cytopathology
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how long 'till you're good.
It's odd that the place where it it looks like I'm supposed to answer your question is already full of text. Where's my wife when I need somebody with a little sense! I'm probably screwing this post up, but anyway...
The question, in case I'm not in the right box or whatever, is "How long does it take to make a stable income from trading?"
If you want to develop the ability to day-trade a naked long or short position in something like the ES, it will take something like 5 years, assuming you have the exceedingly rare combination of talents necessary to do this difficult work in the first place...
Almost nobody has the right stuff. The talent combo includes nerves of steel, a fair degree of intelligence, the ability to sustain purpose for many discouraging frustrating years, the time and money to trade every day of the week, (not just 2 or 3 days per week).... It's very rare to find a person who's got all this.
But they do exist!
I have a close friend who has made his living day-traded for over 25 years. He does it at home on his computer... he started before there were computers. He started with options, but trades mainly e-minis now.
It took him 5 years before he could keep from giving back all the money that he had made. He's a quadriplegic and says that trading the markets has been a big help to his overall life. The fact is, people who have almost no ability to move their arms and no movement at all of their legs (such as my friend) usually don't live nearly as long as he has, and nothing close to as long as he will continue to live.
His passion for trading has kept him out of the clutches of depression and despair, the things that he tells me make quadriplegics give up on life. He has seen it happen.
Anyway, people who make a good living day-trading the markets do exist. For me, knowing that fact for myself, knowing it beyond the shadow of a doubt was essential to my sticking with it for 3 or 4 years. But it wasn't enough.
I didn't start out with all the necessary talents. To this day, when I put on a leveraged day trade, my heart literally pounds as my concentration and IQ circle the drain of adrenalin. It's unlikely that you will be as bad off as I am in this regard, but steady nerves are essential. I was never able to "practice" my way out of my debilitating fear response.
But...
If you find a strategy that is based upon something more predictable than the minute-by-minute rise and fall of market prices, it may take less time to stabilize and start making a living. At least you won't need nerves of steel, that much I know for sure.
But frankly, I'm not sure about the time factor for this type of trading because I don't personally know anybody who's actually made a stable living by trading this way. Perhaps I don't get out much.
I'm having some promising results in recent years, but it's still too early to know if what I'm doing now will keep working for any decent length of time.
But without a doubt, if you start trading all starry-eyed and green, you will lose money fast -- unless you have a close friend who already trades successfully for a living. And even then, he's got to let you watch his every move and trade along with him for years. Or if you know of a web site where there's a pro trader who has taught a trusted friend of yours to make a living, then go there.
But don't get out there by yourself and think you're going to learn to make a living before you lose every cent in your account. You won't. And if you're trading a leveraged vehicle like the ES, you'll be fortunate to lose only the money in your account and not a whole lot more.
If you're a book reader, you'll soon start buying books, most of which are written by well-meaning guys who can't trade for a living themselves. They have decent basic advice, a lot of them, but the bottom line is, if anyone has a clever and simple trading strategy that makes good money, it will only continue to make money while it's unknown. If you tell anybody where the gold is, you've got a stampede like California in 1949... The first 10 scruffy looking guys (as well as the Levi kids, selling blue jeans) make 99 percent of the money. It's always like that with money that appears to be easy to make.
So you've got this one basic choice to make right away. You can either put in the 5 years that it takes to learn to day-trade the simple long and short positions, or you can spend your time searching and trying to come up with something that very few people know about (or are willing to study hard enough to learn about).
I'm taking the second rout because I've admitted to myself that I don't have the kind of unflappable nervous system it takes to trade like my dear, tougher than nails quadriplegic friend.
Really, I wish everybody could meet this great guy.
But here are some suggestions that may be helpful if you decide to head in the same direction I'm going:
Try to find something that seems like a terrible idea when you first think of it. For example, everybody is "trend trading" long positions. What would these people refuse to even think about doing? Hmmm. How about buying something in free fall?
"Never try to catch a falling knife!" This makes intuitive sense.
People who started trading yesterday have already heard it. You never met 'em before but they will look you square in the eye and repeat their solemn admonition as if they were channeling Gann.
And for this reason alone it's fertile ground. You should study it in every variation you can dream up or read about. Trust me on this.
Here's another example: A lot of retail traders think that options (beyond buying them like stocks) are too complex to bother with. And they lose value over time. It's obviously safer to buy stocks, right? Why bother with all that reading, all that math, after all "it's not the vehicle that you trade, it's how good a trader you are," right?
Lots of people think like this, so the rules of the Universe tell us that the study of Options is apt to give you an edge.
Here's another example: Does your trading platform make it easy for you to trade pairs? No. Do you even know what pairs trading is? This should tell you something.
Yeah. If there were a huge demand for pairs from retail traders, these Brokers would all offer the latest pairs trading platforms. But they don't. That means pairs trading may give you at least a temporary advantage. It certainly gave the institutional traders who started it a huge advantage.
A great trader, Erlanger, (hope I spelled that right) once wrote that his best trades made him feel like he was putting his head in a lion's mouth. That says it all.
If a trading strategy seems easy, it's less likely to make money than something counterintuitive, frightening, and obviously dangerous... because if it looks easy, everybody is going to be tempted, including me and you.
So if you choose to trade in the simplest way, with simple long and short positions, with or without some leverage... intending to buy low and sell high or vice-versa, you're going to have to forget finding a "secret" of any kind, and just go ahead spend five or so years developing yourself into something rare.
If your strategy itself isn't radically odd and vanishingly rare, you've got to become an outlier yourself. You've got to develop a skill that takes years to even hope to learn, a skill that requires a rare aggregate of somewhat unrelated talents, and decent horde of cash that you will burn through over a period of several years before you start breaking even.
If anyone can do it the way my friend trades, you can! If you doubt it, don't even try.
Instead, study your head off and read everything you can get your hands on, paper-trade many accounts using different strategies, and always try out new counterintuitive things (in paper accounts) that seem like too much trouble to learn, or too stupid to waste time with, or just the opposite of what your investment councilor told you.
Seriously guys,
yt
It's odd that the place where it it looks like I'm supposed to answer your question is already full of text. Where's my wife when I need somebody with a little sense! I'm probably screwing this post up, but anyway...
The question, in case I'm not in the right box or whatever, is "How long does it take to make a stable income from trading?"
If you want to develop the ability to day-trade a naked long or short position in something like the ES, it will take something like 5 years, assuming you have the exceedingly rare combination of talents necessary to do this difficult work in the first place...
Almost nobody has the right stuff. The talent combo includes nerves of steel, a fair degree of intelligence, the ability to sustain purpose for many discouraging frustrating years, the time and money to trade every day of the week, (not just 2 or 3 days per week).... It's very rare to find a person who's got all this.
But they do exist!
I have a close friend who has made his living day-traded for over 25 years. He does it at home on his computer... he started before there were computers. He started with options, but trades mainly e-minis now.
It took him 5 years before he could keep from giving back all the money that he had made. He's a quadriplegic and says that trading the markets has been a big help to his overall life. The fact is, people who have almost no ability to move their arms and no movement at all of their legs (such as my friend) usually don't live nearly as long as he has, and nothing close to as long as he will continue to live.
His passion for trading has kept him out of the clutches of depression and despair, the things that he tells me make quadriplegics give up on life. He has seen it happen.
Anyway, people who make a good living day-trading the markets do exist. For me, knowing that fact for myself, knowing it beyond the shadow of a doubt was essential to my sticking with it for 3 or 4 years. But it wasn't enough.
I didn't start out with all the necessary talents. To this day, when I put on a leveraged day trade, my heart literally pounds as my concentration and IQ circle the drain of adrenalin. It's unlikely that you will be as bad off as I am in this regard, but steady nerves are essential. I was never able to "practice" my way out of my debilitating fear response.
But...
If you find a strategy that is based upon something more predictable than the minute-by-minute rise and fall of market prices, it may take less time to stabilize and start making a living. At least you won't need nerves of steel, that much I know for sure.
But frankly, I'm not sure about the time factor for this type of trading because I don't personally know anybody who's actually made a stable living by trading this way. Perhaps I don't get out much.
I'm having some promising results in recent years, but it's still too early to know if what I'm doing now will keep working for any decent length of time.
But without a doubt, if you start trading all starry-eyed and green, you will lose money fast -- unless you have a close friend who already trades successfully for a living. And even then, he's got to let you watch his every move and trade along with him for years. Or if you know of a web site where there's a pro trader who has taught a trusted friend of yours to make a living, then go there.
But don't get out there by yourself and think you're going to learn to make a living before you lose every cent in your account. You won't. And if you're trading a leveraged vehicle like the ES, you'll be fortunate to lose only the money in your account and not a whole lot more.
If you're a book reader, you'll soon start buying books, most of which are written by well-meaning guys who can't trade for a living themselves. They have decent basic advice, a lot of them, but the bottom line is, if anyone has a clever and simple trading strategy that makes good money, it will only continue to make money while it's unknown. If you tell anybody where the gold is, you've got a stampede like California in 1949... The first 10 scruffy looking guys (as well as the Levi kids, selling blue jeans) make 99 percent of the money. It's always like that with money that appears to be easy to make.
So you've got this one basic choice to make right away. You can either put in the 5 years that it takes to learn to day-trade the simple long and short positions, or you can spend your time searching and trying to come up with something that very few people know about (or are willing to study hard enough to learn about).
I'm taking the second rout because I've admitted to myself that I don't have the kind of unflappable nervous system it takes to trade like my dear, tougher than nails quadriplegic friend.
Really, I wish everybody could meet this great guy.
But here are some suggestions that may be helpful if you decide to head in the same direction I'm going:
Try to find something that seems like a terrible idea when you first think of it. For example, everybody is "trend trading" long positions. What would these people refuse to even think about doing? Hmmm. How about buying something in free fall?
"Never try to catch a falling knife!" This makes intuitive sense.
People who started trading yesterday have already heard it. You never met 'em before but they will look you square in the eye and repeat their solemn admonition as if they were channeling Gann.
And for this reason alone it's fertile ground. You should study it in every variation you can dream up or read about. Trust me on this.
Here's another example: A lot of retail traders think that options (beyond buying them like stocks) are too complex to bother with. And they lose value over time. It's obviously safer to buy stocks, right? Why bother with all that reading, all that math, after all "it's not the vehicle that you trade, it's how good a trader you are," right?
Lots of people think like this, so the rules of the Universe tell us that the study of Options is apt to give you an edge.
Here's another example: Does your trading platform make it easy for you to trade pairs? No. Do you even know what pairs trading is? This should tell you something.
Yeah. If there were a huge demand for pairs from retail traders, these Brokers would all offer the latest pairs trading platforms. But they don't. That means pairs trading may give you at least a temporary advantage. It certainly gave the institutional traders who started it a huge advantage.
A great trader, Erlanger, (hope I spelled that right) once wrote that his best trades made him feel like he was putting his head in a lion's mouth. That says it all.
If a trading strategy seems easy, it's less likely to make money than something counterintuitive, frightening, and obviously dangerous... because if it looks easy, everybody is going to be tempted, including me and you.
So if you choose to trade in the simplest way, with simple long and short positions, with or without some leverage... intending to buy low and sell high or vice-versa, you're going to have to forget finding a "secret" of any kind, and just go ahead spend five or so years developing yourself into something rare.
If your strategy itself isn't radically odd and vanishingly rare, you've got to become an outlier yourself. You've got to develop a skill that takes years to even hope to learn, a skill that requires a rare aggregate of somewhat unrelated talents, and decent horde of cash that you will burn through over a period of several years before you start breaking even.
If anyone can do it the way my friend trades, you can! If you doubt it, don't even try.
Instead, study your head off and read everything you can get your hands on, paper-trade many accounts using different strategies, and always try out new counterintuitive things (in paper accounts) that seem like too much trouble to learn, or too stupid to waste time with, or just the opposite of what your investment councilor told you.
Seriously guys,
yt
