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I posted this message privately to Jeff, but maybe the rest of the list
would like to read.
>
> Jeff Caplan wrote:
> >
> > Hi folks..
> >
> > I'm getting scared. I'm just getting into S&Ps and Bonds after a long,
> > long layoff from the futures business. I've delved into trading enough
> > times that I'm cured of indicator fascination.
> >
> > Within the last two days, a newbie posted a request for all the closet
> > profiteers to come out of the woodwork and let him know whether they making
> > a living off day trading, and day-trading alone.
> >
> > I eagerly waited for the responses from all the "pro's" I keep reading > messages from.
> > ...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
> >
> > 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)
> > How do you pass the time during the day while trading?
> > To what do you attribute your success?
> > Is your trading mechanical or discretionary?
> > Do you think you're one-in-a-million, or can your success be emulated?
> >
> > Thanks for any responses. They're greatly appreciated...
> >
> > Jeff
> I think you can rest your mind about whether one can make money from
> trading futures. Yes, it can be done.
>
> In 1986 I was working for Bank of America when they re-orged my dept.
> and was layed off. Back in '68 I was a broker that didn't know a thing
> about the markets. Thinking that I could learn if I went back to
> college and got a degree in banking and finance it would help. It just
> didn't. The only way you can learn about the markets is through
> experience and serious study.
>
> While with BofA I began to trade the markets again and from my past
> experience (tape reading) I began to have moderate success. A friend
> introduced me to computers and trade related software. My first
> computer based charting program was Compu-Trac. To this day I think it
> is still the best package around, but it is only EOD so you can't use it for day trading.
>
> My return to trading was with equities, and as I said with moderate
> success, but I soon migrated to equity options which I found to be much
> more profitable if you understood that leverage could be your friend as
> well as your enemy. The profits began to increase dramatically until
> March 28, 1986 when I lost $45k within the first 5 minutes of the open.
> I began to evaluate my methods and began to understand that I was using
> methods that were based on my experience of some 15 to 20 years ago and
> that the markets had changed radically and that if I wanted to survive
> I would have to learn new techniques and reexamine the effectiveness of my old methods as they related to these new markets.
>
> Once that education was over I then began to look at futures rather than equities or equity options, because I realized that equities were
> extremely manipulated by the specialists and that options were basically an insiders game and pretty well rigged against the off floor trader. Yes, there are exceptions to what I just said, but on the whole most traders that trade options don't make money. If you would like some
> more war stories and my experiences trading options e-mail me and I will elaborate.
>
> Once I began to trade futures (1987) my equity curve has been much
> smoother and I have had very few major drawdowns. I should elaborate on this because it just isn't that simple. I began with oscillators and
> used discreation to make the trades. Since I was not totally
> comfortable with this I began to study patterns that repeat on a
> consistant basis and found that this along with certain indicators
> proved to be the most successful. To do this I needed a software
> program that would chart on a real-time basis, ergo TS. Once I got all
> of these patterns and indicators programmed into TS as a system
> (mechanical) I began to be even more successful. However, since the
> system is a stop and reverse the exits leave a lot of profit on the
> table so I have been using discreationary exits instead. As yet I have
> not developed a good exit strategy other than looking at the charts or
> in some cases target trades.
>
> I don't know if this answer is what you're looking for, but it works for me.
>
> Lamont Cranston
> "who knows what evil lurks"
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