Post: #1

Is making a living from trading (be it daytrading, swing trading, etc) real? Is there someone in this forum that actually does it? I mean PURELY from trading, not selling ebooks, coaching, EAs, etc...
I know negative months are expected, but does someone actually profits in the long term?

I have met traders with extensive technical knowledge, but not a single one that actually trades full-time for a living. I keep wondering why people invest so much time in this if it seems hopeless at least by my experience. I can't even find an example searching around in the internet, almost everyone that claims to live from trading really only wants to scam you into buying ebooks with "profitable strategies"

Post: #2

(12-25-2016 10:04 AM)fagnoni Wrote:  Is making a living from trading (be it daytrading, swing trading, etc) real? Is there someone in this forum that actually does it? I mean PURELY from trading, not selling ebooks, coaching, EAs, etc...
I know negative months are expected, but does someone actually profits in the long term?

I have met traders with extensive technical knowledge, but not a single one that actually trades full-time for a living. I keep wondering why people invest so much time in this if it seems hopeless at least by my experience. I can't even find an example searching around in the internet, almost everyone that claims to live from trading really only wants to scam you into buying ebooks with "profitable strategies"

Your second paragraph really hit it on the head for the most part. Most of those professional trader guys make their money selling ebooks or a subsciption to "alerts". They don't make a living trading.

I think if you head over to Stocktwits you can find a few actual professional traders. Even then, i think a lot of these work in the industry and trade for fun or on the side. Making a living from it might be too difficult.

Personally, I trade more for the " thrill" of it. Put some cash on a stock, wait for the upward swing, and exit out making a small 50-60$ profit rinse repeat. It's the same thrill I get playing blackjack. I treat it as an ATM with a bit of a challenge.

If I want to buy something stupid, the money will come from a small trade.

Post: #3

I lost two small fortunes 30-40k
And had to return to work because of it.
I saved up another small pile and now invest instead of trade.

I read the average trader blows up his account in 8 months. That's about what happened to me.

I ro do leveraged investing but i buybthe mist conservative hi yield socks i can find: nursing homes. OHI SNR CCP and the more conservative mreits like stwd

No ones getting younger in usa and with 25k
I can make about 300 dollars a month in dividends . I make a point to avoid market timing and buy on dips and basically never sell. Those reits are held by big pension funds ajd i dont want the headaches ajd trying to time. I think interactive brokers is essential because their margin rates are only about 1.6 right now and the stocks pay 7-9% so i pocket the difference without trading. Overtrading is the biggest money losing action i believe, but brokers of course won't tell you that

I read

Post: #4

(12-25-2016 10:04 AM)fagnoni Wrote:  Is making a living from trading (be it daytrading, swing trading, etc) real? Is there someone in this forum that actually does it? I mean PURELY from trading, not selling ebooks, coaching, EAs, etc...
I know negative months are expected, but does someone actually profits in the long term?

I have met traders with extensive technical knowledge, but not a single one that actually trades full-time for a living. I keep wondering why people invest so much time in this if it seems hopeless at least by my experience. I can't even find an example searching around in the internet, almost everyone that claims to live from trading really only wants to scam you into buying ebooks with "profitable strategies"

Read "How to Trade like a Standard Market Wizard" by Minervini

Post: #5

I sell options (credit spreads and iron condors mostly) Not recommended if you do not know exactly what you're doing. I've literally seen people lose millions overnight because of their own ignorance and stupidity. Study hard, and stick to one or two indices. You will not learn hown the underlier acts until you get right in the middle of it.

Post: #6

I would not waste your time being a day trader e.g. on FX. An event can happen out of no where and all the money and more you made in the previous month or longer, and that's without considering the stress aspects of it. Spread betting is only free money until you realise it isn't.

I have friends that have made 150-200 dollars a day from spread betting and have seen their P&L on the application. That said they have had one or two days were they lost 1,000 dollars.

Investing in shares is fine, investing in ETFs is fine.

A lot of those day traders online are bluffing chancers.

Post: #7

It's a negative sum game when you take into account fees and spreads. I'm sure some people manage to beat it long term but there wont be many. My friend works on the FX sales desk for a major bank and says ai trading is killing it now.

Post: #8

Don't waste your time put your money in the SP500 and collect your 5% return.

Post: #9

Trading is absolutely real. With that said, it has a >95% failure rate.

Trading has evolved over the years: you are not going to find many point and click traders behind screens anymore. Most successful traders are quantitative or have a deep fundamental understanding of a market.

The real traders also won't be posting on twitter or stocktwits and etc. In fact, you can't even get a hold of them. Try calling up a big name hedge fund manager and see if you can get them out for coffee. Real traders are working, like everyone else.

Post: #10

Of course it's real. That being said, 90% of people fail. Read the market wizards series, there are guys who take 10 grand and turn it into millions. Most people take that 10 grand and turn it into zero.

Post: #11

Go check out reddit.com/r/wallstreetbets. It gives a very accurate description of what trading is for most people.

I'd say 15%/20% of the posts are people saying "Up 20% in 1 month", "5k to 20k in 3 months!". "Up 35% this year on a $200,000 portfolio"

80-85% of the posts are "Fuck I blew my account on JNUG".

Post: #12

Dividend investing is the best and safest way to make money on the market. I've never come across a successful trader.

Post: #13

Limit your loss. Most traders start with a bigger sum, 100k to have a leverage. When you have less leverage effect you need to do more risky stuff. I did some day trading with low money. Made some money but also lost. Always in high risky stuff. I quit it because to much stress. Maybe you shouldn't do day trading, make your horizon bigger, like a few days, a week or so.

Post: #14

I'd also say that the reason most fail is due to a complete misunderstanding of risk management, or no risk management at all. The best traders will only ever risk 1-2% of their account on any one position. Also, most don't understand the risk to reward ratio. Many will make trades that risk $2 to make < $0.5. Where the best are making trades that will return $3+ for every $1 risked.

This simple understanding will stop you from blowing out accounts with ridiculous speed.

Also, for those selling options, you need to be selling options that are 3 or more weeks out. I used to sell options that were expiring at the end of the week, and would make tiny money, while losing on one position that wiped all of my winnings out. The premium is much larger 3+ weeks out, and also gives you time to close out positions at a profit, and start other positions.

For futures trading, having stop losses in place that are irrefutable is imperative. Sticking to these stops will save your life.

Most also need to understand that when a position moves in your favour, that money is YOURS and yours to lose. Move your stops up accordingly, and take profits. $50 profit is better than a $100 loss.

The best saying I always go back to is this: "Nobody went broke by taking profits"

Post: #15

I can only talk about FX side of trading, there are few types of traders in term of trading style and time frame; they are fundamental, technical and news trader, time frame can be minutes, hours, days, for the most part, pick your trading style that suit your personality and learn it through demo practices, head to babypip or funfactory forum to ask for questions or advise.

Trading is about risk,money management and leverage control, understand risk and reward ratio, only take a position when you have good reward ratio to go into position, and don't risk more than 5% of your account in each position you take, no one can tells when is the lowest low and the highest high. you exit the position based on your trading plan. always have a trading plan before you enter a position, if it works, stick to it, if it doesn't, revise it until it works, there are so many indicators that you can pick and work on it. and don't expect to make quick bucks out of it, depending on individual, some people take years to develop those winning skills.

on choosing the right brokers, pick those reputable big names, and know the difference between ECN and market maker in term of spreads/commissions that they offered. avoid those shady brokers which had bad rep mentioned in the forums. if there is major news, it is wise to stay out of market for newbie, you don't want CHF/Eur jan 2015 incident that could blown up account in just a few sec. no amount of stop lose can save your ass. the best way to avoid slippage is to exit the position if big news is coming.

if you are news trader, 2017 has some big events that you can potentially profit from it, mark your calendar for euro member states presidential elections. more green pips, hurray!

Post: #16

The Wall Street playboys (retired traders) claim to make their money through internet marketing. I don't blame them.

I'm not a huge fan of IM, but it's at least a semi predictable strategy for making 7 figs or more. And anyone can do it. I don't think the same can be said about trading.

Post: #17

I trade AIM (Alternative Investment Market) in UK. Know a few guys who trade up to £100k on individual shares, plenty of guys with portfolios £200k-£1m. I don't trade full time as a professional but it's definitely possible. Very steep learning curve - most newbies (as with game) blow out hard before they get a chance to spot the pitfalls and be able to make profits

Post: #18

Yes, it is possible. No, I don't do it. I think most do it on the side as alternative income streams to supplement their salary and provide a backup. But yes trading is very real, not everyone just dumps their money into some shitty mutual fund that makes less than the S&P and closes their eyes.

Parzival and TheFinalEpic had good points. People who truly make a living off trading have a nice large safety net so they don't stress the fuck out on every trade and compromise their decision making. 100k is I think typically the minimum for trading as your sole source of income. Diversifying can also help, but it's also helpful to trade what you know, an industry, an index, commodities, something like that.

Risk management, being disciplined with your stops, taking profits, and having clear cut rules and processes that you never deviate from are keys to being successful. Unfortunately, the vast majority succumb to one of many typical newbie psychological mistakes and can't maintain discipline. It is extremely hard.

If you're making a living on trading you're mostly going to be involved with technicals, fundamentals are too long term to take profitable action on. Day Trading is a level above technicals, almost psychological, you're reading the tape, watching the ticks; it's a really crazy mindset for those guys, not my thing. I prefer swing trading where technicals can play out and you can act on patterns and trends.

I'd paper trade until you were confident you wouldn't blow your account out within a year. But most can't motivate themselves since it's not real money.

Post: #19

(12-25-2016 04:11 PM)jj90 Wrote:  Trading is absolutely real. With that said, it has a >95% failure rate.

Trading has evolved over the years: you are not going to find many point and click traders behind screens anymore. Most successful traders are quantitative or have a deep fundamental understanding of a market.

The real traders also won't be posting on twitter or stocktwits and etc. In fact, you can't even get a hold of them. Try calling up a big name hedge fund manager and see if you can get them out for coffee. Real traders are working, like everyone else.

And for those who can turn a profit, 4% of that remaining 5% would be better served choosing another occupation because they will never kill it enough to make the financial rewards justify the fact that you will probably end up in a grave in your 50's from the stress. Very very few actually make big money in trading any more starting from very little. It used to be the opposite back in the 90's and earlier. Most people that make big money these days already have lots of money (from trading in cake markets in the past) or have huge financial backing.

The honest truth is this is one of the few jobs that to an outsider seems easy but is actually one of the hardest jobs out there. The old school professional traders could easily make a fortune before the electronic markets came into play compared to how competitive things are these days. These days if you're lucky you'll be profitable (- but probably not profitable enough to be worth the time and stress) after all expenses and being mentored or trained by a firm. Getting a seat on the exchange was essentially a license to print money back in the day. Sadly, those days have come and gone.

They key to making money in any industry is to be looking forward not backward, and trying to make it as an independent trader in 2016 is like driving a car with both eyes in the rear view mirror. See where the industry is going - markets are becoming more efficient and becoming more efficient at a faster pace. Strategies are becoming obsolete quicker. If you aren't part of a team with a programmer, analysts, and other traders the market is moving past your ability a few steps every day unless you devote every waking second to this business. You will eventually find yourself way behind the teams and firms that operate in the intraday space.

Personally, I would only bother with trading anymore if it was stocks or commodities on the time frame of weeks to months. That is, if I wasn't working at a firm.

Post: #20

I made few millions $ trading. It's not all roses.

I was losing money consistently for like 8 years (ups and downs), living like a broke student despite very good salary from my engineering career, because 70% of the salary was paying interest on the loan that I took and lost in the markets.

Got bankrupt 3 times before I learned essential lessons. Depression, insomnia, suicidal thoughts, psychologists, psychiatrists, ssris, you name it.

It's not all bad either. Making $200k in a day gets you high more than cocaine.

I know many people who got rich trading. Most of them after many years of paying tuition at the school of hard knocks, some of them due to dumb luck.

I also know many people who broke their lives. Working abroad to pay off debts till death, divorces, drugs/alcohol addictions etc.

There are some legit traders sharing knowledge on Quora - look up Laeeth Isharc.

Also, "Never take financial advice from anybody who has to work for a living."

(12-28-2016 02:16 AM)Razor Beast Wrote:  Getting a seat on the exchange was essentially a license to print money back in the day. Sadly, those days have come and gone.

Razor, I agree with 99% of your post but the part above. These days are gone if you want to compete with the pros on their own field. But...

Peter Thiel says that competition is for losers. You just have to have open mind.

Examples?
Bitcoin and all cryptocurrencies - up until now - 0 competition - you were competing with early adopters nerds who have 0 knowledge about trading.
Counter Strike weapons - you were competing with 14yrs old kids and taking their daddies money like a candy.
Algorithmic trading in 2008 - simple statistical arbitrage between S&P and ES could have made you rich.
Puts on VIX ETFs in 2009 were free money for few days due to some technical nuances.
Machine Learning in Fantasy Football markets, etc.

Post: #21

You can make a living for sure, but don't look at it as an easy path to wealth. Guys that trade day in and day out are picking up crumbs for the most part. Sure, they have their big trades, but they are less common than you would think.

Post: #22

I´ve traded for a while. And started doing the math. By investing 100k in trading. And making a return of 30% in one year. The return I would get 30k. By dividing this by 12 month. It would be 2500$/month. To earn this I would have to spend 8-10h/day monitoring the market, news, checking company metrics.

So do you need to risk 100k and work 10h/day to earn 2500$/month? With the extra risk of losing the money in a bad decision? Because it´s active income. Passive income would be an index of 5% return.

It didn´t made sense to me.

This is simple logic I made. But can be wrong. Due to inexperience or other reason. It´s only worth it for higher numbers. Most people I know who trade do it for the fun. Like going to a Casino. Or betting in sports. In order to do this professionally I would have to either put up a higher number in the market or manage other people´s money and mine at the same time.

Was told you don´t create wealth in the stock market. Only accumulate.

Post: #23

I feel quite strongly that it is not real and talking about 'trading' as a retail investor is actually really lame in my opinion.

Firstly, there is a difference between trading and speculating, and what is being discussed here is speculation not real trading.

Real trading is I buy 100 jackets from a factory in China at 100 and sell them in England at 150 over a few months one at time from my retail shop.

Similarly big banks 'trade' when they block buy 100k shares of xyz corp and sell them off to their institutional investors in smaller chunks at a profit. They will have some risk (delta or dv01) while they hold those shares which they will try to minimise by the use of derivatives.

A bank will rarely if ever buy and hold a security and increase its own risk hoping the price will go up. A bank will buy some shares if they look cheap and the trader expects a customer to place an order for them sometime soon, but here the trader is simply maintaining his inventory that he expects to sell to a customer at some point. This is 'trading'.

Banks can consistently make money only because they charge a commission (or spread) to their customers while practising a high level of risk management.

Speculators CANNOT beat the market in the long term. Even Wall Street hedge funds staffed by the best traders from the best banks in the world cannot consistently beat the market ([email protected] 500 index).

Trading is something that can benefit a society, speculation I dont think so.

Having said that it can be fun and a rush and you may even make some money.

Post: #24

(12-30-2016 09:30 AM)kavi Wrote:  Speculators CANNOT beat the market in the long term. Even Wall Street hedge funds staffed by the best traders from the best banks in the world cannot consistently beat the market ([email protected] 500 index).

I agree with the rest but the above. My counter point: Warren Buffett.

Be careful about sweeping statements, it only takes 1 example to prove you wrong.

Post: #25

Agreed and infact that example did occur to me while I was writing but I didnt mention it.

Warren Buffet, as per my understanding is someone who invests long term in decent solid companies with large amounts of money. This was an especially good strategy when the markets are going up, as was the case when he made most his money.