FAQ How Difficult is it to Trade?

[meanreversion]

Re: How difficult is it to trade?

There's a poll at the moment asking how many people are actually active full time traders making a living at it. The answer is anyone's guess. It might be a lot less than we think. only 19 (50% of people who answered the poll) say they are, but almost 1000 people have read the thread - so assume the rest of the 1000 are people who are trying but not succeeding, that's 1 in 50.

That was my poll. My guess before I started that was 1 pct, so 1 in 50 sounds like it might be about right.

There are 6 of us in our central London office, we are all self-backed and full time. When we started off, there were 2 and I thought getting additional joiners would be easy, but it took much longer than we thought.

 

[shakespeare515]

Re: How difficult is it to trade?

The way I see it, is that most traders fail because it is TOO EASY to open a forex trading account.. One opens the account makes a few pips on demo, then goes live.. Then proceeds to overleverage, ignore stoplosses and is out of the game in a week or less. That trader becomes a statistic. I would guess that if you only asked traders who have received proper training the percentage would be much higher.. And I doubt there are many successful traders on this board.. WHy would they be here? This board is not a good place for that poll because there is not a good representative sample of the trading community on this board. It's is mostly a bunch of new traders trying to be successful without paying for proper training. Good luck to you!

 

[meanreversion]

Re: How difficult is it to trade?

My 2 cents worth on why trading is difficult -- it runs counter to human nature to a) want to be right and b) want results quickly. Wanting to be right leads to taking profit too soon and not getting out of losing positions when you should (a perfect example of this is a "Holy Grail" thread on this site which was recently closed -- the threadstarter's only interest was 100 pct winning trades and of course he ended up wiping his account).

Wanting to see results quickly results in trading without a plan, overtrading and risking too much of one's capital, all fairly dangerous practices.

 

[meanreversion]

Re: How difficult is it to trade?

38 steps to becoming a trader --

1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence.

Fear starts setting in.

8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

Most people will give up at this point, as they realize work is involved.

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.

 

[Dunecat]

Re: How difficult is it to trade?

I think this can be summed up pretty quick. The main purpose of the stock market now is to transfer money from shareholders to management.

I think this is pretty obvious, from the way managers of mutual and hedge funds can take huge leveraged bets with other people's money will little fear of repercussion. I don't even need to justify this, the last recession was a great example. Heads, the managers rake in commission in real money from paper profits, tails, the ultra leveraged bets(which is pretty much all they are) fail miserably, and the manager still walks away with past commissions of up to and over 20%. But as long as everyone else fails, to them it is fine. I don't know about you, but this seems like good work if you can get it.

So from the nature of the reckless bets placed on wall street, with little or no real science behind them, I would rather rephrase the question. How hard is it to make a bet?

 

[Miss Tint]

Re: How difficult is it to trade?

I am quite new to this arena of trading but from what I have observed so far, Shakespear has summed it up quite nicely. From those mentors I have been following to help me acquire the skills and knowledge I need to succeed, I also notice that the greater the humility of the trader, the greater the appreciation they have to continue to learn and expand themselves from others rather than suffer from an overinflated ego and stop learning altogether.

Good solid info in your reply Shakespear; thankyou!

The difficulty depends on the trader. Everyone has strengths and weaknesses. you never know what yours are until you try. Most people can understand the setups, it's the discipline that gets most people. And you cant tell who will have good discipline from the beginning. I have seen people I would have never guessed would be good traders, and they turn out to be fantastic. It has nothing to do with intelligence. More to do with humility.

But with a good mentor. It gets a LOT EASIER!

...good trades,

Sam

 

[littlebopip]

It's not difficult to come up with trades, what's difficult is handling the losses. Haha

 

[fayalac]

I understand the joke, but that is preciselly the fear...., its not difficult what is really dificult is to beat your mind...., the rest is easy

 

[Ambrose Ackroyd]

1. A decent strategy

2. A set of rules

3. Discipline


All that is needed is the 3 to implement 2 relating to 1.

 

[Pazienza]

Trading is extremely difficult. My approach is also extremely simple, despite the fact that it's entirely discretionary.

The main difficulty is maintaining the patience to only take good trades. This is easier than it used to be but can still be extremely hard at times. This week was a good example.

I got about 0.5R from a trade that (had I simply followed my exit strategy) would have yielded over 4R. 4R is plenty for an entire month.

To make matters worse, there was no good excuse for not following my strategy, I simply became distracted, moved my stop, and the rest is a painful history.

Since then I have had 3 trades all of which ended up at break even because I followed my strategy.

I now have two devils. The first is the temptation to abandon my exit strategy, and the second is the desire to trade to make up for the money I did not make.

Patience and discipline is what it really comes down to.

Trading is simple. The best way to make it easy, or at least easier, would be to not need to trade.

 

[tim3]

Bottom line when trading (how many times have you heard that) is you are betting on a number (the index /share price ect)

You are betting that number A (your target/limit order) will be reached before number B (your stop)

Next find good probability trades and employee good money management.

Sounds easy but it is not. phychology plays a massive part in trading anyone who does not believe that should read the disciplined trader by mark douglas.

I believe the human mind is actually set up to fail at trading (letting losses run in the hope they will come back ect)

Just my (very) humble opinion.

 

[rkripal]

Trading is not that difficult if one has a well backtested plan and trade it like a machine.

 

[Chartsy]

The key is;focus. Most on this forum are failures because they flit around and arrrrrrrround , one minute with pin bars, once they haven't even broke even with that, not to worry as there's a nice little quick 5 pips per day system you think you saw last week while googling.

GET A FOCUS! whether it's discretionary S/R, a mechanical strat, pin bars, stick with one thing dammit. I can't believe how much focusing on a handful of setups, documenting results , and not giving up after 5 losses, has improved my trading.

 

[Jason101]

It’s very easy and its boring and time consuming.

The trouble is that to do it right you risk 1-2% of your account, to get the same sort of return. So your return is relative to the money you already have.

If you do not have much money (account size) then it is hard to bother with for the time spent. Money is relative so I would imagine the same is true for a very wealthy person.

A lot of people are attracted to trading with ideas of excitement and making big money fast.

When the realities of a marathon and the non-existence of the quick sprint kick in, people find it hard to accept. So they either risk to much size or go on a continual search for new methods known as the holy grail, or find some other way to blow up, or they never really fully commit to the account size and time needed.

 

[robster970]

Trading is like making love to a beautiful woman.

Let the lady in question come to you. Then time your entry to perfection using a decisive move that demostrates commitment and conviction. Stay in for as long as you can using a great degree of skill and self-control. Finally take an exit and well earned reward.

This is why scalpers make terrible lovers.

 

[Madisonsdad]

I’ve actually adjusted my work schedule to leave earlier JUST to avoid “the crazies” on the road. You know, the drivers that make the evening commute feel more like an episode of The Dukes of Hazzard?!? I was able to access the best mix of streets and freeways and rode the crest of the traffic wave instead of being stuck in the middle of it.

This strategy worked because I had total situational awareness of the risk involved with traveling and made the necessary adjustments down to the time and route to take. So much so, that I knew if I was 10 minutes late getting out the door I was in for a white-knuckled thrill ride.

Properly trading futures is not far from this seemingly dissimilar analogy. Futures in my opinion have received its “boogey-man” reputation out of a natural fear of losing your money, but that happens largely in part to not properly assessing risk. Plus there’s such a total lack of understanding in the trading community as to why markets move in the first place. Once this instrument is put in the proper perspective and executed appropriately, it becomes more attractive than just about anything else out there. It has a much lower barrier to entry than whole shares and the fact that it’s leveraged is a plus, but only when that’s properly applied.

This approach has been working for me like clock-work regardless of market condition.

 

[t2w34035]

It’s very easy and its boring and time consuming.

The trouble is that to do it right you risk 1-2% of your account, to get the same sort of return. So your return is relative to the money you already have.

If you do not have much money (account size) then it is hard to bother with for the time spent. Money is relative so I would imagine the same is true for a very wealthy person.

A lot of people are attracted to trading with ideas of excitement and making big money fast.

When the realities of a marathon and the non-existence of the quick sprint kick in, people find it hard to accept. So they either risk to much size or go on a continual search for new methods known as the holy grail, or find some other way to blow up, or they never really fully commit to the account size and time needed.

Riding a bicycle very easy, too -- after one has the right equipment, time to practice and learns how to do it. :idea:

 

[NVP]

well - the answer is not in get rich quick seminars so dont waste your money
N

Trialling 'learn to trade' stock market websites: can you get rich quick? | Money | The Guardian

 

[gregkevin]

: In essence, Learning forex its easy, but mastering its the Hard Part. You can learn the basic rules, technical analysis, fundamental analysis, candlestick, pivot points, time frame, trend lines, Fibonacci, support & resistance, price action, leverage, money management and position sizing, you can even Learn a hole system and methodology to trade mechanically and even with that you can lose money.

 

[amazingfx]

Trading Forex is not an easy task if your aim is making a consistent profit over time. And it takes quite a long to achieve this goal.