risk of trading your own account its got to be more then 80K. So 80-120K annually. And yes that takes years to do. Don't expect to do that coming out the gate. There is no way with small size you can even come close to that.

 

In your experience, what could someone trading (1) ES contract with a 10K account expect to make? Assuming they know what they are doing. Big assumption I know! Using your experience with your trading, just scale up from your figures today. I assume you know what your average daily profit is? Example: you have a 100K account and make $2000 per day. That is equivalent to a 10K account making $200 per day. Thanks!

 

10K will keep you in the game longer. I say this because I manage risk and doubt anything will be as is stated. So assuming you don't know what you are doing then you wont get knocked out so quick and might have a longer period to adjust errors and come up with solutions. Yes its possible you can get knocked out in a month just like the 2500 guy. That is if you don't trade like the 2500 guy. If you put on 10 contracts then you will be out in a month too. The real advantage you have over the 2500 guy is that at some point you and him will make an error. Say a ladder error. Or get caught in the news. Or if you are like me make an order from your chart on accident and have it cost you about 500 bucks. 500 loss on a 2000 dollar account is 25% and may not be recoverable. On a 10K account you are still in the game. This is not a bad mistake either. Say you bought that amazing awesome program that seems to work. Again 10K will allow you to trade it for a month and see or not see some results.

 

How much could I make with 1 contract on the ES? Good question. I would first of all suggest you to trade bonds and notes and not trade the ES. The bonds and notes are more stable then the ES. It is going to be easier to build your size in the notes. The notes hold with in 2 ticks and that is cheaper then a 4-8 tick stop out on the ES. The tick size is more but its more stable. I direct all new and small traders to the bonds and notes because of the advantages they have over other markets.

 

But if you insist on trading the ES and you traded the way I trade then I would bet its close to 500 a week at best. You could be between 250-500 a week. Hard to pay expenses on that. Its really hard to build size like that. In the notes you could build quicker because the stop is smaller but again there is still a time frame. And honestly its not going to be a huge difference in time one over the other.

 

Since you have 10K already its just a matter of time till you increase your size. Since you have the actual funds and you don't have to earn them per say. Building your size is the key to making more and no you don't need 100K to make a reasonable living. Chances are if you have 100K you are not using it and its better to put at least half of that money else where. 10K-20K is plenty.

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One of the major trade magazines published a study a couple years ago of the Top 10% that you always hear about - the traders who make money. This group conjures up images of yachts, mansions and parties at the Hamptons. Not really true.

 

If you toss out the outliers like Warren Buffet an the guys who end up making a dollar a year, the "average trader/investor" makes around $100,000 per year. That's probably due to a number of factors. The majority of traders are working off of relatively small accounts. This limits their profit potential from the start and most of what profit they manage to eek out goes toward paying the bills so they struggle to get ahead. Trading is a supplemental income for many.

 

The big high-roller winners you hear about usually manage to lose most of it back over time and a 500K guy ends up averaging closer to 100K. Many traders I know are happy making a couple hundred per day and they set that as their goal average.

 

That is my experience. I wish I would of read this instead of writing a novel earlier.

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This might enlighten your understanding of what a successful trader is . :)

 

[ame=http://www.youtube.com/watch?v=K4yDdt9wltw]The Fabulous Life Of Wall Street Billioniares - YouTube[/ame]

 

Just kidding, you are in the right place if you came here to learn.

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Hi Joseph,

 

Finally, I can't scale up my live trading performance today because I haven't traded in the last seven months.

 

Sorry if that reply isn't very helpful!

 

BlueHorseshoe

 

Have you given up trading?

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Have you given up trading?

 

Nope, just spent all my money on a house and then didn't get a tenant in it until last week. Should be able to start trading again in a couple of months time. The interesting thing will be to see whether I'm any better than I used to be!!!

 

If I ever give up trading for good you'll know, because I'll stop spending time hanging around on a traders forum :)

 

BlueHorseshoe

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Hi Roger,

 

No, trading a 100k account ten to twelve ticks per day sounds perfectly reasonable to me.

 

Do your friends who make a few hundred a day have 100k accounts? And do you tell prospective students who have, say, 20k accounts, that they can only realistically expect to make $10 to $20 per day?

 

 

 

I don't think that - I'm just putting the reality brakes on so that anybody with a small account reading the thread (that's lots of people here, new traders especially), doesn't think they're likely to be making a few hundred per day.

 

 

 

That's a really interesting comment, and probably pretty on-target in my case, although I prefer 'skeptical' to 'pessimistic'.

 

BlueHorseshoe

 

 

Ok, let's think this through. A trader with a $100K account trades say, oil or gold futures, as I do. Brokers often require $1000 margins/contract but some are down to $500 or less. The only logical reason for a $100K account vs. a $10K account is to trade more contracts per. If a trader can't average 3 out of 5 wins, they have no business trading. Period. I know there are some Trend Traders who sit there and lose trade after trade hoping to catch that big run to come out ahead, but that's a miserable way to trade in my opinion and certainly not what I'm talking about.

 

Ok, so your High-Roller trader places 100 to 200 contracts on a trade for 10 to 12 ticks (fills are usually going to be all over the place by the time all are in, BTW, making scalping much more difficult). If they have good Trade Management and Risk Control skills, a 2:1 or 3:1 risk/reward would be likely. Assume 5 trades are taken each day. If the 1st wins, he/she made a minimum of $10,000 minus comm. Some traders might quit at this point, but not our intrepid trader because they know this is a numbers game and the odds are skewed in their favor.

 

Let's say the first trade lost and, at worst they lose $5000 plus $500 commissions (probably much less since they'd be a high volume trader). They take a second trade. If it wins they'd net about $4000 if one lost or $19,000 if both won for the day at this point. If both lost, they'd be negative about $11,000 at worst. But this would mean that, on average, the trader would then win the next 3 trades for a net profit of $17,500 on a mediocre trading day. How would this trader ever scale this down to $200!!

 

As we all know, traders must think in terms of averages and there will be drawdown periods, of course. So traders would need to be capitalized sufficiently to allow for the inevitable. But $100,000!!! Gimme a break. If the trader is only shooting for $200 per day, then only 2 or so contracts are needed per trade if the trader maintains a 3 out of 5 average. If they cant, get out of the market until you can or dust off your resume.

 

So, BHS, you're telling me that a trader must be prepared to lose up to 1,000 trades in a row if he/she hits a "nasty" drawdown period. That's ridiculous. For $200 per day, a $10,000 account is more than sufficient. You don't even think of trading it until you can demonstrate that you can, by following your rules exactly, win 30 to 45 days in a row in simulation. Then, the trader must demonstrate solid emotional control by trading their live account for at least 30 days with just 1 contract and being profitable on 3 out of 5 trades taken. Then slowly increase # contracts while staying in their mental comfort zone (exceed it and your emotions will rush in to sabotage you).

 

In addition, all trades must have been taken and managed with zero mistakes according to the system rules. If, at any point, the account balance drops by more than 20%, all live account trading ceases and they go back on sim and start over after getting with their mentor to identify and overcome the problem(s). Pilots train on simulators, astronauts train on them as does the military. For traders, they are vital unless they are already millionaires to begin with.

 

If a trader has to burn through $100K before they "get it" then they definitely have no business trading. This would be like deciding to learn how to drive in the Indy 500 without your glasses. You'd get slaughtered.

 

Find a good system and then get on a really good simulator and practice, practice and practice. When you think you're pretty darn good, practice some more. You won't be ready to trade your live account for probably a year or more, but then, how many years does it take to become a doctor, engineer, scientist, or pro golfer? Pro level trading is one of the hardest career choices anyone can make and few manage to do it alone. There's no Holy Grail (with all due respect to Ingot) and there's no shortcut.

 

But it does not take a $100K account to get there. Most traders are not emotionally ready to accept the risk of trading 100 to 200 contracts at a time in futures. Equities, yes, probably so...but that's one of the worst vehicles any trader can ever choose to make money and would be very lucky to maintain a $200 per day average since they'd get wiped out every few years like clockwork.

Edited by Roger Felton

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Nope, just spent all my money on a house and then didn't get a tenant in it until last week. Should be able to start trading again in a couple of months time. The interesting thing will be to see whether I'm any better than I used to be!!!

 

If I ever give up trading for good you'll know, because I'll stop spending time hanging around on a traders forum :)

 

BlueHorseshoe

 

 

I doubt if you'll ever stop permanently. You have the passion. That's the one common thread among all successful traders.

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Hi Roger,

 

I roughly agree with everything in your post.

 

I hope you understand that my original comment was not about your services or your ability either to trade or to teach others to trade? These were reviewed by SIUYA in the summer and the review was relatively positive. From what I have seen myself your methods seem sound.

 

My comment was about what I felt was a willfully vague statement that invited overly optimistic interpretation from those who mightn't know better. You and I both know very well that "a few hundred dollars per day" is a virtually meaningless statement unless it is put into (at least) the context of a percentage return on capital, and (better still) a measure of risk. Deliberately vague statements such as this are a common (though subtle) sales tactic.

 

I'm still waiting for you to post a simple answer to the question of average profit expressed as an annualised percentage return on capital . . .

 

 

But it does not take a $100K account to get there.

What does it take, how long does it take, and where is 'there'?

 

BlueHorseshoe

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I've only been trading for about 8 months and thus far I have made about 30% profit of my initial capital. So I was wondering how much a good day trader makes each year? 50%, 100%, etc.

 

percentage return of your capital is one way to measure your success.

but it does not tell the whole story about your trading, nor its long term survivability.

 

as a beginner, if you make as much money as your broker, you are doing well.

 

 

 

ps. we are talking about trading, not investing. I just want to be clear on this.

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Hi Roger,

 

I roughly agree with everything in your post.

 

I hope you understand that my original comment was not about your services or your ability either to trade or to teach others to trade? These were reviewed by SIUYA in the summer and the review was relatively positive. From what I have seen myself your methods seem sound.

 

My comment was about what I felt was a willfully vague statement that invited overly optimistic interpretation from those who mightn't know better. You and I both know very well that "a few hundred dollars per day" is a virtually meaningless statement unless it is put into (at least) the context of a percentage return on capital, and (better still) a measure of risk. Deliberately vague statements such as this are a common (though subtle) sales tactic.

 

I'm still waiting for you to post a simple answer to the question of average profit expressed as an annualised percentage return on capital . . .

 

 

What does it take, how long does it take, and where is 'there'?

 

BlueHorseshoe

 

 

An annualized percentage return on capital would be very easy to calculate if you could provide me with some very basic information. Do you want the data on a consistently winning trader or a consistently losing trader? I would need the specific trader's initial trading capital amount, what trades they will take over the next year or previous...preferrably 5 years for better accuracy...including actual realized profit/loss, exchange fees, commission amount charged, etc. I can crunch the numbers pretty well but I can't guess what any particular trader is going to do or has done in the past. Get the point?

 

Never try to apply the data of one trader to any other trader. That's like having a non-handicapped golf tournament of golfers with widely varying levels of skill and experience and expecting them to all shoot the same score day after day, tournament after tournament. You won't even get two to match. It's never going to happen. Not in golf and not in trading. But some will score consistently well and some wont. Fact of life.

 

So, what would this return on capital document accomplish? In effect, absolutely nothing. It might show what is possible, but that would range from terrible to terrific. You get out of trading what you put into it...but there's more to it than that...much more.

 

What does it take, how long does it take, and where is 'there'? To answer that, this post would become a novel. As a trader you know it takes great passion and supreme effort. It takes as long as it takes but amount of effort is directly proportional to time. Finding the right path and staying on it is the hardest part. "There" can only be defined by the individual trader. What's your goal?

 

You are correct, SIUYA, spent a few days in the trading room, asked no questions and then reported his findings which were, on whole, positive. As you know, no trader or trading system can be effectively forward tested and evaluated in a few days or even months (and being clueless as to what's going on) so, even with rave reviews, it's basically meaningless. The data would be statistically insignificant.

 

No trading strategy in the world will appeal to everyone. In fact, they always work out to the contrary and that's as it should be. It has to fit. It has to feel comfortable. It has to be a natural extension of everything you know about trading. It has to work for you.

 

Unfortunately, traders generally make impulsive decisions and spend big bucks on what's popular...or what system's sales department can apply the most pressure to buy. I'm a trading education vendor,sure, but I never advertise and I don't have a Sales Department. SIUYA will attest that nobody ever asked him to do anything or buy anything. Maybe that makes me different, I don't know, but I think that's how all trading vendors should be.

 

No trading system or education vendor should ever hint, insinuate, imply or state that their system is a "Holy Grail" or will work for particular trader or their course is easy and will get them to their goals quickly. Forums are chock full of traders who fell for that bunk.

 

BHS, I appreciate your open-mindedness. For a bit of a pessimist, that's pretty commendable. I hope you don't walk away from trading. All traders hit potholes on their journey. None of my business but maybe you hit a sinkhole and have been trying to work thru it alone. That's the toughest route. Might try getting a different perspective from someone who's advice you value. Could make all the difference.

Edited by Roger Felton

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Average Winner > Average Loser = good

Average win duration trade > Average lose duration trade = good

Total Winning average > 45% = good

 

How much one makes depends on the size they trade.

 

just manage the downside risk, the upside takes care of itself.

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I'm getting much better and more profitable. When I make a mistake which I often do, I always learn from it and won't make it again. By the way I'm only 16.

 

A trading coach said to me once, "Did you follow your plan, yes or no?" As long as you followed your plan, its good, even if it was a losing trade.

 

Just keep things simple and don't over complicate an already difficult thing to do, ie trading.

 

We all make mistakes, forgive yourself and try not to do it again. :)

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A trading coach said to me once, "Did you follow your plan, yes or no?" As long as you followed your plan, its good, even if it was a losing trade.

 

Just keep things simple and don't over complicate an already difficult thing to do, ie trading.

 

We all make mistakes, forgive yourself and try not to do it again. :)

 

This is true in trading and poker, really anything with probabilities. What makes me worry is if in the long run my system is profitable, hence I wonder if I follow my plan will I make a profit or am I just lucky atm?

 

http://www.traderslaboratory.com/forums/traders-log/15435-edgars-stock-market-trading-log.html

 

http://www.traderslaboratory.com/forums/traders-log/15286-trading-aapl.html

 

These are both my logs, can you guys check if i'm trading correctly? And btw, these are all taken after market, i'm in school during market hours so I cannot post how I think and trade during the market.

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Edgar,

The sad reality of trading for a living:

 

Its funny how everyone says how much you made isnt the whole story. That is until you ask them: Im going to give you a scholarship to study with a professional trader. One makes $10million a year(no other facts disclosed) and the other makes $40,000 a year, but the 40k trader only works 1/2 a day and just follows 1 market while the 10m trader has to keep track of many.

 

EVERY PERSON WILL CHOOSE THE $10 million dollar trader. Money talks and BS walks,every time.

 

Now with that said, I think that unless you have big sums to start your account with, the most important thing is to determine what your LIFETIME EARNING POTENTIAL IS. tHIS CAn only be done be knowing what you will be starting out with and how much % you will make on that money on average every year. Period. Nothing else counts.

 

You can count pips if you like, hours per day traded, or how many times you brush your teeth per day. In the end, if you make 100% annual return, and I will even throw in that you pay no taxes, and you have a $25,000 starting account which is a bit on the high side for starting Forex accounts, and your living expenses are $28,000 per year, you will never be able to be anything but poor as your outflow is more than your inflow.

 

However in the same scenario....if you make 33.3% return on your money, but you have 10 million in your account thats 3.3 million in profit yearly. But if your living expenses are 4 million a year I will still jump into your shoes because you can always borrow, open another business, or easiest...cut out a lot of un-necessary expenses you have every month.The person spending $28k per year cant even pay for the needs he has right now!

 

In the end, unless you inherited money, you want to be able to make enough and either do 1 of 2 things- double the amount of moeny you can leave in your account so you get to be a million dolar earner. That means you need to make over 100% annually and 99% of traders will never ever be able to keep that up even if they did it one year.

 

or...you need to be able to deposit an amount of money sop large, that if you can live off 40% of that every year and be happy without touching the principle, thats OK too. The problem most traders (and pro poker players) almost alwasy run into is...............the one year you have a losing 6 months and your accct starts dwindling,you lose your confidence, you start freaking out and cutting expenses and soon you blew out your acct. Now, you may have made 2 million dollars by the time you "go thru" the million that was already in your acct, but where most traders alwasy get fatally shot is that when that year happens, you can never get back in the game..

 

Being 15 yrs in trading I would say trading is a game for the young who can blow out an acct, move back with their parents and start all over again. Or for people that already have enough to live decently on now in the bank but they want a lot more.

 

My story: I am a winning trader at this point. I cannot after 15 yrs call myself professional because my acct is to small to pay all my bills. My hope is to both double my annual return and also double my acct size thru outside work utilizing other talents, or I will eventually grow weary of trading as many have and then it becomes just a past time or hobby. See Edgar, I believe many traders we will never hear of, can crush all the famous guys out there who write books and have invented their own indicators and systems(because they cant win enough to live off of.) but they dont have the aggressive personality to get other people to fund them, or they just can never win enough for one reason or another. The sad truth is, what good is being the best in the world and making 600% annually every year,if yiou only have $1000 starting money and your expenses are over $6000 a year. Most of us reach our peak in trading sadly, far after our earning years have peaked or visa versa. Its why so many good traders have 3 hrs a day to spend posting on trading boards. They make enough to talk about, but niot enough to have a life outside trading. Trading is n ot the best choice of Profession for people who avoid reality or read too many Anthony Robbins books. That would include me to a degree.

Thats the sad reality of trading.

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WARREN BUFFETT IS THE ANSWER TO THIS QUESTION:

 

Edgar, put another way. Why do you think Warren Buffett is the most successful investor in the world in pure dollars made? I will tell you exactly why. Before I do, is anyone in this whole board been able to answer that question correctly. I have not seen it in over 25 yrs reading about "The Oracle of Omaha."

 

WARREN BUFFETT IS THE MOST SUCCESSFUL IN THE WORLD BECAUSE HE STILL LIVES IN THE SAME $34,000 HOUSE HE BOUGHT 40 YEARS AGO AND STILL WEARS A $20 TIMEX WATCH.

 

This allows him to re-invest every single dolar he makes. End of story. I so far in my 54 years, have never heard of anyone else who can or evebn wants to do that. I would not trade places with Warren for all the tea in China. A man who is that frugal obtains all of his happiness from looking at stocks morning ,afternoon at night and probbaly when he is in the shower. I would bet if you put all his exciting moments into one place, it would fill a shoe box. Warren is a genius, but a man of very simple needs. I dont think there are 3 people on this whole forum that would ever be able to live in Omaha,in the middle of nowhere and just talk to people on the phone about companies performance day and night. For most of us, suicide is a better option. The traders I have been " let in on" their stories who have tried that life, everyone became drug addicts or mentally unbalanced or sick in some way. Look at Jesse Livermore. Committed suicide as an older man in a hotel room and died dead broke. And some say he was the best stock trader who ever lived. W.D. Gann...the great math genius some say was smarter than Livermore, had to resort to selling his system one book at a time for $1500 each, to survive. Some food for thought.

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. What makes me worry is if in the long run my system is profitable, hence I wonder if I follow my plan will I make a profit or am I just lucky atm?

 

 

You're still learning and have lots to learn, everyday I learn something new, but worrying about the outcome of the trade does you no good, just focus on your trade management plan and the rest takes care of itself.

 

Breaking even is the 2nd best trade or outcome for the day. Accept it, embrace it and know that following your plan is the goal.

 

You won;t know if your plan has an edge unless you follow it consistently.

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