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How long does it take to become a good trader?


Something someone said in another thread got me thinking...How long does it take to be a good trader??? Not just profitable but consistant new account highs?
IMHO I would say 10,000 hours, thats almost 6 years of screen time. I put in +7hours a day on the us index's and 3-4 on the euro every night which I think really helped. And it took about 10,000 before my account stopped with the large swings and replaced with the more easy on the stomach new highs, higher lows.
I'm really surprised, four days and not one single response to this. I tell my students and those that inquire that I think it takes at least three to five years of really hard, dedicated study at a minimum to develop what I call the 'basic skills' to be consistently profitable. I don't mean that after that period of time all who put that time in will be consistently profitable, I mean that this is the minimum I believe is required for those who work the hardest and have the highest level of 'natural ability'. Many may put in that much time and fail. Recall the statistic that says that 90% of small businesses will fail in the first five years, and of those remaining 90% of those will fail in the next five years. That leaves 1% standing at the end of ten years. If anyone thinks trading as a business is easier than the 'average' small business, they better rethink that one.

It's a pet peeve of mine how many people frown upon trading as a business, and cite how many fail at it, and don't bother to think that the stats they are quoting are about the same, or perhaps even not as bad, as the stats for a generic small business. Say it's tough, but don't play it up like it's any different than any other small business endeavor, unless you have stats to show this.

So, back to the time. Most of what I have read about generic small businesses says that one shouldn't even think about drawing any salary for the first three years. And they also say the number one reason for failure is undercapitalization. Sound familiar, when every starting trader you seem to hear talks about his $3K, $5K, or $10K (this big is a rarity) account? And when you tell them that's not enough to make a go at this business you get the exact same answer every single time: 'Well, that's all I have, and I'd rather take a shot with that than give up on my dream.' I got to thinking about all this when reading this thread here:

http://www.mypivots.com/forum/topic.asp?TOPIC_ID=4216&whichpage=3

and T-tree4me's post at the top of that page.

Joe mentions 10,000 hours. I have about 32,000 hours, as my best approximation, of screen time at this point. Others have much more. Many of us put a lot more than 40 hours a week into this. At Joe's quoted numbers, he might be doing 50-55 a week or more, maybe some time on weekends. So someone at even 50 hours a week, that's 2,500 a year (I think I've averaged about 60 hours a week?), so 3-5 years, as I mentioned, would be 7,500-12,500 hours, right in line with what Joe suggested. I consider that the absolute minimum time this will take to develop some consistency.

Yes, many will argue otherwise, many will tell of 'mastering' trading in months, and so on. Sure, there may be exceptions. But for the average person, I suggest you be realistic. And for all you wildly successful traders out there with months or a few years in, talk to me five years from now, or ten, and tell me how you are doing, and if you really did keep that equity curve rising from year one or two to year five or ten. If so, good for you. For the rest of us mortals, please take a realistic approach so that you have the best chance of making a go of it, and not being disappointed. This is just like being a doctor, commercial airline pilot, architect, professional athlete, or any high-powered profession, in my opinion.
Well said Joe and Jim. I have a lot to add to this topic but I don't have the time right now.
It's amazing to me how many posts there are about setups in this forum, and about trading services, and look how little this topic has drawn. That tells you something.
LOL, I was thinking the same thing when I replied. I thinks its pretty apparent that not too many can trade for a living or even be successful at this business. Heck, I consider myself a better trader than most but I also own a construction company that does very well, and I dont plan on shutting it down any time soon. Jim, it looks like you trade and sell a service. Does anyone really trade for a living? Joe? Im only 33 and have been trading for 15 years now and I would like to do it full time by the time Im 40. I just want fat bank accounts first so I dont have to worry about making a profit every day or every week for that matter. For me to trade successfully I need very little stress, and right now that means having another business or job that makes money every day. I will add more later
Well this is my second year and so far I've been profitable (110%), have to be honest 50~60% of that was luck, as I wasn't confident of those trades. lol.

I agree with Jim and Joe on giving yourself atleast 5-6 years on reading charts and within those years if you are able to keep your head above the water is just outstanding, rest patience will pay off. Maybe that's why I haven't given up on my day job yet :-)
quote:
Originally posted by rainman99

LOL, I was thinking the same thing when I replied. I thinks its pretty apparent that not too many can trade for a living or even be successful at this business. Heck, I consider myself a better trader than most but I also own a construction company that does very well, and I dont plan on shutting it down any time soon. Jim, it looks like you trade and sell a service. Does anyone really trade for a living? Joe? Im only 33 and have been trading for 15 years now and I would like to do it full time by the time Im 40. I just want fat bank accounts first so I dont have to worry about making a profit every day or every week for that matter. For me to trade successfully I need very little stress, and right now that means having another business or job that makes money every day. I will add more later

Rainman, I'm not exactly sure what you mean when you refer to me in the context you did above? As far as what I do, I don't really sell any 'services'. I don't have any chat room, no monthly services or stock picks, or the like. I mentor a very small handful of very carefully selected students per year, perhaps 3-5, with the number one criterion being willingness to work hard. Do the math on that and you can see how little that amounts to. I also sell my book set. Again, look at what type of material that is, and tell me how many people you think invest in a 2,000 page book set based on Fibonacci work. Once you do all that math you can see I'm not a 'vender'. I have no ads on my website, and take in no other revenue for having the website. My focus is, and always has been, my own trading. I have no other job, and haven't since I started those 32,000 hours. Perhaps all that was clear, but in case it wasn't, it is now.
Sorry Jim, wasnt trying to offend. I guess I should have looked closer at your site. My point remains the same, Most cant do this full time, part time or any time profitable.
Rainman,

No offense taken. I was merely saying some do this or are trying/attempting to do it full time with no other job. On the other hand, I tell my students that they should consider other income sources in addition to their trading for two reasons. One is diversity, which I think is always a good thing, even for people with just regular jobs. Look what happens to them when they get laid off if they have no other income sources. The second reason is for the reason you mentioned, to take the pressure off for consistent production with the trading, especially when new to doing it for the sole purpose of income. Although in the long run I think it would be best to be able to perform under pressure without being too stressed by the pressure, I think that is something that may take quite awhile to learn, and for some people, they may never learn to be able to do it. But all is not lost, they can simply have multiple streams of income and still work in their own trading business, with little or no pressure to perform.

And yes, as per my 99% analogy in my previous reply, I agree completely most won't be able to trade full time (or even part time), just as most won't be able to be successful in their own business long-term.
I have come to My Pivots for several years, checking out the pivots, and ecomomic news. I have never posted but this thread is worth posting to.

I have been a full time S&P trader since 1997. It has taken me blood, sweat, and years, to learn this craft. Often when asked how long it took, my standard answer is "Two hours short of a divorce".

I have talked with many traders over the years. The lure of day trading is strong. Many are called but few are chosen. As Jim points out, it is not unlike any small business. It's not trading that's the problem, it's just people. Not everyone is cut out to run their own business trading or otherwise.

So many come to day trading for the freedom it will bring. However few ever realize that freedom. They are tied to a ball and chain that look just like a PC and monitor slaving away, pouring over charts, day after day, after the close, late at night, all through the weekend. I know, I was that guy.

The truth is trading is very, very easy. Controlling ourselves, our mindset, our behavior, that is the hard part. That is what is meant by "We trade ourselves, not the market". We complicate such a simple process with all our ideas, preconceived notions, indicators, and what not.

We expect to be able to take a course, or read a book, and then go out and make as much or more money then doctors and lawyers who spent years in school. AND we all want it with a guarantee!

IF you go to Harvard, it will cost you all said and done about $250K for your education. Do they give you a guarantee of success? That you will find a job and make all the money you dreamed of? They don't even guarantee you will graduate!!! Yet you still have to pay up front. Who can guarantee you or anyone else will follow a simple set of instructions? Or that you will stick with your trading plan? That you won't move your stop, or fail to take a trade because the last one or two, even three were losers? That's the part of trading no one ever talks about and it's what I believe to be the deal breaker for most.

Professional traders, those that have made it, keept things simple, they work their plan, they know the odds are in their favor, and they realize that if they do those things, the BY PRODUCT of sound trading is steady and consisten profits, NOT THE GOAL of trading!

So in the end what does it take to be a good trader? That is up to you and how simple and straightforward you can keep it. Learn to read a chart, then, maybe an indicator if you feel the need. Forget about 5 monitors and multiple timeframes, it's not necessary, at least not for me. And if you won't let it go now, at least consider it for the future....1M charts are not the answer....LOL!

Master one market, one chart, and one setup and you will be richly rewarded.

Good Luck.

rainman, yes I trade for a living. Its not as glamors as I once thought though (I still love it all the same). I have systems that must be followed...so no 40 hours a week of fishing or at the gym all day that I once thought it would be. I have to watch every tick of the market waiting for one of my set-ups because "most" are up to my discretion and can't be automated. Its real work, real discipline, and a major headache sometimes. My problem was following my system 100% takes a tremendous amount of nerve to do that. But after it working time after time my feelings being wrong and the system being right you tend to have more faith in your work. And that faith in your work is what took the most time for me. The systems came rather easy/very simple to me, the hard part was doing it.


and well said JCX
“Well everything gets on you with time. You have to devote your efforts in specializing in trading”