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Strategies & Market Trends : SOES Trading -- Ignore unavailable to you. Want to Upgrade?

To: Henry D who wrote (1497)	6/30/1998 3:50:00 PM
From: Michael Friesen	Read Replies (2) \| Respond to 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.

To: Henry D who wrote (1497)	7/1/1998 6:51:00 PM
From: Dave Twibell	Respond to of 1618

Henry -- here are a few thoughts on your questions: 1. "anybody knows the percent of people who soes profitably?" No idea about the exact percentages, but I would guess only a very small number actually make it as full-time traders. The main problem is the learning curve. It takes several months to get to the point where you can make money regularly (and more importantly, consistently avoid losses), but most people lose their trading stake long before they reach this point. 2. "what makes a good soes trader?" Still trying to figure this one out myself. While I know successful traders of all different ages and from all walks of life, I would say the vast majority of them are highly disciplined, fairly risk tolerant and love trading. Without discipline, you're toast as a trader. IMHO stock-picking is far less important (and much more easily learned) than money management. If you can consistently cut your losses early and avoid becoming an involuntary "investor" in stocks that run against you, you will be well ahead of most traders out there. 3. "how money you need to start?" Depends. I know of one trader who started with only $5,000 but has now worked it up to the point where he is making a living trading. If you only enter/exit a few high percentage trades per day, you probably need less of a stake then if you are doing the rapid fire Soes thing. I would definately recommend daytrading only with money you can afford to lose. Good luck. Dave