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Neal T. Weintraub wrote:
>
>
> wHAT DO YOU THINK OF TRADING AS A WAY TO FINANCIAL SUCCESS.
> PLEASE POST YOUR RESPONSE TO THE LIST.
>
For a minute I thought this was a joke (in light of my very recent
post) but I believe it's not so here goes:
I think you have to have a method that actually makes money and the
capital to withstand the drawdowns that will occur before you succeed.
That makes it not a very good way to go for someone of limited means or
anyone who is emotionally attached to money. The brochures that say,
we have a great system, and then show it on 20 commodities, often go on
to say, "you can trade this on a more limited portfolio with $5000".
Even tho they may have been honest in their testing, I believe the
chances of the smaller portfolio having acceptable results is much
lower. Primarily because the drawdown numbers for a smaller portfolio
will be more prone to being inaccurate or the portfolio "cherry picked".
It's not the easy street it's made out to be either. Unless it's a
small portion of your net worth and NOT your way of making a living,
it's hard to see how it could not be anything but stressful to some
degree.
For many of us who have other careers, it can become a second job in
itself, maybe even supplanting our original one. In effect my original
goal to pay off some debts has become a goal to succeed in trading. And
that goal has distracted me quite a bit from my first career. I can
tell you why I don't like my current job, but was the transition to
spending a lot of time on trading well thot out? Nope, it evolved. For
those of us who seek to make a transition (or by default are making the
transition) from our current career to trading as a means of making a
living or being sucessful, maybe we should step back partway along the
way and ask, was this the right thing to do?
Even if it was a means to $ sucess for an individual with another
career, it might not be right for them. I guess everyone has to ask
themselves what success is.
Also I think your emotions have to favor you being in it. If you have
conflicting feelings about it, it's less likely you will succeed.
Recently, I built up my small account from about 3K to 6K, patiently
grinding out small losses and a few larger wins in options and
mini-contracts. But a number of emotionally charged issues have come
up, at times introducing frustration, discouragement, and even guilt
into my thoughts. After being rigorous (perhaps too much so) about
kicking back options that werent' making money, I suddenly stopped
looking at options i had altogether, same with most potential new
positions. What was going on? The only thing I can think of, is that
my ambivilence about some of my decisions, including getting into
trding, was being manifest by actions that might take me out of it. I
used to scoff at some of the stuff in M. Douglas book about how you may
defeat yourself - seemed crazy, why would anyone do that? But now, I
think I've seen it in my own trading.
In short then I think it is a way to financial success for a few people
- The ones who either find a method and/or have the talent to succeed
in this field. It's a low-probability route for someone who does not
have a fair amount of capital already. I think its a way to financial
success for someone who:
1. has a positive expectation system or talent, and has confidence in
it.
2. has the capital to back that up.
3. has a risk mgmt plan consisntent with 1+2.
4. Doesn't have conflicting emotions about the money at risk; doesn't
have conflicting emotions about other issues or people that are in any
way impacted by the decision to trade.
What % of people in this crazy arena do you think have all 4? For those
it's a good way to financial success. For the rest, nope.
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