Full time traders

[hatemypips]

I know people who have been trading 10-15 years, and are still not profitable - much less consistently profitable.

For 90% of traders, long term profitability is a myth. And for probably 99% of traders, long term consistent profitability is an even bigger myth.

I know it seems like everyone on Twitter, Discord, YouTube etc is crushing it, but the reality is MUCH different.

One example: look at the results of pro traders (CTA, Hedge Funds) on sites like iasg.com, autumngold.com or barclayhedge.com. They track actual results of PROFESIONAL traders. You'll find most of these guys are not consistent, and often times not even profitable.

Trading is a tough world.

Edit: these percentages are guesses, but educated ones. I have literally spoken over the last 30 years to dozens of brokers and thousands of traders. FWIW.

If you don't have insider info you have to look for price irregularities and this is extremely challenging in markets which are close to efficient

 

[ridgeback]

@kevinkdog i agree with you, that the trading world is tough and even though I have had my share of losses, I have always managed to make and recover my money through trading. What I would like to know is that is it wise for the traders to continue trading consistently for 10-15 years without earning any profit? And when you say ‘these traders are still not profitable’ , do you imply that they are closing their trades at break even point or at losses. Because bearing losses for 10-15 years isn't ideal. And if they are inconsistent with their profit dont you think they should backtest their strategies and see why their plans aren't working most of the time?

I think if you are a loser for 10-15 years, you are not by definition a trader. Many people use "Trader" to describe themselves and it makes them feel better.
In the real world you are only a trader if you are profitable long term.
Let me ask you this, if you go to the market every day and there is a man there selling apples, he buys them for £1, wants to sell them for £3 and then ends up selling them for 10 pence at the end of the day. He does this everyday, loses money every month, would you call him a trader?

 

[kevinkdog]

@kevinkdog i agree with you, that the trading world is tough and even though I have had my share of losses, I have always managed to make and recover my money through trading. What I would like to know is that is it wise for the traders to continue trading consistently for 10-15 years without earning any profit? And when you say ‘these traders are still not profitable’ , do you imply that they are closing their trades at break even point or at losses. Because bearing losses for 10-15 years isn't ideal. And if they are inconsistent with their profit dont you think they should backtest their strategies and see why their plans aren't working most of the time?

I have seen people who are net losers over 10-15 years still try to make a go of it. They may jump from approach to approach, backtest some methods, work on their psychology, etc. and still come out losers. They don't give up, yet they are net losers. Why would they do that? Probably a million reasons, but they probably get some benefit out of losing trading that is non-monetary.

 

[kevinkdog]

I think if you are a loser for 10-15 years, you are not by definition a trader. Many people use "Trader" to describe themselves and it makes them feel better.
In the real world you are only a trader if you are profitable long term.
Let me ask you this, if you go to the market every day and there is a man there selling apples, he buys them for £1, wants to sell them for £3 and then ends up selling them for 10 pence at the end of the day. He does this everyday, loses money every month, would you call him a trader?

I would call him a trader. A pretty bad one though! If trader=profitable then there are very, very few traders out there.

 

[-Catalin-]

I had the same issue and years ago I got in touch with a guy who‘s diagnosis I didnt like at first but over the years I had to admit that he was right.

I was right not to send him a Christmas card though as he was ridiculously patronising but still, the message was right.

I was able to make money following a strategy and then give it back. At the end of the week Id calculate what my strategy should have made and compare that to what I actually made to judge my efficiency and work out ways to get better. All great so far, however, there was always another figure to take into account, what I made overall. At times i wouldn’t get a signal for ages and I found it hard to watch the market drop a few hundred points and then rally same amount without a single signal so I found myself taking trades which either didnt fully fulfill my criteria, followed social media or just made crap up. I couldnt even have these trades on the same journal because the stats at the end wouldnt teach me anything. Lets be honest thats nothing more than gambling but my desire for profits was stronger than my ability to assess the reality.

What the bloke said.....

1. I didnt fully trust my strategy and its profitability so needed to work on that. Serious bouts of testing and simplifying things meant that eventually random trades fazed out.
2. Stop looking at returns in isolation, the number is meaningless. Look instead at risk adjusted returns, as in what you put on the line to make your returns.

My thoughts ....

You need an edge. If you truly have one, all other parts of trading are easier to soldier through. If for example you have a market open breakout strategy which pays over time its within most peoples ability to wait for the market open, place the order and win or lose walk away till the next day. Its when we’re flooded with doubt that we start freestyling.

Focusing on psychology is a waste of time if you dont have an edge, if anything it can damage you.

I hope you’ll find a way.

 

[kevinkdog]

I had the same issue and years ago I got in touch with a guy who‘s diagnosis I didnt like at first but over the years I had to admit that he was right.

I was right not to send him a Christmas card though as he was ridiculously patronising but still, the message was right.

I was able to make money following a strategy and then give it back. At the end of the week Id calculate what my strategy should have made and compare that to what I actually made to judge my efficiency and work out ways to get better. All great so far, however, there was always another figure to take into account, what I made overall. At times i wouldn’t get a signal for ages and I found it hard to watch the market drop a few hundred points and then rally same amount without a single signal so I found myself taking trades which either didnt fully fulfill my criteria, followed social media or just made crap up. I couldnt even have these trades on the same journal because the stats at the end wouldnt teach me anything. Lets be honest thats nothing more than gambling but my desire for profits was stronger than my ability to assess the reality.

What the bloke said.....

1. I didnt fully trust my strategy and its profitability so needed to work on that. Serious bouts of testing and simplifying things meant that eventually random trades fazed out.
2. Stop looking at returns in isolation, the number is meaningless. Look instead at risk adjusted returns, as in what you put on the line to make your returns.

My thoughts ....

You need an edge. If you truly have one, all other parts of trading are easier to soldier through. If for example you have a market open breakout strategy which pays over time its within most peoples ability to wait for the market open, place the order and win or lose walk away till the next day. Its when we’re flooded with doubt that we start freestyling.

Focusing on psychology is a waste of time if you dont have an edge, if anything it can damage you.

I hope you’ll find a way.

This ^^^^^

I always tell people:

No edge (profitable strategy), bad psychology - YOU LOSE
No edge (profitable strategy), great psychology - YOU LOSE
Good edge (profitable strategy), bad psychology - YOU LOSE
Good edge (profitable strategy), great psychology - YOU WIN (but it will still be hard)

 

[ridgeback]

Also many become obsessed with their "system" when actually money management, targets, drawdown management is probably more important. The money management has to fit you before the strategy and I think that can only happen through experience. When it all fits together you become consistently profitable.

 

[RachelFX]

Hi all, Is anyone here a full time trader. I've been at this for about 5 years on and off. Never able to make profits. I never lost anything but I never made anything either. One of issues I keep running into is I make trades, make some money. Then flow up with bad trades always coming up to 0 over a period of time. For those you who are profitable and I mean over a long period of time, how did you solve this problem.?

Link up your account to myfxbook and review evey 20 trades.
One other questions are you using a good RRR?

 

[sharabela]

I have been able to make money by Forex trading, but I am still not a full time trader. I have been going slowly with my investment. I have a part time job, which gives me a consistent income. Yes, I do have a plan to be a full time trader and depend on it completely. It may take another year or two.

 

[pezza55]

I understand where you're coming from. I think you need to look at your risk to reward ratio. With each trade you should have a calculated risk so if things don't go to plan you only lose a small percentage of your account. I usually look at around 1-2% of my account on each trade. It's better to achieve small profits consistently then it is to make big wins and large losses which counteract each other.

 

[Farm Yard Forex]

You're already half way there if you are at break even! You're likely right on the precipice of becoming profitable with slight tweaks. Could just be a small adjustment to the risk reward of your trades that makes a difference

 

[-Catalin-]

Having an edge is important but it is not the only thing that matters. You have to agree that many traders don’t even know what edge is let alone using it in their trading, but I’ve still seen these people making profits. It’s good to work on making an edge but psychology is also equally important.

The foundation of long term profitability has to be an edge, otherwise I’d like to know how anyone would apply good money management or psychology to turn a profit from a negative expectancy game.

Over a small number of observations anyone can win. At a horse race meeting, I once won big in 4 races out of 6 and fools around me started thinking I was gifted. Luckily I was already bruised by the random outcomes stick by then and knew to enjoy my luck and not think of the title of my new book.

I guess its subjective but for me keeping the mind ticking right is easier with an edge. When i thought I had to constantly partake and chased every shiny object with no proven edge in at least half the trades I was taking, making sound decisions was nearly impossible and very confusing. The stress and the pain was ridiculous.

Or maybe our definition of edge differs. For me, edge means having positive expectancy while entering and exiting based on rules. How I feel and think doesnt come into it.

 

[Hency Corniey]

I also want to be a full time trader. Can you please help me here. How much time should I give per day? Thank you so much!

 

[pathsofglory]

I think more than time, what matters is the sincerity with which you approach forex trading. You can spend 15-18 hours a day and still get nothing out of it. On the other hand, with the right method even part-time traders can earn more than full time traders. To make your time and practice worth it, learn from mistakes and keep working on your loopholes.

 

[TickCOM]

Then its long overdue to change what you are doing, which can be; the asset class you trade, the time-frame, the trading platform, the trading method (discretionary/automated/semi.

 

[dusktrader]

On-and-off for years trading, that kindof sounds like me. I expend so much energy toward trading, it seems. But at some point (at least in the past) I've hit energy exhaustion and just pushed "pause" on trading for months at a time. Then life travels down a different path, and then later it circles back to trading. So I get it. But have you noticed in each trading "cycle" that you are getting better and better?

I started measuring the "better" and this gives me confidence. I can say without a doubt that this is the first year I feel like my trading is the best it has ever been, and I'm also more addicted than ever because this year I think I discovered some clues to consistency. I can see it in the numbers now, and that makes my belief and motivation stronger than ever.

 

[Smith2525]

It's a side gig for me but I have friends that do it full time and are genuinely profitable. You reap what you sow.