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Strategies & Market Trends : SOES Trading

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To: Henry D who wrote (1497)	6/30/1998 3:50:00 PM
From: Michael Friesen	Read Replies (2) of 1618

There's a good recent (1998) article in Forbes about the business - I don't have the exact reference. Perhaps someone reading this does? >> anybody knows the percent of people who soes profitably? It's not very high. Of all the people coming in less than 20% are still doing it a year later. Most people start with $100K, and lose about $30K over a few months and quit. A lot of that is commissions. If you can break even after a few months your chances of making it are much higher. >> what makes a good soes trader? Ability to cut losses quickly will keep you in the game. What "quickly" means depends on your trading parameters. Essentially your average loss should be smaller than your average profit - that way you have to win less than half the time to break even. Patience when there are few opportunities. Aggressiveness when opportunities abound. This was my problem. I always was great at cutting losses, but didn't capitalize on the opportunities - this is caused by fear of losses - also could be called inability to pull the trigger. >> how money you need to start? I started with $100K. I think $200K is better. You can leverage that 2X and therefore diversify a little. Anything less than $75K and you're trading on hope. You shouldn't count on SOES trading to make a living - in some months even the best traders lose. You should have some money that you don't use to trade with that you set aside to pay your living expenses each month - that way losses won't impact you so much. Then when you have built some good profits in your account (say $40K - $50K) you can start removing them to pay expenses. Hope this helps. Believe me, I've watched SOES traders in action (as well as been one). The game is not as glamorous as it appears from the outside. You don't get up every morning and make $1000 in a couple of hours, like the magazine articles imply. Often there are times of gut-wrenching fear and self-doubt. You will get really angry and jealous when you see other traders around you winning while you are losing. I'm not saying it's all bad - at some point I may try again. But only after some sober second thought.

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