It is rather obvious that the negatives of trading are not exposed enough, especially by brokers who need to find a new crop of traders to fill the voids and pay the bills each month. And yes, many many traders have been drawn to the the freedom and potential financial independence of trading only to be immediately crushed and sent back into the mainstream workforce. The bottom line regarding risk though is the classic "what do we do with our lives" argument. Take the chance or just spend some portion of your life wishing you had...
They must have more money stashed away, but it is this point that I find conveniently never gets mentioned by most who talk about trading full-time for some reason.
I worked 2 jobs for 4 years (16 hours per day, sometimes 6 days a week). I saved, saved, and saved. Only when I could support myself for a period of months did I take the plunge. Low fixed costs. Extremely conservative lifestyle. In thin months, I lean on my longer term portfolio to pay bills. In good months, I stash profits. My wife works too. She is essentially self-supporting and very supportive.
Also, how do you handle draw downs? If you are telling me that there will be no draw down more than 1/8, I think many including experienced traders will find this hard to believe.
It's simple. If I buy on the ask, I'm immediately 1/16th down. If it ticks down, I think very seriously about bailing immediately. Why? Because I was wrong. If I decide to wait one more tick, I can usually live with that. Sometimes one tick is enough to get the stock to go the other way. But if I took a loss greater than 3/16th, I'm just being a stubborn idiot. I know people that wait until the 1/2, but I figure if it goes to the 1/2, I've waited too long. I can tell I'm wrong before 1/4 certainly, and I don't trade things that I can't get out of, like KTEL or AMZN. It is this strategy that allows you to take profits at the end of the day more than any other. Remember, I am looking for +1/8th or greater, or 1K per day. And yes, it takes a lot of practice, but so does pinball...
My "doom and gloom" posts are in response to many I see that simply are at best tenuously connected to reality. I have seen many examples where you can take a person who thinks rationally in other areas of their life, but place them in a position of chasing after $$$ in the markets, their thinking quickly becomes faulty and self-destructive.
Believe me, I don't mind your gloom and doom posts. There is a bad side to trading if you choose to see it...It's risk. You can lose everything. But I could die going to the grocery store too. Does that mean I don't drive?
If it will make some here "feel" better, I will refrain from future "gloom and doom" posts. I apparently have made my point here at SI in this regard.
It's a free country, post at will no matter how doomy.
I am hoping the people experienced in trading become more careful in how they make their assertions in a public forum like SI.
Now why would we do that? You'll get carpal tunnel first! <grin> |
