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Traders with 5-10 years of experience but still not profitable
This has been an interesting discussion to read. I will add in a few words for whatever they may be worth. While an institution or an individual may come up with a successful way of trading, over the long-term it may not continue to work because the environment changes. One has to be able to adapt to survive in the long-term. For a business to remain successful over time, those running the business will have to be able to adapt as the markets and the world changes. History is filled with the stories of once successful businesses which failed because they could not change and adapt or because they became complacent. While my style of trading at its core is much the same over the last many years, I have had to adapt it significantly to the way the markets are moving the last several months. So far, I have been successful since trading live again and am hoping that I am learning the lessons which will help me reach my higher goals with trading and be able to endure for many years.
At heart, I am more of an analytical thinker. I currently work as a consultant in the arena of enterprise IT and work with very large corporations. When I began my journey into buying and selling stocks, I thought it looked rather easy. I also had too much trust in those running corporations and the markets. My eyes have been opened, and I now realize how many deceitful and dishonest people there are in this world. In regards to my naive outlook on the easiness of the path before me, I thought that I would be able to analyze companies and find the winners and analyze the markets and find the patterns that would make for repeatable, profitable trades. My quest, so far, has resulted in me realizing that I will never have the full picture about what is going on behind the scenes in any company for good and bad reasons - one of the bad is that there are many liars. There are powerful organizations and people moving the markets, and I will never know what their plan is. However, I do see that the market moves up and down in such a way that it will come back to an area where the trades can be resolved before the market turns or continues. That is the only thing that has made sense to me, but I have had to stretch to get there. I am still working to take advantage of that and to make sure that I am improving in order to take advantage of those areas where the price will turn and/or bounce significantly. I also know that I do not know and most likely cannot know with 100% accuracy where price will change direction, but I can get closer and closer and work on a method that will help me profit from the direction change and the trend cycles. My analytical mind has had a hard time dealing with the world of trading because it has seemed so often that 1 + 1 does not equal 2. Whenever I would get the idea that I might have found something that would always be true, shortly thereafter, the market would prove me wrong. Now, I am trying to think more in terms of what may be the strategy of those moving the markets so that it works to their advantage and the overall motion of the markets. It is still people running the markets and trading systems, and they are working to manipulate other people (me and you) in order to profit. They have to make the charts look certain ways to either set a trap or start a move that others will want to follow. I have a long way to go and feel blessed to have made it this far in my journey and have probably not explained myself very well, but maybe it made a little sense. I wish you all the best in your parallel journey to successful trading!
I just want to say that this is one of the best threads I've seen with regard to becoming a successful trader. I am very grateful to learn from all of the others here with more experience. My friend asked me, what is your secret to making money in the markets? I said, discipline and patience and more patience and more discipline . Always continue to study, practice and put in the hours every day.
Nothing to prove here, either you believe it or not, all up to you.
Why would anyone show your friend's trading statement online to strangers? This is just too damn weird.
What's weird is someone who has been a member since 2017, with the first post, stating that "a friend" makes a full time living scalping, with nothing to back it up.
9 times out of 10, this is shill behavior, hoping to get a few people to PM the poster for details. Forgive me if I am wrong in this case...
Trading is one of these strange endeavors where uncertainty prevails. The trick is to learn to react to what is happening, not to anticipate. Everyone heard of these studies where they use random entries and still manage to come up with profits. Setups are helpful, because they improve the probability somewhat, but there is no guarantee in trading.
So, in regards to a trader not being profitable for 10 years, he has to change his method. That includes setups and entries, but even more importantly position sizing and trade management. Losers sit with losses for two long and exit winners too fast. This is trivial, but so is pretty much everything in life. Trading is in a way similar to surfing: you catch a wave and ride it. If you get one out of ten waves you will have a good day in the ocean. In the markets you get paid for every wave you catch and get charged for every missed one. Similar allegory is catching a bus in a foreign city: if it takes you in the right direction you sit tight, if not - get off and find another one. The trick is to figure out when to get off: not too early when the bus makes a few turns before getting to the main road, and not too late when you get too far away from the starting point and now have to waste time and money figuring out how to get back to square one.
In the markets you take a view and act on it: long, short or flat. If your view is correct enjoy, if not - cut your loss and move on. Sounds simple, but you get the opportunity to go mad either way. Loss - you are pissed off. Win - more often than not you can get pissed off because you got out too early. Or too late, where you gave back some of the profit.
I think trying to set risk/reward at 1:2 is not a bad idea, as the start. The probability of the market going your way is 50%, so if your wins are twice the size of your losses you will do fine. But then again, it's like fighting: you can explain how to box, but things change in an instant as soon as you get punched in the face. Shooting targets is one thing, shooting well when being shot at is a different thing altogether.
I realize this is a pretty useless rant. The trouble with trading though is that you can talk numbers ad nauseum, but things will change as soon as you enter into a position.
The point is: you have to figure things out. By the way, "you" does not mean me talking with the finger in the air, this "you" is a collective and includes myself. Trading is a bitch, as it makes bullshit very hard: your trading account statement says it all. If the number is not going up you have to see what you have been doing (trading diary) and figure out what needs to be changed.
Serious question - why would any successful scalper provide "absolute proof" to you?
I know a few successful traders personally, and they would never share the details of their success with random people on the web.
However maybe I could direct you to Tom Hougaard (TraderTom on YouTube). He livestreamed about a month's worth of trading last year. He showed entries, exits and live PnL on the screen, trading $200/point (or more) on GER30, NAS100, US30. For me it was really eye-opening to see these livestreams. He didn't do anything particularly special, just straightforward price action. He made a lot of bad calls and got into bad trades, but he was really good at recovering. A few times I saw his daily profit top $100k.
Hougaard doesn't livestream any more, but he does run a free Telegram channel where he posts his scalping in real time, and he rarely has losing days. He's candid about how he trades and how much he makes, and he's not trying to sell you anything. If you want to check him out, search for "TraderTom".
Hougard occasionally posts messages from obnoxious traders who are ridiculously critical of what he does. I'm going to paste a few. This is why you are unlikely to see "absolute proof". Who would voluntarily invite this sort of hassle into their lives?
My point requesting proof is that lots of people claim to be successful, but this being the Internet, guess what? Most people lie.
I just asked the poster who said "Personally I know a trader have been trading for 10 years+ by scalping only, in and out fast and made comfortable income enough for normal living." for some details (not absolute proof) and SHOCK OF ALL SHOCKS no details were provided.
I believe if one throws out claims, one should be able to back them up.
Kind of seems like it's just a losing battle isn't it? The average person just doesn't think about performance over the course of 5 years. The average person doesn't understand the amount of data it takes to prove something beyond a margin of error. The average person doesn't understand that you can make money in the short term from taking on excessive risk, but over the course of years that always catches up with you. The average person doesn't realize how easy it is to fake successful trading even to a live audience.
Combine that with the high turnover in futures trading, and we end up with a situation where 90% of traders are out there making the same mistakes. We've already been through this in the thread 3 times now. Do people just not read the thread before posting? It's hard for me to not respond every time I see this stuff online, but really it's never going to make a dent in the problem.
All we can do is teach the information we have that is proven, and hope that people are able to make use of it. It's not flashy. It doesn't attract attention. It's difficult material that requires real knowledge and study. The people involved in such research are more interested in researching more than trying to teach it to retail traders. And even if they did teach it to retail traders it's unclear how much it can really help. But it's the best we have. At least it's better than looking into every indicator and strategy that gets mentioned online.
Wow, that's a lot of claims about "average people!" Do you have evidence to support those claims? It really sounds like you're just expressing your own emotions. Assuming that you have adequately defined "average" what studies show what they do or do not understand? While something they say or do may lead you to assume or infer that they don't know or don't understand, it doesn't mean that they don't. You kind of came at me with this too a couple of times so I'm perhaps a little overly-sensitive to it.
Besides, of COURSE there are things we're trying to know and understand. That's why we're here. Have some compassion.
I have seen several brokers who are transparent about the win rates of retail traders, forex and futures to be specific, and the numbers are between 70-80% of their retail traders lose money. This has been fairly consistent with studies performed over at least the past 100 years. Check with your broker and ask them: How many of your retail traders make money in a given year?
The Futures Game - Who Wins, Who Loses & Why? is a classic book on the subject, well referenced and with plenty of evidence to suggest what we have been saying here. I would refer anyone who is interested to Chapter 13: Who Wins? Who Loses? And Why?. Although the book was published in 1999, the numbers still tell the same story today. You can probably guess who the losers are.
Of course we are focusing on the 80% of the losers. Let's talk about the outliers, the 20%. We may be seeing some of the examples here as being in the 20%, but the proof is in the pudding, as they used to say. I do not know what these folks hope to gain by showing the world, but I'll try:
They are trying to gain a following and establish themselves as an authority
They like showing off (ego or whatever): this is a new world of influencers, streamers, and internet celebrities (Twitch, Discord, YouTube, etc.). There are people who just tune into a Twitch channel just to watch someone play a video game.
They are con-artists, charlatans, and/or shills, trying to prime a sales or fraud pump
I believe the points @TWDsje and @kevinkdog are trying to make is that consistent results over many years are hard to show. Scalpers can and do make money, but it is a hard way to make a living. Being well capitalized as a scalper would help a lot. I have a scalping system (automated) that has a 100% win rate over the past year, and overall about 95%. The margin costs are incredibly high, but if I have a large enough account, I could trade this well and successfully from a dollar perspective, but the opportunity cost makes it not worth it.
I will leave you with a quote from the aforementioned book at the end of chapter 13, that may sum up this whole bloody thread:
