hollisnan

Just as athletes run the gamut from the weekend warrior (who flames out) to the serious professional, traders run the gamut from the naive novice (who flames out) to the serious professional. Weekend warriors have different motivations than professionals, and so it is with trading. The get-rich-quick crowd does not define trading any more than the amateur enthusiast defines sports. Which side are you on? We've had an interesting dialogue about being attracted to trading; now let's refocus the same energy on being successful at trading!

IF traders do, in fact, have an "addiction" similar to gambling, they probably won't last too long. Successful traders replace emotion with discipline.

I have appreciated the many interesting and intriguing posts in this thread. My final thought - one that I repeat daily - is that I, and I alone, am responsible for my trading performance. I have been a student at a trading school, a purchaser of books and information, and an attendee at conferences and trading events. I am grateful for all of these, but I can only hold MYSELF accountable for what I do with them, how I use them, and the results I achieve. None of the resources I purchased promised to make me successful as a trader (I bypassed the offers that made such promises), and I am skeptical of anyone who makes or implies such promises. That's my long-winded way of saying that guarantees and payback schemes are, at best, a futile attempt to sidestep the placement of responsibility squarely where it belongs - on the trader's shoulders. Don't smoke "hopium" - develop discipline!

Sam made some excellent points in the post which is quoted below. To take it one step further, I would like to contrast *education* with *training*. Education may be a passive, one-way street which confers no obligation on the student other than to listen (politely, we hope >;>). Training implies that a skill is being acquired, and this in turn requires the active participation of the learner. Drawing on the old riff "it works if you work it", any training guarantee should be predicated on the learner's compliance with the standards and practices that the training imparts. In other words, it's not enough for them to simply "take the class". They need to implement it, and to demonstrate that they have implemented it, in their trading. Of course, you can't "make someone a successful trader". It's an inside job! In fact, the business may benefit from refunding tuition costs to an inept trader. A losing trader who attributes his/her lack of success to the training provider would be casting a long, dark shadow of negative PR over the company! Hollis

Outside influences can be POSITIVE, too. Like getting a trading education from a reputable school. Subscribing to newsletters, both online and print. Participating in chat rooms and forums. Attending relevant meetings -- AAII, MTA, Meetup groups, lectures at your local public library, etc. (I host a fellowship of more than 260 full-time traders on Meetup, NYC Private Investors. We have heard great speakers like Jim Farrish, Ruth Roosevelt, Adrienne Toghraie, and Ed Ponsi and we also get together just to talk to each another.) With the exception of formal education classes and professional groups like AAII and MTA, all of these resources are FREE. In fact, a savvy web surfer can create an entire curriculum of free education from excellent sources. Again, you have to vet EVERYTHING for quality and veracity, but that's part of your job as a trader. Some of those who claim to have been fleeced have, in reality, simply fleeced themselves.

MightyMouse properly identifies the four categories of trading mistakes. This applies to someone who has already "succumbed" to the attraction of trading and has made the decision to trade. IMHO, the things that attracted me to trading were broadly superficial but valid (the desire for financial freedom, independence, recognition of limited alternatives). The things that KEEP me trading are deeper and equally valid (an appreciation of the required discipline, pride in accomplishment, and the opportunity to create a profession and livelihood that I can maintain for the rest of my life, regardless of age and possible infirmity.) The initial reasons morphed as I learned more about trading and what it entails. In a riff on that old saw... "Many are called, few are chosen, and only a handful are successful." The field narrows as the challenges of trading discipline and risk management flush out the ones who can't handle it or don't want to. Caveat attemptor!

In addition to all the valid reasons cited above, many aging Boomers are attracted to trading because their other options have already failed - the job market is hostile to older workers, brokerage accounts have delivered teipd results, their 401Ks have become 201Ks, etc. The reason new traders fail is not their ATTRACTION to trading, but their lack of PREPARATION, EDUCATION and DISCPLINE. They are smoking "hopium", not doing "workium". Many marriages and new business fail for similar reaons. Hollis

Now that Butterfield had clarified his trading strategy, it puts things in a new perspective. I guess there are different ways to define "low priced stocks". For some, it's anything less than $10. For others, it's anything less than $1. IDEA - a (hopefully) simple Excel spreadsheet to calculate the commissions for several brokers at different share prices and order sizes. This could be expanded into the type of regression analysis they teach in business school, to optimize a set of variables for a wide range of possible scenarios, but that would probably be WAAAY over our heads. Just for clarity, TradeStation does offer a fee-per-trade option. Pick yer poison! I stand by my earlier point that even modest variances in execution, sliippage, spreads and other factors could outweigh differences in commission rates. Caveat trader!

To add to all this intrigue >;->, the February 2011 edition of Kiplinger's Personal Finance magazine has an article titled "The Best of the Online Brokers" (p34) that references some of the names we have been vetting here. You may find it interesting!

I've already chimed in on TradeStation, but I'd feel remiss if I didn't say something to the effect that... Commissions and transactions costs are an important consideration in anyone's trading plan. BUT... they are not the ONLY consideration. What about reliable execution? Spreads? Slippage? Customer service? Resolution of complaints and discrepancies? These and other factors should be part of the decision tree. They can effect profitability as much as the commissions can.

I have been using TradeStation, which offers a choice of fixed commissions or a penny-a share plan. If I trade 100 shares of any stock, my commission is $1. That said, I do pay about $100 /month for their data feed (which is waived if you trade 5000 shares in any given month). Looks like you've got a couple of good suggestions to check out!