39 live trades. However, I've done 5 1/2 years of backtesting which involved 286 trades (about one trade per week) and showed an average yearly return of about 50%, with 10.2% maximum drawdown. The model has no free parameters except for buy/sell thresholds, which are determined via backtesting. (When an indicator exceeds one threshold I go long, when it drops below another threshold, I exit the long. Similarly, for shorting.)
How long did it take you to realize that you will never be profitable trading
39 live trades. However, I've done 5 1/2 years of backtesting which involved 286 trades (about one trade per week) and showed an average yearly return of about 50%, with 10.2% maximum drawdown. The model has no free parameters except for buy/sell thresholds, which are determined via backtesting. (When an indicator exceeds one threshold I go long, when it drops below another threshold, I exit the long. Similarly, for shorting.)
samfarrell
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It sounds like you were not successful so therefore no one else can be?
I suppose thats a natural human reaction to failure
Most traders will not be successful, that is true. But there are always going to be exceptions or outlyers to any statistical sample, always
Unless you are just incredibly lucky, there is no way to avoid some trades gapping against you. Nor can you really control whether it will be a 2R or a 5R loss.
Like you said, time will tell.
As I am sure you know, some edges exist only during certain times (until enough people catch on). And when that edge is gone all of a sudden, there is (typically) no way to know that it's gone. Especially when a trader has strong conviction, they'll keep trading the same setup even after there is no edge there anymore. I've definitely seen it happen.
But I honestly hope that you have a means to prevent that. Best of luck!
Anything is possible, I only consider my point valid until proven otherwise.
Like I said in one of my previous posts, I believe there is only two types of edges in directional trading. And those edges aren't really big enough to do anything with for a typical retail trader.
I did find many retail traders who are profitable consistently. Though all of them (no exception) make their money via marketing, teaching, and/or other side business.
I've also seen many many "traders" online who claim absolutely insane profitability daily. I've seen the same pattern with all of them: they claim to be purely discretionary traders when it comes to entry/exit and size; absolutely no consistency - all based on discretion. Which is just one of the huge red flags. And then, of course, all of them do some sort of marketing "on the side".
It is not possible to "crack the markets". Any real successful trader (not retail) usually says that they've been a student of the markets their entire life time, which I completely agree with.
I completely agree that there will always be outliers, though they are probably somewhere in the 1% (or less).
Just because I am not successful, doesn't mean others can't be successful IF I see others who did succeed. I've never seen a successful retail trader. Maybe there are some exceptions, like you mentioned, but they are the outliers. That is exactly why it's safe to assume that everyone reading this thread is probably not one of the rare outliers.
dbphoenix
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1. Depends on what you're trading. If you don't like gaps, trade futures. I trade the NQ.
2. Losses are controlled by exiting the trade when it is no longer doing what one expected it to do, all of which is a function of the trading plan. If the trading plan does not address trade management in detail, it won't be of much use, if any, when it needs to be.
Perhaps you need to re-examine how you're defining risk and reward.
samfarrell
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Isnt it amazing how few people succeed when it is this simple !
dbphoenix
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Actually, yes, it is. But the admonition to cut one's losses short is nothing new. If one won't do it, he needs to figure out why.
samfarrell
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I wasnt trying to be sarcastic at all. I agree with the concept
dunitatlsatrodney
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Everyone's a legend.....
You can control your losses with robot-like discipline, never make any mistakes at all, avoid ALL market gaps against you... and still that's not enough to be profitable.
There has to be risk management AND an edge. One doesn't work without the other.
And even when there is an edge and risk management, the smaller the edge - the more your strategy relies on pure luck.
Combine a small edge with human error, slippage, occasional losses bigger than 1R - and the edge is completely gone.
darktone
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Rex, you can trade in a way so that the only slippage you see is favorable. You can take and manage top n bottom plays with no confirmation. You can comfortably trade without stops.
But you have to realise and that you're not really trading the market, you're trading yourself. You'll find your edge in the mirror.
But you have to realise and that you're not really trading the market, you're trading yourself. You'll find your edge in the mirror.
That's pretty deep!
I'd say once that happens (once you see your edge in the mirror) you won't necessarily need to trade at all to make money :cheesy:
how long toes it take to realize that i cant be a profitable trader? thats one weird question, usually if people realize it they wont even bother coming back here to answer lol, but in my 5 years maybe 6 trading im still here trying to make a decent buck out of my HF accout so i guess. i am no where realizing such thing.
samfarrell
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yeah look most people who trade dont have much of an idea what they are doing. It takes years to master any discipline. People sit down to trade and think with a few charts and a trend following plan they will be profitable. They have no understanding of implied volatility, probability of a move, market liquidity.
They may as well go to the casino
Good point. I was probably hoping someone would prove me wrong. But so far all I am seeing is the same old story.
And you probably know a guy who knows a guy who is a trader who understands all these things and makes a million bucks a month. So far I've only seen people who fail as traders in the long run, even if they do succeed in other businesses.
dbphoenix
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If you limit your contacts to those you make on trading forums, then you likely won't come across many successes.
And, in the end, what difference does it make? Whether or not somebody else is successful means nothing with regard to your success or lack of it. There are only a couple of questions that matter in your situation:
1. Did you have a robust trading plan? If not, why not?
2. If so, did you have the discipline to follow it? If not, why not?
Your success or failure is entirely your responsibility, not books or DVDs or courses or vendors or brokers or even the market. If you seek to rationalize and justify your failure by looking outside yourself, you will have learned nothing.
piphoe
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tar
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deep, yes? KNEE DEEP
Fight ? :cheesy:
samfarrell
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Can i ask, how long did you spend trading ?
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