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Jeff, the below email is intended to the Omega-List.
Jeff Caplan wrote whether ther are pros out there. I am about to give you
the real thing.
I make money in real time trading for a living. To do it, you need to the
following:
* Before you trade, you need an alternative steady income to pay the bills.
After three years of full time trading, you can then determine whether you
will earn money from realtime trading.
* Research for a few years.(I began in 1989)
* Learn TradeStation like the back of your hand and learn and understand
its weaknesses( I began in 1994)
* Get your hands on some trading systems and LEARN how they work and more
inportantly learn how they DON'T work. People usually throw out shit
systems. Before you discount it, figure out why it DOES NOT work. What is
its weakness ??
* Test trading systems for a few years. (I began in 1994 and started
trading in real time in Feb 1997)
* Read valuable research. I recommend Ralph Vince, Toby Crabel, Bob Buran,
Neil Weintraub, R+L Kamikaze Newsletters, Market Wizards I & II. These
books are great starting books and little gold nuggets for traders. I have
the total upmost respect for Mr. Bob Buran, he is a real time trading
legend. He is a system vendor but he is a real time trader.
* Learn that there is no holy grail trading system.
* Learn to finally figure out that money management is as important if at
all MORE important than system development. People spend too much time with
trading system but virtually no time in developing a money management
strategy.
* CTAs that I personally talk to risk anywhere from 0.2% of funds under
management to up to 1.5% of total funds under management. It has been
statistically proven that if you risk more than 2% you are statistically
GUARANTEED to LOSE ALL YOUR MONEY. Therefore risk no more than 2% of total
funds under management on one trade. If you decide to risk more, then you
are an idiot.
As a small trader with $50,000, you can trade a hypothetical account of
$100,000 and try to limit risk to 20% draws (i.e. $20,000) and risk no more
than 0.5% per trade (i.e. $500). You will need 20 consecutive losing trades
to lose $10,000 (10% draw) and fourty consecutive losers to hit your 20%
drawdown threshold. This also means that you are unable to be a big,
swinging S&P 500 trader, sorry!!!!.
TS4 has enough features in it for ANYBODY to build a decent trading system.
If anybody thinks that TS5 will make them rich then I hope that someone can
wake them up from a silly dream!!! If you can't build something in TS4 then
DO NOT blame TS4, just look in the mirror and there is the person you need
to blame.
I have just bought a new software package called "Trading Recipes" and it
is not as graphical and user friendly as TS4 but it does things that TS4
just does NOT do. Trading Recipes was released in 1994. The software
program is 4 years old.
>======================================================================
>But, I think I've seen ....
> *150 posts on how evil Bill Cruz is
> *10 posts on how heavenly WoW is
> *10 posts on whether all trading S/W companies are run by crooks and
>infidels.
> *A lengthy semantic discussion of momentum and velocity.
> *Some discussion of ELA code (!)
>
>...and not a single response from anyone saying "I make a living by
>daytrading."
>
>I'm starting to seriously wonder whether trading leads not to profits, but
>to bitterness, and a lot of free time for cranky message writing.
Jeff, there are alot of real time traders on this list but you never hear
from them because:
* I and others have no time to write crap emails complaining about TS or
Omega or others, I'm too bloody busy to write that crap.
* I work around TS problems rather than complain about them. If I can't
work around them, then I wait for the technology to catch up. In the
meantime, there are thousands of other ideas to be tested.
>So I'll ask again on the newbie's behalf:
>
>Is anybody making their *primary* living daytrading? (Not designing/selling
> futures related products/services while trading)
Jeff, I do not daytrade. I trade using end-of-day data and I am a CTA in
Australia. I have 3 clients and $680,000 under management. I DO NOT sell
systems or any other crap. The CTA business that I started in June 1998 is
not producing enough money for me yet to make it viable. My wife's wages
help pay the bills. If it wasn't for my wife, I could not do what I am
doing. I have been trading in real time since February 1997.
> How do you pass the time during the day while trading?
Jeff, my time is spent reporting to the futures exchanges and governement
authorities, researching new systems, money managament ideas, daily
accounting and miscellaneous admin. All this takes up the whole day.
>To what do you attribute your success?
Jeff, research and sweat. You need to allocate alot of time to research and
sweat by running test over test over test........
>Is your trading mechanical or discretionary?
Jeff, it is 99% mechanical and 1% discretionary.
>Do you think you're one-in-a-million, or can your success be emulated?
Trading success is NOT one in a million. With the right attitude, anyone
can do it. In Australia, 90% of all small businesses fail in the first 3
years. Trading is like any profession. I heard someone say something like,
"you can never be a brain surgeon by reading a couple of books in bed and
then commencing a medical operation the next day. People seem to apply this
kind of attitude to trading".
People who succeed in trading have researched for years, have put blood,
sweat, tears and TIME into their research, testing, systems and money
managment strategies. These factors CAN NOT be bought via a vendor's
trading system or a book. A book can give you ideas but then YOU have to
build it in TS and crunch out the numbers. What you'll then find is that
99% of all the stuff written in books is bullshit and every so often you'll
find 1% of little gold nuggets sitting in these books.
Enough of me gabbling...............
I hope this helps.
And I hope people on the Omega-List stop whinging about TS and start
researching, working and crunching numbers.
That's the only way you'll be able to succeed in this industry. I know a
CTA who manages $200 million and he has never ever used TS. He has only
used Micorsoft Excel. Get on your bikes and start working......
If the above info doesn't do it for you then, sell TS to someone else, get
someone else to trade for you, go get an office job and leave us Omega-List
users alone.
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