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Trading for a living


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#51 entre

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Posted 25 January 2004 - 11:45 PM

I think it is possible to trade for a living with 25-50k with low overhead. You have to pick your spots more and have tighter miney-management. Trades you would make with a 100k plus account you have to be willing to ditch. My background is a lot different from a lot of you. I started trading at age 19 BEFORE I got my nest egg so I started out trading tiny capital I couldn't afford to lose which was a mistake but also a correct decision. A mistake since at first I'd take massive massive drawdowns but a blessing since it would motivate me to work harder than I ever had not only during market hours but also preparation outside market hours. Basically it accelerated the learning curve. I worked in the "real world" to make back the initial money and was much better prepared the second time. I believe it can be done but takes extraordinary effort. Just my opinion, but it's easier to do it in stocks vs futures since there are more inefficiencies there due to the sheer number of stocks. Meaning if you are able and willing to go through 1000 stock charts a pop, you might just find one out of that 1000 that works. Sure out of 1000 stock charts in a good market you might find say 20 that look like about to break out. Then you go further into the 60 minute charts of each to compare them vs each other and rank them...all in the off chance one of them works and you see it in realtime. And that's IN ADDITION to analyzing overall market direction, technicals, liquidity, etc that probably everyone here does on a daily basis. For me this is a subset of what I do. All in all a typical day is get up at 8, check premkt trading in certain stocks, premkt futures, bonds, dollar, eat breakfast in front of the computers, same for lunch, 2 hrs after mkt close break 30 minutes for dinner, return to scan for setups, hit the gym 9:30-11(EST), look at market charts till around 2 am, sometimes as late as 3 am and I still don't think I'm prepared enough. I probably don't need to do all this but it's a habit acquired from trading little capital I couldn't afford to lose in my youth. It's all just a question of how bad you want it..the price you are willing to pay. From what I've seen, the vast majority of people that say they work hard really don't.

#52 Spectacular Bid

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Posted 26 January 2004 - 12:57 PM

Just a quick weigh in on Frankie Joe. I was in Zeda's contest in 83. I was in first place right up until the last few weeks, when Frankie Joe started making his move. I talked to him a few times as either Norm gave him my number or I got Frankie's number form Norm. (I don't remember which). I was certainly no personal friend of his, we were just having a good time egging each other on( really nice and funny guy), but I would be shocked to hear he completely blew up and committed suicide. He ended up edging me out. I won the most money and some guy with a small account ended up passing us both by a good margin right at the end. Frankie sure didn't have any problem with the market in 83. There still were plenty of swings especially intra day to sell rallies and buy declines. My understanding like Index Traders is he died of a heart attack not too many years after at the age of 45.

#53 Guest_jcolti_*

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Posted 26 January 2004 - 08:05 PM

There's one well known futures vendor out there who has written books, given seminars, managed money, had a fax service, etc. where it was uncovered in an expose by Bruce Babcock that his "I trade for a living" spiel was a complete fabrication in order to pander his products Hi Gary I remember that controversy quite clearly , wasn' it Wells Wilder who went ahead and published "The truth about Bruce Babcocks Infamous Trading Systems' to prove that Babcock 's sytems all lost money ? I saw a copy of this book and it claimed 38 systems of Babcock' lost 64k each from the early 80's to the 90's (total of 4.5m )if anyone cared to trade them. I agree with you about these vendors, I bought a few of them ,but soon realized they were worthless John

#54 sagitarius_d

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Posted 26 January 2004 - 09:55 PM

Jcolti, Unfortunately there is a lot of scam on the internet about trading systems etc. I do not think that a wise person, that is not crazy, would sell a system that has small number of parameters and that makes real money in real life for 50 or 5000 or 25000! Forget all about "i made so much money that i wanted to return part of it to fellow traders etc". However i have read several books , and tested some systems on the s&p500 on daily data going back to 1982 ...And some of them worked..Consistently..And yet,they were in books that costed /and still cost/ less than 50 ,even less than 20 dollars! I have always wanted to read Day Trading With Short Term Price Patterns and Opening Range Breakout by Toby Crabel but it is too expensive more my budget at the moment..And i still haven't digested the other info i have received. Howevr i have read 2 chapters from it /do not ask me how/ and most of the stuff is something that other authors have also done- for example after a 3 or 5 day down move what would happen on the 4th or 5th day in the s&p500 ,t-bonds,soybenas or pork-bellies. As for Trading for a living ,i think that it is possible but only with stock index futures. It was margin that made Jesse Livermore the millions he made and lost in small amounts of time.. And one should definitely have some other income at the beginning..So the first several years one should not be heavily concentrated on daytrading, but rather swing trading..

#55 Gary Smith

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Posted 27 January 2004 - 01:28 AM

Hi John, no, the vendor I was referring to wasn't Welles Wilder but someone who is still around making the rounds. The Welles Wilder story is really wild. Bruce so did an 8 page expose on Wilder in Bruce's book The Business One Irwin Guide to Trading Systems. If you recall, Wilder was marketing a $35,000 (that's 35 thousand) trading method that purported to uncover the hidden order in the markets based on phases of the moon. Wilder and John Hill as programmer tested all of Bruce's systems and as you stated published the results. However, Bruce sold most of these systems for $25 and they were based on other more expensive systerms on the market and weren't sold as stand alone systems but as ideas for further research. I was friends with both Bruce and John Hill, both in my opinion quality vendors and individuals, and I had to often straddle the line in their battles. Wilder and Bruce got embroiled in a long and nasty lawsuit that they eventually just settled.

#56 Guest_Samson77_*

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Posted 01 February 2004 - 09:10 AM

Gary excuse my ignorance but are you the same Gary Smith that wrote the book "Live the dream ....." ? I have been in this industry since 1985 and seen many come and many go. I share your skepticism on the number of people that are able to trade for a living in reality but I also have to whole heartedly agree with the originator of this post. There are many levels of maturity and experience that a trader must pass through before he or she is able to achieve the proper set of attitudes and habits that will make him or her consistent and the originator of this post for what ever reason seems to have arrived there. If you are the Gary Smith who wrote that book. I can tell you for sure that you have not yet achieved that level of trading maturity yet, I can assure you of that. If you are not him I apologize but keep on going.

#57 JohnnyK

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Posted 01 February 2004 - 09:51 PM

As for Larry Williams (and others like George Angel) their books have SOME very good value...as an introduction to concepts to STUDY until they are your own (or you discard them)...period. When he turned $10,000 into $1,000,000 in a year -- what is not known widely (this was confirmed by him to me, personally) was that he was up to well over $2,000,000 and lost a million plus in a couple weeks (or less). He lived on the edge, in order to make a big name for himself and pulled it off.

Just for fun, I logged Larry's statements and charted them. Then I did some artwork on it using his performance as a backdrop. The moon is where Larry's two million dollar mark was.

http://mycoolstars.h...t/pics/lry3.jpg

Would you venture into these hills at night? :blink:

It's noteworthy though, that Michelle Williams won the same contest ten years later with one tenth Larrys results, only her equity curve was much more sane.
Here is a comparison.

http://mycoolstars.h...cs/williams.htm

JohnnyK :)

#58 BlissBull

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Posted 16 June 2004 - 09:28 PM

I can vouch for the fact that some of the most famous traders have blown up at one time or another, if not several times in their trading carreers. The most obvious one would be Jessie Livermore. On one of his "blowups" he declared bankruptcy. On the last one he commited suicide. I have personally blown up more than once as well, and I can assure you that you don't need much capital to "trade for a living" At one point, I won a new Lexus IS300 in a contest on ETrade competing with 120,000 traders nationwide! I ran $100,000 up to $2,200,000 in thirty days trading puts during the market slide in 2001. Using real money, I once ran $400 up to $30,000 in six weeks flat! In 1980, I lost $100,000 (all my money) in one year. In other words, I have paid my dues. Now I subscribe to the fact that money management is more important than trading style! I have been trading since I was 18 years old in 1958. Now I am 64, and determined to keep my cool, and never blow up again. I am making a nice living trading options, with less than $50k in my trading account. "Know thy self!" :)