How long does it take to become a successful consistant day trader?
JTrader
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In my opinion, iIf you have discipline, a consistent and dependable trading strategy and the right equipment, I think it's possible to become a consistent and profitable day trader from day 1.
I think it is a good idea to know as much as possible before contemplating this especially when you have adult responsibilities such as mortgage etc.. The more knowledge you have beforehand the less you will need to learn after setting up as a day trader, the less mistakes you will be likely to make, and the more informed a decision you will be able to make as to whether you really want to do it. I think that any full-time and dependable job should not be given up lightly.
Following the markets on an EOD basis, observing and learning is how I gain a feel for things.
Practice is the only real way of knowing if you can be successful and this is very hard if you work full-time, unless you can use holidays etc. to trade.
I think it is a good idea to know as much as possible before contemplating this especially when you have adult responsibilities such as mortgage etc.. The more knowledge you have beforehand the less you will need to learn after setting up as a day trader, the less mistakes you will be likely to make, and the more informed a decision you will be able to make as to whether you really want to do it. I think that any full-time and dependable job should not be given up lightly.
Following the markets on an EOD basis, observing and learning is how I gain a feel for things.
Practice is the only real way of knowing if you can be successful and this is very hard if you work full-time, unless you can use holidays etc. to trade.
You have to treat trading as a business like any other. Starting up you'll have to put in long hours and expect adversity -- you'll be competing against the best traders and they are usually on the opposite side of your trade and don't care if you go broke.
Most of the time taken in getting up to speed really involves figuring out yourself -- what time frame do you want to trade? How much can you risk on each trade? How much capital do you have? Then you have to focus on a particular trading style and become proficient at it. Figuring out your own personality could take a couple of years but specializing in a trading style, in my experience, doesn't take that long once you know your own weaknesses and strengths.
My progress jumped dramatically when I started to study books on trading and sports psychology. Most technical analysis has been around for decades and is not that complicated. Learning how to accept losses, understand probabilities, focusing on one trade at a time, etc. is far more important than studying endless charts and fibonacci numbers, etc.
Most of the time taken in getting up to speed really involves figuring out yourself -- what time frame do you want to trade? How much can you risk on each trade? How much capital do you have? Then you have to focus on a particular trading style and become proficient at it. Figuring out your own personality could take a couple of years but specializing in a trading style, in my experience, doesn't take that long once you know your own weaknesses and strengths.
My progress jumped dramatically when I started to study books on trading and sports psychology. Most technical analysis has been around for decades and is not that complicated. Learning how to accept losses, understand probabilities, focusing on one trade at a time, etc. is far more important than studying endless charts and fibonacci numbers, etc.
JTrader
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At a recent moneyam traders day that I attended, I think the speaker said with regard to SETS stocks, that approximately 85% of trades/traders in the market are done by computer, 12.5% by professional traders and 2.5% by day traders at home. Adding that the computer traders can predict the short term trend, where as we at best can only guess. Meaning that the competition is tough.
Not sure how accurate this info was, just repeating what I heard.
Not sure how accurate this info was, just repeating what I heard.
PurplePerson
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Blash,
Dax puts it well:
"..Most of the time taken in getting up to speed really involves figuring out yourself -- what time frame do you want to trade? How much can you risk on each trade? How much capital do you have? Then you have to focus on a particular trading style and become proficient at it. Figuring out your own personality could take a couple of years but specializing in a trading style, in my experience, doesn't take that long once you know your own weaknesses and strengths..."
I quit work just before Xmas 1997 and downsized to a barely habitable house to release capital. I didn't have a PC with net access till Easter '98. So my first full year of actual trading from then was an erratic one in which an initially level market fell by a fifth (Oct 98) and then rose by a third from there to Easter '99. At that stage I had very little idea how to cope, so my fortunes soared and plummeted repeatedly, making my own early history very little use as any sort of pattern for others(!).
Prior to quitting work I was a smalltime investor (via investment trusts mainly, within PEPs) from about 1994, and only able to monitor progress via teletext and the FT. So the switch into active trading was a leap of faith based largely on articles I'd read. With no dependents and no debts, my position was wholly different from that of many who might not dare risk such an adventure.
My preferred approach has been:- Keep it simple!
Don't get sidetracked by excited BBers suggesting all sorts of exotic alternatives to basic share trading. Forget about warrants, options, futures, CFDs, foreign stocks, Ofex, whatever, and focus on readily tradeable uncomplicated UK stocks. There are more than enough to be going on with. In my opinion the best approach to learning any new business is to eliminate as many unnecessary variables as possible - otherwise it becomes impossible to fathom which part is wrong. Get the system working before adding any fancy activities. The only activity I have branched into so far is spreadbetting, in order to take advantage of downward markets. Last week I glanced again at warrants and decided I was happy to push those aside for at least another year.
Likewise with t/a.
I do use charts a lot. Sharescope mainly. I use candlestick patterns, MAs, rsi, sometimes macd, and a handful of the most common chart patterns. But I happily dismiss elliot wave theory as being a hobby for anoraks (far too much effort, for results that merely trigger further debate, ad infinitum) along with many other aspects of 'doilyism' (throw a perforated paper doily onto any chart and be amazed at how many patterns coincide. Go on from there to develop a religion based on these miraculous discoveries. Thousands of believers will indeed follow).
OK - so maybe my cynical dismissal of certain approaches means I'm missing out. But it doesn't seem to matter
Like Dax says - it's finding out about yourself that matters. I've sussed what works for me, and it provides me with a low-stress methodology that I'm happy with. I don't knock those who choose a more complicated route. Well..., apart from a little tongue-in-cheek mockery ;-)
My personal weaknesses include indiscipline and occasional lapses of concentration (eg: waffling on here when I should be monitoring my trades). My approach seems to accommodate that. I imagine that I would come a cropper if I tried using some of the more highy refined systems.
Dax puts it well:
"..Most of the time taken in getting up to speed really involves figuring out yourself -- what time frame do you want to trade? How much can you risk on each trade? How much capital do you have? Then you have to focus on a particular trading style and become proficient at it. Figuring out your own personality could take a couple of years but specializing in a trading style, in my experience, doesn't take that long once you know your own weaknesses and strengths..."
I quit work just before Xmas 1997 and downsized to a barely habitable house to release capital. I didn't have a PC with net access till Easter '98. So my first full year of actual trading from then was an erratic one in which an initially level market fell by a fifth (Oct 98) and then rose by a third from there to Easter '99. At that stage I had very little idea how to cope, so my fortunes soared and plummeted repeatedly, making my own early history very little use as any sort of pattern for others(!).
Prior to quitting work I was a smalltime investor (via investment trusts mainly, within PEPs) from about 1994, and only able to monitor progress via teletext and the FT. So the switch into active trading was a leap of faith based largely on articles I'd read. With no dependents and no debts, my position was wholly different from that of many who might not dare risk such an adventure.
My preferred approach has been:- Keep it simple!
Don't get sidetracked by excited BBers suggesting all sorts of exotic alternatives to basic share trading. Forget about warrants, options, futures, CFDs, foreign stocks, Ofex, whatever, and focus on readily tradeable uncomplicated UK stocks. There are more than enough to be going on with. In my opinion the best approach to learning any new business is to eliminate as many unnecessary variables as possible - otherwise it becomes impossible to fathom which part is wrong. Get the system working before adding any fancy activities. The only activity I have branched into so far is spreadbetting, in order to take advantage of downward markets. Last week I glanced again at warrants and decided I was happy to push those aside for at least another year.
Likewise with t/a.
I do use charts a lot. Sharescope mainly. I use candlestick patterns, MAs, rsi, sometimes macd, and a handful of the most common chart patterns. But I happily dismiss elliot wave theory as being a hobby for anoraks (far too much effort, for results that merely trigger further debate, ad infinitum) along with many other aspects of 'doilyism' (throw a perforated paper doily onto any chart and be amazed at how many patterns coincide. Go on from there to develop a religion based on these miraculous discoveries. Thousands of believers will indeed follow).
OK - so maybe my cynical dismissal of certain approaches means I'm missing out. But it doesn't seem to matter
Like Dax says - it's finding out about yourself that matters. I've sussed what works for me, and it provides me with a low-stress methodology that I'm happy with. I don't knock those who choose a more complicated route. Well..., apart from a little tongue-in-cheek mockery ;-)
My personal weaknesses include indiscipline and occasional lapses of concentration (eg: waffling on here when I should be monitoring my trades). My approach seems to accommodate that. I imagine that I would come a cropper if I tried using some of the more highy refined systems.
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TraderPattern
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Relatively quickly (a few months) if you learn the ropes from a consistent winner.
roguetrader
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He he, been trading for about 18 months now and can't answer your question yet. The elusive "consistancy" is still not there. I trade US stocks and etf's. Not a geat fan of technical indicators, I trade price and volume relative to support and resistance, just about as basic as you can get. If and when I find consistancy I will get back to you,
Re
With regards to becoming consistent,what was the final step in putting the last piece of jigsaw in it's place.
Accepting a loss?
Finding a good method?
I've found that accepting a loss is the most hardest to achieve.
I'm consistent in losing and have found that to make a transition to a consistent trader is not easy,you can become a consistent trader as soon as you can have total control of your emotions in trading and trade mechanically.What this means is to set up internal boundaries between your emotional self and your trading mind.How long this takes will differ from person to person,some manage to do it quicker than others.Most traders never manage to do this.
I feel im getting closer to this goal,i will not give up until i achieve it.
Llew
With regards to becoming consistent,what was the final step in putting the last piece of jigsaw in it's place.
Accepting a loss?
Finding a good method?
I've found that accepting a loss is the most hardest to achieve.
I'm consistent in losing and have found that to make a transition to a consistent trader is not easy,you can become a consistent trader as soon as you can have total control of your emotions in trading and trade mechanically.What this means is to set up internal boundaries between your emotional self and your trading mind.How long this takes will differ from person to person,some manage to do it quicker than others.Most traders never manage to do this.
I feel im getting closer to this goal,i will not give up until i achieve it.
Llew
Rudy
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Jumpoff: Everything you always wanted to know about statistics (but were afraid to ask...): http://mathworld.wolfram.com
I was fired a little over a year ago. I suddenly had all the time in the world to investigate some further in my hobby: trading. After 3 months of full time studying trading, money management, statistics and backtesting several strategies I went live. I stayed above the red line so I decided not to look out for another job anymore: this was my new job !
At first I traded stocks, but always had the feeling too much $$ were going to the brokers. I decided to look for other brokers and during the search came in contact with CFD's. Cheaper, but still not perfect. Than I found out how to trade FOREX. No commission and small spreads ! So I shifted my focus completely to EURUSD and EURJPY. As I said a year has passed.
I am what you would call a "system trader". I use a srict set of rules for entry and exit a trade. But I am still not satisfied with my performance, which has everything to do with psychology, I deviate from my trading system. So I keep learning and improving by working with low risks (small investments) and increasing the stakes every month when I have proven to myself that I am fully in control.
I was fired a little over a year ago. I suddenly had all the time in the world to investigate some further in my hobby: trading. After 3 months of full time studying trading, money management, statistics and backtesting several strategies I went live. I stayed above the red line so I decided not to look out for another job anymore: this was my new job !
At first I traded stocks, but always had the feeling too much $$ were going to the brokers. I decided to look for other brokers and during the search came in contact with CFD's. Cheaper, but still not perfect. Than I found out how to trade FOREX. No commission and small spreads ! So I shifted my focus completely to EURUSD and EURJPY. As I said a year has passed.
I am what you would call a "system trader". I use a srict set of rules for entry and exit a trade. But I am still not satisfied with my performance, which has everything to do with psychology, I deviate from my trading system. So I keep learning and improving by working with low risks (small investments) and increasing the stakes every month when I have proven to myself that I am fully in control.
Hi Jumpoff, Rudy.
Well done Rudy, I am in much the same position as yourself. I only trade US stocks as a PDT. I mainly trade one pattern and since I have stuck to that I am becomming more and more consitant, each month is better than the last. I too suffer from not sticking to the rules of my trading plan at times and each time I make an " impulse" trade that is more often than not when I lose.
I still work fulltime however my trading profits are getting bigger by the month. The 3 things that have really helped me to get better are:
1. Having a set out trading plan that details the setup and rules of each trade.
2. I now know the power of risk management which includes my risk / reward and max $$ loss on each trade I make. I first started with a max $$$ loss of $50 per trade so the amount of shares I bought would vary from trade to trade but I would always ensure my stop was set so I never lost more than that amount. My Target would then have to be $100 min profit per trade. The best way to describe it is I would make 2 steps forward then 1 step back but over x period of time my wins were bigger than my losses and thats when the numbers game is important. ( To the Big boys: I know $50 is not a huge amount and niether is $100 but when you have to stump up $30,000 to really be a PDT, capital preservation is key in the learning phase so you can play another day ).
3. A "Mentor" who also trades US stocks. Its easy to say thats the reason why but we trade totally different stocks and patterns as he only trades Nasdaq and im more into NYSE stocks although I do dabble in the odd Nasdaq stock. The point being is he has really helped me devise a set trading plan and has really helped me with the psychology of trading which I now belive is the most important part of trading.
Yes I still break my rules and yes I lose more often than not when I do. I too am working on not trading outside of my plan to improve my profits. You never stop learning and improving
Ray.
Well done Rudy, I am in much the same position as yourself. I only trade US stocks as a PDT. I mainly trade one pattern and since I have stuck to that I am becomming more and more consitant, each month is better than the last. I too suffer from not sticking to the rules of my trading plan at times and each time I make an " impulse" trade that is more often than not when I lose.
I still work fulltime however my trading profits are getting bigger by the month. The 3 things that have really helped me to get better are:
1. Having a set out trading plan that details the setup and rules of each trade.
2. I now know the power of risk management which includes my risk / reward and max $$ loss on each trade I make. I first started with a max $$$ loss of $50 per trade so the amount of shares I bought would vary from trade to trade but I would always ensure my stop was set so I never lost more than that amount. My Target would then have to be $100 min profit per trade. The best way to describe it is I would make 2 steps forward then 1 step back but over x period of time my wins were bigger than my losses and thats when the numbers game is important. ( To the Big boys: I know $50 is not a huge amount and niether is $100 but when you have to stump up $30,000 to really be a PDT, capital preservation is key in the learning phase so you can play another day ).
3. A "Mentor" who also trades US stocks. Its easy to say thats the reason why but we trade totally different stocks and patterns as he only trades Nasdaq and im more into NYSE stocks although I do dabble in the odd Nasdaq stock. The point being is he has really helped me devise a set trading plan and has really helped me with the psychology of trading which I now belive is the most important part of trading.
Yes I still break my rules and yes I lose more often than not when I do. I too am working on not trading outside of my plan to improve my profits. You never stop learning and improving
Ray.
Salty Gibbon
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Right on the button Oatman
SOCRATES
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The main problem that people face is not what the market delivers, it is how they respond to what is presented. Jesse Livermore said that a trader has to know himself completely.Now the difficulty is that the fly in the ointment is a permanent feature. Therefore the human element within oneself has to be modified in order that the temperament element of character does not get in the way. And this is the single most difficult part of evolving as a trader and not the technical part, which in large measure is academic and therefore more or less easily surmountable.
fudgestain
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For almost all .. on trader BB's you're not going to get that stage. The dream ain't gonna happen.blash said:
Trading for living: doubly guaranteed not to work because you are jacking away some or all of your profits if you make any. Just a prescription for a continuous near-death experience.
Overwhelmingly most don't get faintly near to asking the right questions, let alone trialling and establishing an accurate model to amass money from the market.
Charts: Jesus Christ. All the so-called gurus.. they don't know jack sh*t with their ludicrously anal chart permutations. Charts work to keep almost everyone who is an independent trader from knowing how to set up a trading model. I can read a chart and sure stochastics are very nice, for example. But charts: you're just looking at the tablecloth; the table is underneath.
Outlook: either die quickly and reincarnate to do something you can do or die painfully over a few years and never quite give up on a dream forever beyond your reach.
wasp
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What a load of...
It took me 18 months to get me head around what I wanted from the markets and how to get it. For the last 6 months I've been earning consistent, comfortable profits, day in, day out. I didn't learn about myself or discover inner understanding. I learnt how to enter and exit the market without fear, just follow a simple set of rules and take a simple profit which earns me an above average income for 3 hours work a day.
Oh, and I use charts!
It took me 18 months to get me head around what I wanted from the markets and how to get it. For the last 6 months I've been earning consistent, comfortable profits, day in, day out. I didn't learn about myself or discover inner understanding. I learnt how to enter and exit the market without fear, just follow a simple set of rules and take a simple profit which earns me an above average income for 3 hours work a day.
Oh, and I use charts!
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fudgestain
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A multi-millionaire .. next stop; woo, go for it!
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