How long does it take before turning profitable?

Hi all,

I'm new to the board and I would like to get an idea and measure my own experience with others. I know that it depends on each individual's personality, competence, professional background, etc but would like to get a general idea how long it takes to turn consistent profits. I've been at this for 2 years and I still feel I have lots to learn (i.e. not profitable yet). Maybe I don't have what the background or personality or not enough losses to be a trader?

What was the day (epiphany) that everything just came together and made sense and never look back at up-down days into consistent profit days? I feel I may be close to reaching it but of course it could be another week, month or year!

Any comments?

Hi Bearwatch

To give us a better idea of your trading activities, What is your trading style? - intraday scalp or momentum trading, swing trading, position trading or investing?

Also, what do you trade, and how - i.e. spreadbet, CFD, emini?

Cheers

jtrader.

I trade the e-minis only recently. Before I traded stocks, didn't have the time to spend doing scans and paging through chart after chart to see when the right moment to enter.

In any case, at first I tried swing, but didn't work out too well as the gaps going against just make me too nervous to do anything rational. I decided to daytrade, thinking at least I can decide when the pain is too much for me to take. I'm very much a momentum trader. I've tried lots of indicators, methods, never one that give me enough confidence to stick with them.

I'm currently trading double-top, double-bottom and breakouts. So far, it has some success but I'm sticking with my rules to test this strategy. The only reason I think I'm getting close is I've realized it's mostly in my head, not the style or strategy. So if I can just stick to my rules and discipline, I may get the upper hand but my confidence is still not there yet.

I would like to hear some feedback whether or not it's mainly the strategy or emotions that's the reason for failure?

blimey bearwatch!!

78 July / August 2004 TRADERS´
TRADERS´: How important is the psychological element?
WILLIAMS: I differ on this from most people. I really don’t think
it is important at all. If you have a good system, one’s mindset is
not the problem, unless the trader is risking too much. That always
wreaks havoc with one’s emotional state. As a mechanical trader
it is just a question of placing orders. People who have
psychological problems trading don’t have a good system or
technique to follow. The problem is not the mind. The problem
is what you are minding in your trading.

Hi bearwatch

have you thought about trading mechanically? - this would involve learning how to program trading rules into a formula for use within a charting package such as tradestation or esignal. This would produce simple entry and exit signals that you could execute manually or even fully automate.
The benefitt of trading mechanically would be that you would have a firm set of rules that you would be trading with objectively, removing most of the subjective decision making. If you have problems with the psychological aspects of trading, a more objective approach could help. However, you may wish to still use your subjective knowledge when considering whether to take a trade around major economic news releases etc.

Trading mechanically also enables you to routinely backtest and optimise the trading system/s that you write.

I have decided that mechanical trading is how i wish to progress.

jtrader.

Juanbyte,

The problem is how do you know it's a good system? I would try one, abandon it as soon as it fails me, then onto another. I know it's down to probabilities but sometimes it might not be enough for some people, hence psychological problems.

I haven't tried mechanical trading system. Now that you mention it, I will look into this. I've just read Mark Douglas, "In the Zone" and currently taking the 20 "mechanical" trades he's advised to measure the success or probability of success of the system being implemented, applying strict rules and discipline created. I'm half-way through and it's 40% success so far. Not to say it's great but I understand it's not that bad either. We'll see how it goes toward the end of the test. I quote the word mechanical is because it's still somewhat subjective on how I perceive to be an opportunity to take the trade. Maybe letting the software take care of the trades might solve my problems then?

Do many professional traders actually use mechanical trades? I have read books on trading but no one seems to have a view/opinion regarding this, other than Ed Seykota (Market Wizards).

Thanks for the insight.

Bearwatch

What is the reward/risk and win/lose ratios of your current systems.

Bearwatch

IMHO you will only become profitable when you find a strategy that you have created for yourself. I have spent 5 years follwing so called Guru's and tipsters and trying various systems that other people have developed, with mixed results.

A few months ago I came accross these boards for the first time and from reading the wealth of experiences on here gave me the confidence to stop following others and created my own (albeit largely from ideas posted by other members for which i am very grateful) very simple strategy which is working and I am happy with.

It took me 5 years but in answer to your question it could be days, weeks, months, years... or never.

How long to reach profitability depends on your style of trading.
With scalping on interest rates I have seen quite a few people from scratch and it generally takes about 6 months before they start to make net +ve PnL's each month.

It depends on if you have mentor or are modeling (copying) other good traders directly.

If so then the learning curve drops to 3 mths to 1year.

If you are doing it the hard way. Then the learning curve is atleast 2 years. And could
be as much as 10 for some people.

The exact figure will depend on your style, how much effort & commitment you put it and
on your personality & emotional make up.

bearwatch said:

I'm currently trading double-top, double-bottom and breakouts.

Click to expand...

My advice : stick with one of these three set-ups for the time being; get to know it inside out and how (and whether) it can be traded profitably in your chosen market. Study reams of charts and see what clues can be found in the price and volume behaviour at at and immediately preceding (say) a double bottom to help you ascertain what will happen next. Once you've got a workably theory, back-test it and see if it works. It probably won't. Repeat! And if you finally manage to come up with a set-up that works in backtesting and papertrading and, god forbid, when you actually risk some money then repeat the whole thing again for a different set-up.

If this sounds like hard work, that's because it is. But until you're prepared to do it then I wouldn't hold out too much hope of ever becoming profitable.

If you still have a trading stake after two years then id say your more than likely to turn profitable. This is providing you have been active for the last two years. During that time you would have developed and then abandoned differnent trading systems, and are hopefully by now are fine tuning your system to suit your personal goals and beliefs about the market.
If you read the Market Wizards books a lot of of those blokes crashed and burned several times for many years. As long as you keep your bet size small to your trading stake whilst tuning your system then you will end up in front. The Market Wizard books are also good inspiration if your going through a 'why am I doing this?' phase.

Paul

bearwatch said:

Hi all,

I'm new to the board and I would like to get an idea and measure my own experience with others. I know that it depends on each individual's personality, competence, professional background, etc but would like to get a general idea how long it takes to turn consistent profits. I've been at this for 2 years and I still feel I have lots to learn (i.e. not profitable yet). Maybe I don't have what the background or personality or not enough losses to be a trader?

What was the day (epiphany) that everything just came together and made sense and never look back at up-down days into consistent profit days? I feel I may be close to reaching it but of course it could be another week, month or year!

Any comments?

Click to expand...

it depends

Thanks all for great varied feedback! There were many answers I didn't expect but turned the lights on in my head.

I have to say that I have doubts about my ability but always had hopes that one day it would turn around. After 2 stinking years, I've gone so far, it's so hard to think of quitting now.

But after so many mistakes (not only repeated ones) and drawdowns, I've been doing lots of soul-searching and look internally as well as my past trading records to find reasons why I made the trades I did. Some are just random, some are from a system I used, others are just impulsive,

I realized many of my trades are still very subjective. I'm thinking of opening an account with Tradestation and make a few backtest of systems I've used in the past as well as the current one (I can't believe I never tried this sooner. Better late than never), and tried mechanical (automated) trades for a while and see my results fare.

Thanks again for the fantastic feedback!

Now, a new thread or continued one, is anyone currently using automated trades with Tradestation? If yes, what are the positive and negative results? (ie. slippage, delays, partial fills etc).

Is there any other brokerage that offer similar functions? Any recommendations?