Full Time Job Luck or Skill ?

[ukdaytrader]

Probably the most common question, but here goes...........This month I've been off work, so decided to take CFD's quite seriously (7.am to 10pm every day watching the market )- as opposed to earlier where I was placing a few punts here and there. I made about net gains of (after losses) £5- 6k GBP equilavent (haven't converted the US dollars) up till Friday with an initial investment of £7k GBP. I made about 150 - 200 trades in total mixture of currency, equity, options and indexs.

I'm trying to understand if this was luck or skill ? For the equities I did some analysis the same for the options (I have a spreadsheet which works out probabilities / scenarios and pricing ), but for the indexes, well I was just trading on the ups and downs during the day.

I cant help but to think the indexes were luck. Having said that I did make quite a few losses as well but net I was up.

I'm know wondering whether to gear up and turn this full time job or whether this is a stupid career move ?

Does anyone really make any money consistently ?

 

[gedward3]

Why ask when you just made yourself money.

Probably the most common question, but here goes...........This month I've been off work, so decided to take CFD's quite seriously (7.am to 10pm every day watching the market )- as opposed to earlier where I was placing a few punts here and there. I made about net gains of (after losses) £5- 6k GBP equilavent (haven't converted the US dollars) up till Friday with an initial investment of £7k GBP. I made about 150 - 200 trades in total mixture of currency, equity, options and indexs.

I'm trying to understand if this was luck or skill ? For the equities I did some analysis the same for the options (I have a spreadsheet which works out probabilities / scenarios and pricing ), but for the indexes, well I was just trading on the ups and downs during the day.

I cant help but to think the indexes were luck. Having said that I did make quite a few losses as well but net I was up.

I'm know wondering whether to gear up and turn this full time job or whether this is a stupid career move ?

Does anyone really make any money consistently ?

 

[laptop1]

You can not base you gains on one days trading. I myself trade one instrument everyday, then take the average over a month I trade the YM,I used to trade the ER2

I use the same method everyday some days it works better than other days. That's trading, all the counts is, you are profitable month end.

Good luck

 

[HaloTrader]

Probably the most common question, but here goes...........This month I've been off work, so decided to take CFD's quite seriously (7.am to 10pm every day watching the market )- as opposed to earlier where I was placing a few punts here and there. I made about net gains of (after losses) £5- 6k GBP equilavent (haven't converted the US dollars) up till Friday with an initial investment of £7k GBP. I made about 150 - 200 trades in total mixture of currency, equity, options and indexs.

I'm trying to understand if this was luck or skill ? For the equities I did some analysis the same for the options (I have a spreadsheet which works out probabilities / scenarios and pricing ), but for the indexes, well I was just trading on the ups and downs during the day.

I cant help but to think the indexes were luck. Having said that I did make quite a few losses as well but net I was up.

I'm know wondering whether to gear up and turn this full time job or whether this is a stupid career move ?

Does anyone really make any money consistently ?

Tell me a few of your trades and the basis for your entry and i can tell you if luck or skill, if you were playing bounces of trendlines, support and resistance and fibonacci - skill, if you were entering when it went down, luck and also your trading way too much money by the sound of it - You need to treat trading as a business.

 

[ukdaytrader]

On the S&P yes monitoring the movement and buying on the bottom and selling upwards. I dont use any software / trendlines / fibonaccci. But this was no one days trading it was around 12 / 15 ?. If you can upload a file I will be happy to post it up and see the comments ? Is that breaking any forum rules ?

 

[megamuel]

You started with £7k and you made £5k-£6k in about 15 days? What % of the £7k were you risking on each trade? A lot by the sounds of it. Most traders don't risk more than 5% on each trade, I'd say most risk 1%-2%. Also do you have a plan/strategy that you have been following? Or just looking at the chart and having an educated guess? If you were risking more than 5% on each trade and you didn't have a solid plan for entries and exits then I'd say it was luck. If not.... Well done!

Sam.

 

[Chartergas]

if you have a proper plan then then i would say its skill if you just guessed or used emotion luck!!

if you want to be a pro it is suggested that you want a balance of around 50K and risk on more than 10% of your account


why not take another month off and see how you get on

 

[HaloTrader]

On the S&P yes monitoring the movement and buying on the bottom and selling upwards. I dont use any software / trendlines / fibonaccci. But this was no one days trading it was around 12 / 15 ?. If you can upload a file I will be happy to post it up and see the comments ? Is that breaking any forum rules ?

Sorry but if you weren't using trendlines and fib and support and resistance, how the hell where you calculating tops and bottoms - Sounds like complete luck and you sound like your risking too much. I wouldn't quit your job yet, i can see a big loss coming for you if you don't figure out what the hell your doing... It takes a long time to know how to trade properly - like any proffesion, an ameteur who walks in gambling on random ups and downs will eventually get smoked my the pros.

 

[ukdaytrader]

In terms of cash the way I looked at it was I have around 80k cash of which up to 16k was to be used for trading. I've used about 7k of it.

My margin required at any point did not exceed 70% to the 7K I initally put in . I was quite specific in terms of the risk so had around 5 -7 positions opened which used 70% of the margin in total.

In terms of strategy I had one for equities and options which was executed relatively ok. However I cant make massive amounts on this as opportunities do not come about on a daily basis. And it would be too risky to load all my money into the few frequent opportunities that come about, besides each company takes 1 - 2 days to research and at the end of it still may not come out with a definite buy / sell strategy which means no trading.

I understand a little of technical analysis but not that much.

I basically watched the range of the index over a number of days which gave a feel for the daily volatility. e.g. On a quite day it moved 5 points in either direction for example. The aim was to choose then the lower 5 was and buy in and then sell at the higher five. Small margins only. I suppose to some extent this was calculating the 'tops' and 'bottoms' if you can call it that.

I avoid trading an hour after market opening for both the UK and US markets and also prior and post any major announcements for example US non farm payroll / employment numbers etc. The index becomes what I call directional and Im not taking a bet on the direction of the index.

So its not quite a mathematically formulated strategy, but it is a little more than random number generation.

 

[littlemog]

I'll say tell us your results in 2-3 months time and see if there's a consistency to your formula. Quantitatively, a day's not much of a sample for a good analysis. Meanwhile, all the best!

 

[fantastic]

I understand a little of technical analysis but not that much.

I basically watched the range of the index over a number of days which gave a feel for the daily volatility. e.g. On a quite day it moved 5 points in either direction for example. The aim was to choose then the lower 5 was and buy in and then sell at the higher five. Small margins only. I suppose to some extent this was calculating the 'tops' and 'bottoms' if you can call it that.

I avoid trading an hour after market opening for both the UK and US markets and also prior and post any major announcements for example US non farm payroll / employment numbers etc. The index becomes what I call directional and Im not taking a bet on the direction of the index.

Opinion from an inexperienced person in trading : as long as you make money, who cares if you don't understand technical analysis. :cheesy:

Do you mean you look to the indices daily charts, and see if the indices have been moving a lot or not. Is that what you mean 'by watching the range and having a feel for the daily volatility'? You then look for a quiet day - 5 points volatility- and this gives you the lowest price to buy?
For illustration, which indices do you look to? Nikkei? S&P?

 

[HaloTrader]

In terms of cash the way I looked at it was I have around 80k cash of which up to 16k was to be used for trading. I've used about 7k of it.

My margin required at any point did not exceed 70% to the 7K I initally put in . I was quite specific in terms of the risk so had around 5 -7 positions opened which used 70% of the margin in total.

In terms of strategy I had one for equities and options which was executed relatively ok. However I cant make massive amounts on this as opportunities do not come about on a daily basis. And it would be too risky to load all my money into the few frequent opportunities that come about, besides each company takes 1 - 2 days to research and at the end of it still may not come out with a definite buy / sell strategy which means no trading.

I understand a little of technical analysis but not that much.

I basically watched the range of the index over a number of days which gave a feel for the daily volatility. e.g. On a quite day it moved 5 points in either direction for example. The aim was to choose then the lower 5 was and buy in and then sell at the higher five. Small margins only. I suppose to some extent this was calculating the 'tops' and 'bottoms' if you can call it that.

I avoid trading an hour after market opening for both the UK and US markets and also prior and post any major announcements for example US non farm payroll / employment numbers etc. The index becomes what I call directional and Im not taking a bet on the direction of the index.

So its not quite a mathematically formulated strategy, but it is a little more than random number generation.

How much did you risk per trade, if you can't tell me, its sounds like complete gambling luck? You have to have a stop loss and know the maximum you can lose before you enter a trade and it can't be too much more than your target realistically

 

[shadowninja]

Need to trade over several months with your system. It may have been just a lucky day with the right amount of volatility and so on to allow you to profit. What you want is to hit one of those days where you're just losing money, and they will come, because then you can work out the weaknesses in your system.

Practice good money management to avoid these days wiping you out.

 

[ukdaytrader]

I was doing S&P USD 50 per point and FTSE £2 - 4 per point.

More statistics

I did 97 trades. ( a bit short of what i thought at the start, i was not counting earlier) Of which 2 were an error and 1 I accidentally doubled up as I thought the trade did not go through. I had 82 profitable trades and 15 unprofitable trades. Of the total 14 were specific equities the balance was index 's with a few currencies.

I dont use stop loss as in the past volatility sometimes wipes out the position and had it not been wiped it would have been profitable. Besides Im in the fortunate position that if I lose all the capital and then some its not a problem.

This was not all one day - it was over the last 17 days in April.

 

[chilltrader]

Let me get this straight...

- You don't understand technical analysis
- You don't use stop loss
- You don't mind losing money i.e your capital.. and then some more

Hell... this is the perfect definition of "fresh meat" for the lions in the market ! Keep 'em coming!

Seriously... stop this now completely and read through this forum for lots of excellent knowledge
articles. Probably also worth spending a couple of grand at STA to get a diploma in Technical Anaylsis - if you are really serious.

Else... just drop an email in a few months (if not weeks) time describing in detail how you blew your first account. We all enjoy reading those types of threads )

 

[alexa]

I think every system will work if you have discipline, consistancy, enough starting capital, and some luck..In that order!
I replaced yeas of indicators watching, analysis, reading, indicators, analysis....for very simple visual S&P and RSI(14) on 1hr charts and works just as well as anything else.

 

[ukdaytrader]

On technical analysis all I can say is that it is analysis of the past and at the top of the market, I bet there were not many technical pro grammes giving sell signals. I don't place much faith in technical analysis.

However if you looked more closely at company valuations for example and P/E ratios it would have occurred that valuations looked particularly high for some industries.

Currently for example there are a lot of companies with little debt and good revenues which have been driven down mainly due to market sentiment. Technical analysis wont pick up these opportunities.

Im thinking of putting all my trades on tweeter as I do them, but not sure I'd want to brag about losing lots of money, if that should happen.

Certainly not that non knowledgeable about finance, however I do wonder if anyone would admit to gains on the markets being luck more than skill.

Much appreciate your comments on the STA it will be useful to understand what the rest of traders do at the very least.

 

[shadowninja]

I dont use stop loss as in the past volatility sometimes wipes out the position and had it not been wiped it would have been profitable. Besides Im in the fortunate position that if I lose all the capital and then some its not a problem.

So, what happens if you pick the wrong direction and you're down 500 ticks for 5 months looking to take a profit of $150 (small target profit figure picked out of thin air)? Do you not intend to trade for a living?

 

[ukdaytrader]

The losses wont be that big - for example the maximum % fall in one day of the FTSE was around 11%. So a 1 in 200 year event (i.e. low probability). Therefore the largest loss on 4000 = 400 at around £2 - £4 per point = £1600. Im not going to lose any sleep keeping the positions open overnight without stop loss in place ! If I were to assume the same for the S &P 90 x 50 USD = 4500 USD.

 

[shadowninja]

So you're down £1600 for the next 5 months. Do you just keep it open? What about your income?