Does anyone really make money trading futures?

Does anyone really make money trading futures?

I am just wondering.

I know I don't. I have tried all the indicators and the chat room gurus, and none of them make money.

I have a suspicion that a lot of the chat rooms for emini trading are just for hobbyists and market enthusiasts and not for serious traders trying to make a business out of trading.

For any new traders out there please be very cautious of paying anyone to mentor you or signing up for training or a chat room. From what I have seen the only people making money in these deals is the mentor, the chat room owner or the author of the training manual.

I would love to hear from you if you are a successful trader making 20% off your account or better over the past year. I know only 5 to 10 percent of traders are supposed to be successful, but I am beginning to think that zero percent of traders are successful over the long haul. Certainly anyone can have a streak of luck and rack up a few good months where they dramatically increase their account size, but these people are normally big risk takers and eventually they blow out their accounts by taking the exact same risks that help double their accounts in the first place.

Thanks in advance for any response.

quote:

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Originally posted by mmartinez

To answer the original question, I've concluded that the answer is no. I've made the following observations:

1. Wall Street professionals who work in trading pits make money by trading other people's money and taking a commission, not from knowing future direction of prices

2. Anybody else who makes money - it is the result of luck or insider trading (cons).

3. Studies were done in the 1960s showing that asset prices are random and not predictable. These were statistical studies. Subsequent mathematical analysis over the years has upheld those results.

4. People who have made some money trading incorrectly assume it was due to skill not luck. Same with gamblers.

5. People who have made some money trading incorrectly believe it is repeatable. Same with gamblers.

6. The majority of people who invest and trade their money were led to believe that asset prices are predictable.

7. Professionals who convince the public to invest and trade, fall into the following categories:

7.a. Those who make money by selling investment products (books, subscriptions, etc.) to you and me

7.b. Those who are company executives and want to raise capital by selling stock. The capital benefits their company, not you and me.

7.c. Those who make commissions from your trades

8. There is a huge amount of advertising aimed at convincing the public that investing in stocks, gold, etc. makes sense. The purpose of this advertising is to take money out of the hands of the public and put it in the hands of the advertisers.

9. There is little to no advertising warning the public that asset prices are not predictable.

m

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I consider myself a profitable, professional trader. I don't sell anything nor do I intend to do so. I am almost 26 years old. My dad is a futures and stock longer term trader. I was home schooled in through my high school years and my dad taught me econ 101 and trading starting in oct 98 He gave me a 10,000.00 account when I was almost 16, I paper traded and when I was profitable started day trading. Trading back then was simple just buy any brand new .com when it was down and wait a few hours. After the bubble burst so did the 900% we I made in a short time. I lost when we shifted from long term bull too bear.

Then I went down the road of hand drawn P&F charts with some what we called gann numbers which were basic fibo numbers and natural S/R numbers. After there were no .com hot moving stocks I started trading options on the well known stock names mostly puts. My trading options came in the big E-bear from 2000-2002 I did very well during this time and draw down was very small I was making at least a grand a week. Not near as much as the years before but making money. For some unknown reason to me I hit a long dry spell that lasted about 6 months. I was not making anything, and as a matter of fact was down about 2500 for the year. Everything I was doing resulted in a loss. This was 2002 I quit trading because I was almost out of savings and paniced so I went and got my trading account and started a construction business early 2003 I built 9 homes in about 24 months.

By 2004 I had heard of the Dow e-mini, for the first time and started trading them. I started doing well using a basic counter trend system using square of nine numbers and a couple indicators. I had been trading the dow for a year and doing alright. Nothing like before but I loved the emini I saw lots of promise. But it was very had to trade and run a business so in aug of 2005 while on vacation in Isle of Palms SC I just got finished watching CNBC and the dow was up like 300 points or something. I had decided to finish the project I was on and go back to trading. No matter what I was going to be a day trader again, I had given up to soon because of a bad day in a bad month. I wanted to do what I loved to do, and what I was good at. In Jan of 2006, 4 months later I started trading again full time.

I started losing again, about $150 a day. I threw all the charts away with all the indicators. Striped everything down I had. And was left only with RSI on a 30 min chart for options, MACD on a tick chart, and square of nine. I started scalping only taking a small amount off the ES and NQ's only I was trading too many markets. I came up with a system with those basic things, that system is here on this site in my posts. Nine months later in Oct 2006 It clicked, my system turned into a money machine and I started trading currency markets at night. in 11 days I had made back the 24k I had lost. And have profitable ever since. I have since dropped the night trading, and only trade RTH. I have only had one losing month since then and that was Feb 27 2007 I lost 12k in one trade. Due in part to just having my first child and building my first home which was built on trading profits alone.

"Try to be logical and objective at all times, and do not let your
emotions and eternal optimism or pessimism get in the way. When
making your plans, always prepare for the worst--and then be grateful
for your good fortune when the worst doesn't happen. When the worst
does happen, be grateful for your foresight and preparedness; you
will survive and prosper"...Charles LeBeau / Technical Traders Guide
To Computer Analysis Of The Futures Market

quote:

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Originally posted by mmartinez

To answer the original question, I've concluded that the answer is no. I've made the following observations:

1. Wall Street professionals who work in trading pits make money by trading other people's money and taking a commission, not from knowing future direction of prices

2. Anybody else who makes money - it is the result of luck or insider trading (cons).

3. Studies were done in the 1960s showing that asset prices are random and not predictable. These were statistical studies. Subsequent mathematical analysis over the years has upheld those results.

4. People who have made some money trading incorrectly assume it was due to skill not luck. Same with gamblers.

5. People who have made some money trading incorrectly believe it is repeatable. Same with gamblers.

6. The majority of people who invest and trade their money were led to believe that asset prices are predictable.

7. Professionals who convince the public to invest and trade, fall into the following categories:

7.a. Those who make money by selling investment products (books, subscriptions, etc.) to you and me

7.b. Those who are company executives and want to raise capital by selling stock. The capital benefits their company, not you and me.

7.c. Those who make commissions from your trades

8. There is a huge amount of advertising aimed at convincing the public that investing in stocks, gold, etc. makes sense. The purpose of this advertising is to take money out of the hands of the public and put it in the hands of the advertisers.

9. There is little to no advertising warning the public that asset prices are not predictable.

m

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PT, VO, Kool, you guys beg to differ on this? Since I 'sell products' I will refrain from posting my own thoughts. I know PT has some good numbers because we discussed this in this thread:

http://www.mypivots.com/forum/topic.asp?TOPIC_ID=2715

as well as some other traders numbers.

Jim Kane,

Are you the Jim Kane that was recently in Stocks and commodities mag. about advanced GET?

Hmmm, no, but that's kind of odd, another Jim Kane into this type of trading? I need to check on that...

CharterJoe,

Can you tell me what month/year issue and page, maybe the artice title for that? I can't seem to find it. I've been seraching around on Google and can't find much, either, but did see a post by a Jim Kane on the Advanced Get trading blog from about a year ago, and that isn't me. You have my curiosity up.

Sorry to send you on a run around for nothing it was just a large advertisement in the issue before last for esignal advanced GET. It was a trader testimony.

Ah, very likely the same person from the Advanced GET blog I found. Still, very curious, not that it is an uncommon name (the spelling is probably the least common, though), but uncommon to have two people with that name into Fibs and Elliott stuff, I think.

P.S. Sorry to get so far off topic here, I should have done this by private communication...

quote:

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Originally posted by jimkane

quote:

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Originally posted by mmartinez

To answer the original question, I've concluded that the answer is no. I've made the following observations:

1. Wall Street professionals who work in trading pits make money by trading other people's money and taking a commission, not from knowing future direction of prices

2. Anybody else who makes money - it is the result of luck or insider trading (cons).

3. Studies were done in the 1960s showing that asset prices are random and not predictable. These were statistical studies. Subsequent mathematical analysis over the years has upheld those results.

4. People who have made some money trading incorrectly assume it was due to skill not luck. Same with gamblers.

5. People who have made some money trading incorrectly believe it is repeatable. Same with gamblers.

6. The majority of people who invest and trade their money were led to believe that asset prices are predictable.

7. Professionals who convince the public to invest and trade, fall into the following categories:

7.a. Those who make money by selling investment products (books, subscriptions, etc.) to you and me

7.b. Those who are company executives and want to raise capital by selling stock. The capital benefits their company, not you and me.

7.c. Those who make commissions from your trades

8. There is a huge amount of advertising aimed at convincing the public that investing in stocks, gold, etc. makes sense. The purpose of this advertising is to take money out of the hands of the public and put it in the hands of the advertisers.

9. There is little to no advertising warning the public that asset prices are not predictable.

m

---

PT, VO, Kool, you guys beg to differ on this? Since I 'sell products' I will refrain from posting my own thoughts. I know PT has some good numbers because we discussed this in this thread:

http://www.mypivots.com/forum/topic.asp?TOPIC_ID=2715

as well as some other traders numbers.

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Why bother? The guy obviously believes he's right and no one is going to convince him otherwise. It's a great road learning how to trde profitably and consistently. I am enjoying the experience more every day. And I am thankfully profitable 16 out of 20 trading days per month.

I guess. Just trying to get good answers out there for people, I suppose...

I consistently profit from futures/futures options, but it took me a long time to figure out the best way for me to do so.

While a set of trading rules is very important, I have found that it is just as, maybe even MORE important, to develop "trading callouses" from getting your butt handed to you repeatedly along the way.

Here's the thing: Any set of rules will only work until they don't. It is normal human psychology that there will come a time (again and again) where you deviate from the rules because A) you have had a string of losses, B) you have had a string of wins and now you have a loss and can't believe you're really supposed to "lose this one," C) you get greedy, D) you get scared for whatever reason, or E) any one of a thousand other things that will cause you to screw up.

I had ups and downs for many years until I thought I had it figured out and had a couple of years of really solid profits. I had my own private island picked out :) (not really, but I did have a condo in mind O/N an island). Then came the financial crisis of 2008 and I learned that while I had a generally good strategy, because times were good I had not developed an appropriate risk control system.

Hundreds of thousands of dollars later... (and that didn't take long at all!) I learned the hard way that my strategy was woefully inadequate when the unexpected happened. It took me a while to brush myself off, but eventually I did.

Since sometime in 2009 my cumulative returns are somewhere around 450%. Over the past 9 years I've found that proper risk control continues to be where I tend to fall short, so I've had some choppiness during this time. About two years ago I tightened things up some more to try to make for a smoother equity curve... this mean that, theoretically, my losing months should NOT be as large as in the past, but my winning months will also not be as large as they were in the past.

That's okay though -- even my cumulative success over the past 9-10 years, when averaged out by month, comes to < 2% a month. I suspect that 2% a month, long term, is about where I'll stay, but the ride should just be smoother along the way.

A return like that may or may not be enough for a particular person--it is for me--but keep in mind if you want to shoot for the stars there's a really good chance you're going to eventually crash land back on earth. It really does come down to being adequately capitalized and having a reasonable return be "enough" for you. By all means, trade even with a small account, because you need that experience to get to the point where you'll know what you're doing when you have the larger account. Just don't expect to turn a tiny account into a massive one along the way or you will probably be disappointed.

-PDG