How Long Does It Take to Become a Profitable Trader?

[jonbig04 10]

A. That I charge for my ebook appears to bother you something fierce. My question to you is why should I go to all the time and trouble of putting something like that together and then give it away? My time is, after all, worth something, and even if I were to compute it based on 10 cents an hour, the book would amount to considerably more than $30.

 

If you believe that Connors trades, or Elder, or Raschke, or Nison, or anyone else who has compiled a book, ask them to send you a copy gratis. If you don't believe they trade, why bother to ask?

 

Enough with the book.

 

B. As for your trading, we went through all of this a year ago, but at the time you wanted to make what I believe you called "boatloads" of money and you wanted to make it fast. This did not sound promising to me, at least in terms of my time. Plus you got a mentor, and too many cooks, etc.

 

But I'm afraid we do not see trading and the markets in the same way, though that is not necessarily a bad thing. I don't think the market is fractal, either, but no one is required to agree with me. In any case, I don't see that you've followed the steps I suggested in the Trading Journal I referred to above. Not that that is necessarily important. As I said earlier, there's more than one road. I would not have brought it up had you not said that I didn't "prioritize" the information nor place downstage center what I thought was the most important. The most important element of a consistently profitable trading strategy is an edge, and I say so at the very beginning after which I get into the process of developing one.

 

As for the present, whatever issues you have with your trading are really between you and your mentor. If you're satisfied with how things are going, then there's no problem. I do suggest, however, that you look over at least the last couple of days' or so entries and read everything as if it were someone else's journal. Are you really listening to the help that members are trying to provide?

 

This has probably drifted into the realm of the off-topic by now, and I don't want to hijack the thread either. I do hope that those who are interested in the subject of this thread can get past the personalities and focus on the central issues that determine how long it takes to become a profitable trader. Contrary to some remarks that have been made, whom one listens to -- much less whether or not that someone is a successful trader -- is not a central issue. If one believes that everyone from Velez to Homma is a crook and has made it all up, he can learn most of what needs to be learned by getting a cheap or free charting program and data and sitting down in front of the screen with a stack of legal pads and a box of pencils and figuring it out himself, which is what the pioneers such as Dow and Wyckoff and Livermore and Gann had to do. Doing this takes at least a brief familiarity with the scientific method, but there's nothing especially difficult about that. However, since the schools may not be teaching it any more, below are the essential steps:

 

The essential elements of the scientific method are traditionally described as follows:

 

- Observe: Observe or read about a phenomenon.

 

- Hypothesize: Wonder about your observations, and invent a hypothesis, (sometimes one's hypothesis is initially nothing more than a "guess"), which could explain the phenomenon or set of facts that you have observed.

 

- Test a hypothesis

 

- Predict: Use the logical consequences of your hypothesis to predict results (e.g., measurable experimental values) that must be found if the hypothesis is to be judged correct -- whether it is 'complete' or not.

 

- Experiment: Perform experiments to test those predictions. (Note that great precision regarding a negative result might not be required to falsify a hypothesis.)

 

- Conclude: Failure to see the predicted results from a well designed and implemented experiment is clear indication that the hypothesis is defective. Try again. Seeing the predicted results is an indication that the hypothesis is acceptable though not 'confirmation' or 'proof' of its correctness.

 

- Evaluate: Search for other possible explanations of the result until you can propose no better account of your data. Formulate a new hypothesis which may better explain the experimental data and the original observation.

 

- Repeat

 

If one has trouble applying this to the markets, perhaps the following will be of help:

 

1. Study price movement.

 

2. Develop a set of preliminary hypotheses which take advantage of these movements and test them according to standard methodology.

 

3. Decide what strategy (breakout, retracement, reversal) will best take advantage of what you think you've found.

 

4. Decide what tactics you're going to employ to implement it.

 

5. Carefully define the setups which put these tactics in play.

 

6. Develop a trading plan around this strategy, these tactics, and these setups.

 

7. Evaluate the results.

 

8. Rinse and repeat.

 

Note that there is nothing abstract, theoretical, philosophical, cosmic, or ethereal about any of this. It's just work. Lots of it. And no one can do it for you.

 

I'm not upset about the charge, its you prerogative. Like I said, I would have paid 10x as much for it. I was simply telling you how I felt and my thought process, wrong or right. I'm not attacking you, my comment about your attitude sometimes is something I've been meaning to say. You can write it off, maybe I'm wrong. Whatever floats your boat.

 

About the money, I still do want to make boatloads and fast, that's why I'm here. I'm not here to wax philosophical about the market and all its complexities. I'm here to work my ass off for however long it takes. Make no mistake I will get to exactly where I want to be, that much I can promise you. I realized than how long it may take, and I realize now how much work there is still to do. You can say what you want about me (others have ), but I work hard and I'm disciplined in my pursuit. All I did was tell you that I think your attitude sometimes stinks, you can't take the criticism and then attack my trading (not saying my trading doesn't need it). Doesn't that prove my point? Judging by your reaction, I would expect that this isn't the first time something like this has come up. Anyways I've spoke my piece, its obvious you don't want to hear what I have to say and that's fine. I don't wish to feud with you and be combative in all the threads that we both are in etc. It was not my intention to offend, but obviously I did. However i will say that I've shown nothing but gratitude (except for our disagreement in that one thread) ever since I've bought your book and have been here.

 

Regarding my journal I appreciate all the comments that are added, even the ones that don't make sense to me. I don't see eye to eye (trading wise) with a lot of people here, so some things I take with a grain of salt, but its appreciated nonetheless.

[Tams 20]

Nice, thanks for that. I do hope it made you feel better.

 

 

I hope you learn the message in this smart girl's analysis, decision and action.

 

You might not see it now,

maybe in 5 years you will.

[DbPhoenix 42]

Getting back to the OP, and before the thread gets too long and people stop reading it from the beginning, it is important not to mix up profitability, success, and making a living. The video addresses profitability, and this need not have anything to do with making a living, that is, making a living requires a much greater degree of financial inflow than just turning a profit.

 

"Success" has an even wider range of definition. Success need not mean making $100k a week. Success, depending on circumstances, may mean being able to transmit the order. Success, depending on circumstances, may mean being able to break even, or to withstand the temptation to trade. Depending on the amount of damage inflicted by the market or by the wrong mentor, success may mean being able to address the trading environment with a clean slate, and that can take a very long time. But the amount of time has little or nothing to do with trading per se; it has rather to do with the self.

 

When wondering, then, how long it will take for one to become "profitable", he must define just what he means by "profitable". He must then determine just how ready he is for the task.

[HAL9000 10]

How Long Does It Take to Become a Profitable Trader?

 

As long, as it takes! Period.

 

Hal

[stockmarcus 10]

I think the answer "as long as it takes" is the only one that will get you there, lol.

 

From having taken some steps towards intrday trading europe, currently i feel like saying

 

- The market gives you profits. Your trading skills are absolutely important but the market has a huge say in what you make and what you dont.

 

- The first step seems to be to learn how to not loose money trading. It all goes uphill from there

 

Its fun

[Neil316 10]

OK, OK. So it is hard to succeed. I'm a novice but I want to learn and i don't want to grow old before I am profitable. I've read a few books, i've tried some trading.

 

I want to get serious now. So what's the fastest road to mastering trading, at least enough not to blow my capital?

1. Reading? What books?

2. Courses? There are lots and some are expensive. Which ones are best?

3. Another way? Tell me.

 

Cheers,

Neil.

[Tams 20]

...I want to get serious now. So what's the fastest road to mastering trading,...

 

 

 

rule # uno: don't argue with the market.

[forexbee 10]

OK, OK. So it is hard to succeed. I'm a novice but I want to learn and i don't want to grow old before I am profitable. I've read a few books, i've tried some trading.

 

I want to get serious now. So what's the fastest road to mastering trading, at least enough not to blow my capital?

1. Reading? What books?

2. Courses? There are lots and some are expensive. Which ones are best?

3. Another way? Tell me.

 

Cheers,

Neil.

 

Neil,

 

I am new to this forum, but over past 5 years i have learned a lot. Initially i too thought its very simple and can make money easily. But once got into the ground, lots of things need to be considered. My advice, pretty much most of stuffs are there in net for free. Once after getting familiarized i was happened to meet one of experienced trader on net and he helped a lot on my understandings. Learn about Support/Resistance, Fibs, Patterns, watch the chart, practice on demo. Once when you start looking at charts , you will understand what you are looking for .....things like 123patterns are good starting place with mix of fibs & S/R.

 

GOodluck...

 

Fxbee

[stockmarcus 10]

I want to get serious now. So what's the fastest road to mastering trading, at least enough not to blow my capital?

 

Second for using a demo account. Lets you practice enough to gain confidence in your chosen trading style. In you're thinking long term, time will be a bigger factor, but for short term trading a demo account is perfect for letting you work out you way. From using real capital before switching to a demo account, it is a good approach.

 

Id recommend a book called "Enhancing trader performance" by brett steenbarger. It creates a good seed to frame trading activities around.

 

If you by chance know a trader in real life talking to them would also be good, as is reading forums. While the 'making it up as you go' approach will leave you with more comprensive experience at the end, it takes forever! You could argue though that this is 1/2 the fun..

 

Imagine yourself as a successful trader. Starting at a high level, imagine what you would be doing (in terms of trading activities) as that trader, think about where you are now, and from that identify what you're going to need to work and learn. This will chance over time as you progress further and realise you need new things (or some things are pointless), or you find that some approaches work for you and some dont, but its a good place to start.

 

Approaching it as you would if you were starting a small business could also help.

[VTK 10]

If he's blessed with common sense, a finely-tuned bullshit detector, and a basic understanding of what an auction is, shouldn't take more than a couple of months.

 

Could not agree more,Db..If you can understand how market is functioning and have a common sens and logical approach to life i think that you will be fine.From mine experience having a mentor have helped me dramatically.

Thing whit mentor is that i have understand that method which he is using IS how i want to trade because it is logical,simple and based on stuff which have stood test of time.If you just wonder around and take every course that you can find,good look whit that.You got to know what you want!

This trader on clip is right when he talks about plan,demo,when to go live and so on.

But i would not agree with him that ALL people will need few years to get on track..If you work smart,not hard and have what is quoted above,i think it can be done in one year.

Regards,

VTK

[zdo 20]

The further you look outward for answers, the more likely you are to end up in that great 78% that just doesn’t make it. Any mentor or (online) helper who is suggesting or teaching you technique and or 'market principles' instead of asking you the correct, difficult questions is ultimately putting you on (unnecessary) life support and crutches. Remember this - even if he is a master at trading AND a wonderful teacher, he knows what he is doing and you will ALWAYS only think you know what he is doing. “That difference is worth maybe millions” (PointGuard) Find your own way! Stop listening to any of us – both the gurus who violate the inner game and the ones that validate it. Find your own way!

 

Tear through as much trading information as you can as quickly as you can, but periodically stop and highlight those parts that resonate with your true self and build on those and discard the rest... assimilate, accommodate, repeat. You can shorten the quantity of the “10,000 hours”, but you can not dodge the minimum quality summing up to your own version and realization of the “10,000 hours”.

 

Each trader must identify his own set of challenges and meet them as they arise. Certain issues / challenges may not be in the area of ‘thinking’ (or common sense or analysis or however one may want to describe it) at all. Thinking is required for many issues, but for a huge percentage of the ‘trading traps’, thinking is a total waste of time.

Each trader needs to understand what he or she specifically needs to know and apply.

Hal in a recent poster said it best "As long, as it takes! Period" Now that I think about it why that is not the post of the month I’ll never know. I’m going to go try nominating it now.

Edited June 1, 2009 by zdo
Clarity, impact, etc

[DbPhoenix 42]

While the Kumbaya route to trading success appeals to many, no amount of self-knowledge will substitute for a consistently profitable trading strategy. The trader who does not have a consistently profitable trading strategy will, obviously, inescapably, lose.

[Eddiefl 10]

My first post here. I beleive it comes down to equity starting with, tools choosen to use and any mentorship.

 

EF

[zdo 20]

While the Kumbaya route to trading success appeals to many, no amount of self-knowledge will substitute for a consistently profitable trading strategy. The trader who does not have a consistently profitable trading strategy will, obviously, inescapably, lose.

 

Kumbaya is a victim song and I pray, posted evidence to the contrary, that this tone does not the demonstrate the extent of your understanding of the balance required between these two ‘works’. Your consistent partiality for edge work and discounting of strengths work is duly noted. Have you ever questioned if you are unintentionally hurting as many as you are helping with this imbalance? I trust you will transform on time (and not transmogrify )

[DbPhoenix 42]

Kumbaya is a victim song and I pray, posted evidence to the contrary, that this tone does not the demonstrate the extent of your understanding of the balance required between these two ‘works’. Your consistent partiality for edge work and discounting of strengths work is duly noted. Have you ever questioned if you are unintentionally hurting as many as you are helping with this imbalance? I trust you will transform on time (and not transmogrify )

 

You'll have to bring it down a couple of notches, zdo

Edited June 2, 2009 by DbPhoenix

[wowzers 10]

If you really pour everything you got in it. Less than 2 years.

[RM686 10]

Lets see. I have been trading for 30 years and have lost 50% of my net worth. I think I need a regression channel to figure this out.:doh:

[Tams 20]

Lets see. I have been trading for 30 years and have lost 50% of my net worth. I think I need a regression channel to figure this out.:doh:

 

 

that's 100% more than some people got.

[wowzers 10]

lol, funny. Regression chanell????? what??? what kind of trader would use that??

:shrug:...........:hmmmm:..................:idea:............................:thumbs up:

[HAL9000 10]

lol, funny. Regression chanell????? what??? what kind of trader would use that??

:shrug:...........:hmmmm:..................:idea:............................:thumbs up:

 

Lol, funny. I am!

 

Hal

[HAL9000 10]

And to make you think about regression channels,

 

here is a chart from today with a 10 and 100 linear regression with 2 SD bands.

 

Its the 6B (GBP vs. USD).

 

Maybe you see it, maybe you don't, but think about it.

 

 

[RM686 10]

WHERE DID YOU GET THAT PICTURE OF MY BROKERAGE ACCOUNT:crap:

[HAL9000 10]

WHERE DID YOU GET THAT PICTURE OF MY BROKERAGE ACCOUNT:crap:

 

LOL,

 

but what should I say,

 

once I have invested only in stocks, and I was right, so I won and won (mainly from 1999 to 2000). Somehow I knew, that this should have an end, but I had no clue about the forces behind it (shorting). In other words: I was naive, and lost, so this picture might show my past too.

 

Then I decided to learn about day trading, but its difficult. (Stops are my problem, like in the past)

 

Today I think I am at the point, but to be honest,

I thought that a year ago too.

 

I am still alive, and now it might change.

 

Anyway, I have survived, and I will now survive once more.

 

Somehow, I am sorry, that you lost money,

I have lost much too, just being naive.

 

But, my conclusion today is, just use real money,

if you are really prepared.

 

It is a business (not a game, not a retirement plan), and it is a cruel one.

 

 

Regards,

 

Hal

Edited July 28, 2009 by HAL9000
;-)

[RM686 10]

Just keep those pod bay doors open Hal. This monkey is out of breath but has not given up the fight. Maybe will will both make it to Jupiter.

[MightyMouse 12]

I think a reasonable expectation is to expect it to take about 4 years. So, if someone does in fact become a profitable trader in just a few months, he or she was extremely lucky to have been on the right side of the market most of the time while they were learning the hard lessons of the markets. Of course, they could be full of s___ too.

 

In addition, what do you mean by profitable? Do you simply mean your plusses coming out ahead of your minuses or do you mean that you are earning something that is significant and not a waste of time?

 

Or, does profitable mean that you earn enough money to make a living trading? If you want to make a living trading, then you need to know how much you need to take out of the market on a monthly basis and have at least 6 months of that on the sidelines in the event that you hit a dry spell. So, if you need to make 10000 a month, you need to have about 60k set aside separate from your trading capital to fill the gaps if you hit a drawdown period. Then to earn 10k a month in the first place, you need trade somewhere in the area of 30-40 contracts per trade (assuming you trade ES) to earn an average of 10k a month. It’s truly unreasonable to expect to earn more than 350-650 per month per contract traded. So, you need to address the capital requirements of trading 30-40 contracts per trade, given a reasonable tolerance for risk if you want to make a living doing this

 

So, giving yourself 3 pts of risk at 1.5% risk, you need about 300k-400k to earn 10k a month. If you plan on earning more than 350-650 per month on ES per contract, you are basing your plan on a dream. There are only a handful of traders who average more than that just like there are only a handful of people who win lotteries each year.

 

A lot of people fail at this because they put a heavy strain on their trading capital; they tried to earn too much with too little capital. I am not implying that this is the only reason people fail.