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.

Greg,

I invite you you check out my website at www.kanetrading.com. Although my approach is vastly different than most, if not all, traders you will see here, it may help you with one important concept. My approach is based on the concept that trading, as a business, is as difficult and requires as much work as any highly skilled profession like commercial airline pilot, doctor, architect, etc. If one thinks he or she will succeed long-term with less work than it takes for those other professions, I think that's unrealistic. If anyone reading this has succeeded with far less effort, my hat is off to you, but you are the rare exception, in my opinion. Myself, I have approximately 27,000 screen hours in at last count, and I keep learning every day.

If you read some of the free articles on my website you will get a handle on my emphasis on hard work, and putting in the time. When one trades they are going up against some serious people, people with immense computer power, big money behind them, and an insane amount of experience, not to mention possible inside information and other illegal tactics. To think one can use a readily available program, a simple highly published technique, and a few hours of time and take their money from them, it's just not realistic.

Imagine reading a few books, maybe going into a 'guide you through it' chat room, and then doing neurosurgery. See how funny that sounds? Yet people think they can trade that way. I do some mentoring, and I have talked to doctors who contacted me and wanted to quit their practice and trade, and wanted to know if they could learn to do it in one weekend. When I said it may take as much time, work, and money as their medical degree they completely wouldn't accept that. The problem, as I see it, is that people simply won't accept what it takes to do this business. I firmly believe some can succeed, like in other professions, if they are well-capitalized, and do all the work required. The real issue is the unrealistic expectations.

I hope this helps, and I hope some of the free material on my website is of some use to you.

Yes, some folks make money trading. I feed my family trading. You are right the world is full of those that want you to pay thousands for their trading system. Most of them cant trade themselves and most that buy these systems fail. Failure may be because of the system but just as often it is because people are uinrealistic about trading. MBA takes two years and thousands of dollars. Law School 3 yet folks things that a few days or weeks in a tading class and boom the cash will just roll in.
It takes screen time to learn how markets move it usually takes a few thousand in losses before you learn if a method works for you or you are able to learn the right way to trade for you.
You must also have what it takes mentally. You must be able to accept losing money. I have one or more losing trades almost everyday. I have far more winners but until you learn the mental toughness it takes to act on each and every set up your method gives you and learn when to exit or change your gameplan you will never be able to make money trading.
If you had a chat room where I could make voice calls as I trade you would see that you can earn a good living trading. I am not offering to teach because that would be a waste of my time and your money. Traders that make money eventually do because they teach themselves. The information you need is publically available.First though you have to believe it is possible. I had the advantage of growing up in Chicago and saw cab drives become millionaires in pits. So I knew it could be done.
Good luck to you.

Thank you jimkane and hunterone for your nice comments. I really do appreciate them.

I guess it all does come down to expectations and also capitalization.

I am uncertain about both. What is a realistic expectation for a “good” trader to net per year. Five percent? Ten percent? More? I don’t know.

I suppose if one knew these answers then if one became successful trading they would know what amount of capital they needed. For instance, 5% of a million dollar investment would earn you 50k per year. Then it would be a question of do you have a million dollars to fund your account with, and can you live on 50k per year?

But without knowing what a realistic expectation is then it is very hard to know what amount of capital investment is required.

If either of you or anyone else has any thoughts or opinions on this I would be grateful to hear from you.

Thanks again.

Greg,

You may want to read my two articles 'Realistic Expectations', Part I and II, for some of my thoughts. I would look at rates of return of various CTA's and hedge fund traders and see what figures they generate. Keep in mind these are supposedly the 'best of the best', but they are also working huge sums of money in many cases, and a smaller trader not dealing with the same liquidity issues theoretically may be able to perform a bit better.

Greg
You are comparing apples and shoes. If all you want is 5% return invest in bonds and get that risk free. Money manager are not traders their goals methods and needs are different. If you want to compare and you are looking to trade for a living then your expectations should be based on floor traders. They earn their income from daytrading. Your minimum expectation should be $500 per contract per week if you are trading mini products. That is a very doable number. For me that is a very bad week. That is 2 es pts a day.
The amount of capital is relevant only in that the more you have the larger stops you can handle and therefore the longer time frames you can trade on. For example if you fund your account with $100,000 and trade a 10 lot you can handle a 5 point stop with out a problem. Thus you can base your trades from longer term charts and use the faster time frame charts for your entry and place you stop based on the longer time frame chart. You can stay in a longer term trend. With $10,000 in your account your stops must come off your shorter time frame trading charts. A five point pull back kills your account. Even trading a 1 lot you will get sick to your stomach on a 5 point loss with a $10,000 account. Also if all you have is $10,000 you will not mentally feel free to trade unless you get a rush from risk taking . Many traders do by the way.

Greg,

Good question. I am looking at this forum because I would like to ask the same. I've been trading for years and haven't made a dime.

People and books always mention the 5% of traders who are successful, I would like to see replies from some of them if any are in here.

I read a book many years ago which impressed me that trading is a zero sum game for just about everyone. The book was Reminiscences of a Stock Operator. The guy in it was considered one of the best traders. Despite it, he found himself broke several times, even after thirty years of doing it.

I also recently asked someone I know who is the manager of one of the quant funds in New York about trading. His response was that the markets are a random walk and its a waste of time to trade.

Dismal thoughts, aren't they.

So if there's anyone who is actually successful at this, we'd like to hear from you.

Michael

quote:

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Originally posted by Greg

Does anyone really make money trading futures?

I am just wondering.

---

Jim,

That's fine and all, but I'm sure Greg, and I know myself, are not in the category of people who don't devote a lot of time and effort into their trading. To the contrary, being an intelligent person who learns from my mistakes, I have spent a lot of effort into trying to be successful at trading.

Actually, compared to many people, I could be considered successful by default, because in the last several years of trading, I haven't lost any money (including commissions). Neither have I made any.

So your answer doesn't give us anything new or answer Greg's question. One may work at trading just as hard as a doctor or airline pilot, and not make a dime. One may put in 27,000 hours of screen time, and have nothing to show for it.

quote:

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Originally posted by jimkane

Greg,

I invite you you check out my website at www.kanetrading.com. Although my approach is vastly different than most, if not all, traders you will see here, it may help you with one important concept. My approach is based on the concept that trading, as a business, is as difficult and requires as much work as any highly skilled profession like commercial airline pilot, doctor, architect, etc. If one thinks he or she will succeed long-term with less work than it takes for those other professions, I think that's unrealistic. If anyone reading this has succeeded with far less effort, my hat is off to you, but you are the rare exception, in my opinion. Myself, I have approximately 27,000 screen hours in at last count, and I keep learning every day.

If you read some of the free articles on my website you will get a handle on my emphasis on hard work, and putting in the time. When one trades they are going up against some serious people, people with immense computer power, big money behind them, and an insane amount of experience, not to mention possible inside information and other illegal tactics. To think one can use a readily available program, a simple highly published technique, and a few hours of time and take their money from them, it's just not realistic.

Imagine reading a few books, maybe going into a 'guide you through it' chat room, and then doing neurosurgery. See how funny that sounds? Yet people think they can trade that way. I do some mentoring, and I have talked to doctors who contacted me and wanted to quit their practice and trade, and wanted to know if they could learn to do it in one weekend. When I said it may take as much time, work, and money as their medical degree they completely wouldn't accept that. The problem, as I see it, is that people simply won't accept what it takes to do this business. I firmly believe some can succeed, like in other professions, if they are well-capitalized, and do all the work required. The real issue is the unrealistic expectations.

I hope this helps, and I hope some of the free material on my website is of some use to you.

---

No such thing as a realistic estimate. A reasonable goal is not to lose your money. Beyond that it's an unknown. Saying 5% a year is not realistic because the amount of unpredictability in the markets is huge.

Have you ever seen pictures of professional floor traders in the pit when the market crashes?

quote:

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Originally posted by Greg

Thank you jimkane and hunterone for your nice comments. I really do appreciate them.

I guess it all does come down to expectations and also capitalization.

I am uncertain about both. What is a realistic expectation for a “good” trader to net per year. Five percent? Ten percent? More? I don’t know.

I suppose if one knew these answers then if one became successful trading they would know what amount of capital they needed. For instance, 5% of a million dollar investment would earn you 50k per year. Then it would be a question of do you have a million dollars to fund your account with, and can you live on 50k per year?

But without knowing what a realistic expectation is then it is very hard to know what amount of capital investment is required.

If either of you or anyone else has any thoughts or opinions on this I would be grateful to hear from you.

Thanks again.

---

Floor traders make their income from slippage and because they don't pay commissions to trade, not necessarily from being able to predict market trends.

quote:

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Originally posted by hunterone

Greg
You are comparing apples and shoes. If all you want is 5% return invest in bonds and get that risk free. Money manager are not traders their goals methods and needs are different. If you want to compare and you are looking to trade for a living then your expectations should be based on floor traders. They earn their income from daytrading. Your minimum expectation should be $500 per contract per week if you are trading mini products. That is a very doable number. For me that is a very bad week. That is 2 es pts a day.
The amount of capital is relevant only in that the more you have the larger stops you can handle and therefore the longer time frames you can trade on. For example if you fund your account with $100,000 and trade a 10 lot you can handle a 5 point stop with out a problem. Thus you can base your trades from longer term charts and use the faster time frame charts for your entry and place you stop based on the longer time frame chart. You can stay in a longer term trend. With $10,000 in your account your stops must come off your shorter time frame trading charts. A five point pull back kills your account. Even trading a 1 lot you will get sick to your stomach on a 5 point loss with a $10,000 account. Also if all you have is $10,000 you will not mentally feel free to trade unless you get a rush from risk taking . Many traders do by the way.

---

M,

My point was that I feel there are people making money trading, but that they have put in a huge amount of time to attain that success, and 'success' is defined with realistic goals, not infommercial style goals. Just like going to med school, it doesn't guarantee you'll become a doctor. It says that all doctors go to med school and put all that time in. Some, like you cite, put in those tens of thousands of hours and have zero to show for it, no medical degree, nothing. That's the way it is with many difficult and challenging professions.

I think this is a rather unique profession in that it has a large group of 'vendors' that try to convince people they can make fortunes with little time invested, and little risk. You don't see 'vendors' telling people they can be doctors in a weekend, and make plastic surgery money. You don't see 'learn to fly a commercial jet in a few hours a week' courses. But you see it in trading, by the thousands. This brings in a lot of people who aren't going to do a medical degree worth of work, in a good program, and then see if they are one of the ones who has what it takes, like in medicine, or not. They evaluate after way less time than it takes to be in a position to evaluate. That was what I was trying to point out.

One of the things I see a lot on forums, and in talking with people who contact me, is that there is a lot of anger out there, most of it stemming, I feel, from people's failure at trading, and from being 'taken' by the charletans. I think having a dream of being on easy street and doing it with little effort or risk, is something people want (and why the vendors succeed so well), and when that dream is lost, it brings up a lot of emotions for people. I also see a lot of anger when I even mention to people that they should not realistically expect success without putting in the huge hours. It doesn't in any way guarantee success, no more than does a shot at medical school, but I feel it is a prerequisite to put oneself in a position for possible success. And nothing is further from what people want to hear...

quote:

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Originally posted by mmartinez

Jim,

That's fine and all, but I'm sure Greg, and I know myself, are not in the category of people who don't devote a lot of time and effort into their trading. To the contrary, being an intelligent person who learns from my mistakes, I have spent a lot of effort into trying to be successful at trading.

Actually, compared to many people, I could be considered successful by default, because in the last several years of trading, I haven't lost any money (including commissions). Neither have I made any.

So your answer doesn't give us anything new or answer Greg's question. One may work at trading just as hard as a doctor or airline pilot, and not make a dime. One may put in 27,000 hours of screen time, and have nothing to show for it.

---

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