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.

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Originally posted by CharterJoe

I'll give you my ES analysis for tomorrow free.

So I stuck my neck out on the line, now you do the same and answer my question, how in the world does the ES make a high/low 30% of the time in the first half hour when one 1/2 hour ought to be only a 8% odds of doing so.

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You're confused on the premise of the random walk theory. It says the future asset prices are unpredictable. Who cares when highs and lows occur? You still don't know what those highs and lows will be.

Wait a second. You're saying either the high or the low will hit in the first half hour? What good is that if you don't know which one it will be beforehand?

I'm not getting how you think you can build a trading method on this.

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Originally posted by CharterJoe

AA my #2

5/11 HOD and LOD was 1st and 2nd bar
5/12 HOD was 1st 15min bar
5/13 HOD was 1st 15min bar
5/14 LOD was 2nd 15min bar
5/15 LOD and HOD was 1st 30min
5/18 LOD was 1st 15min bar
5/19 LOD was 1st 15min bar
5/20 HOD was 4th 15min bar
5/21 HOD was 1st 15min bar
5/22 HOD was 1st bar
5/26 LOD was 1st bar
5/27 HOD was 4th bar
5/28 HOD was 1st bar
5/29 HOD was 1st bar
6/01 LOD was 1st bar
6/02 LOD was 1st bar
6/03 HOD was 1st bar
6/04 LOD was 2nd bar
6/05 AA went over a nickel over the high in the 1st bar and that was the HOD
6/08 LOD was 2nd bar
6/09 LOD was a dime below 1st 15min low. But no LOD in first hour.


There are 26 15min bars in a day, how can the mass majority hit in the first 2 in a random market?

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quote:

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Originally posted by mmartinez

Wait a second. You're saying either the high or the low will hit in the first half hour? What good is that if you don't know which one it will be beforehand?

I'm not getting how you think you can build a trading method on this.

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Thats why I told you to read mini IB, I built a system based off of this and trade it every day. I don't think I can build a system I know I can, and I have, and will continue too make money off it.

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Originally posted by mmartinez

quote:

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Originally posted by CharterJoe

I'll give you my ES analysis for tomorrow free.

So I stuck my neck out on the line, now you do the same and answer my question, how in the world does the ES make a high/low 30% of the time in the first half hour when one 1/2 hour ought to be only a 8% odds of doing so.

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You're confused on the premise of the random walk theory. It says the future asset prices are unpredictable. Who cares when highs and lows occur? You still don't know what those highs and lows will be.

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I am not confused you are...from investopedia " In short, random walk says that stocks take a random and unpredictable path. The chance of a stock's future price going up is the same as it going down. A follower of random walk believes it is impossible to outperform the market without assuming additional risk. In his book, Malkiel preaches that both technical analysis and fundamental analysis are largely a waste of time and are still unproven in outperforming the markets.

Malkiel constantly states that a long-term buy-and-hold strategy is the best and that individuals should not attempt to time the markets."

The random theory is no way limited to tops and bottoms but to price as well. I would rather know about what time a market will peak/bottom rather what area, and both are even better.


Even If I wake up tomorrow take on too much risk and lose all I have invested. I will still be in the green, in 2007 I built a home paid for by trading no mortgage, 2 cars paid for, and furniture all paid for by random trading. Your problem is that you are to smart, you lost a lot of money and instead of getting understanding and getting that money back you have listened to some nut job about how its not your fault that you lost your shirt in the market, its just a random walk and your still smart because no one can beat it, or at least thats what you are telling yourself.

And no wonder you lost money in the market I proved to you that in the last month F mad a hi/lo 100% of the time in the first hour and 75% of the time was in the first bar. If you cannot make money with that, then you need to get your money out of the market because you are not ever going to be a profitable trader, because you have convinced yourself all are losers.

So would you say the following numbers are roughly accurate (you said you've traded a total of four years)?

* round trip trades from 2000-2002 = ~780 (52weeks * 2 years * 5 rt /week * 1.5 for allowance)
and from 2006-present = ~2600 (52 weeks * 2 years * 5 rt / day)

Okay, so in your lifetime, you've made 3380 round turn trades? What's your total lifetime P/L (either percentage of injected capital or raw numbers I don't care)? Don't exclude any real trades.

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Originally posted by CharterJoe

No what I said did not confirm what you said I made over 300K and lost 15k how in the world is that random.

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Many a trader has made the same exact statement, then subsequently went on to lose all their winnings.

m

Damn Joe ... hard to argue with those stats ... then again, you need similar stats going back to 1492 and the scriblings of Columbus in his trading diary, all documented for every trading day! Somehow, I doubt that'd even be satisfactory. Maybe it's not so much the "random walk theory" of the markets, but rather the "random successful trader theory" of the markets.

We're venturing into the philosophy of knowledge and DEDUCTIVE vs. INDUCTIVE reasoning. Karl Popper's black swan, in fact, bolsters the ANTI-RANDOM MARKET theory and, in effect, supports the (so called) RANDOM SUCCESSFUL TRADER theory. Even after reading Taleb's book(s) revisiting this subject, I found it interesting that I and several long term trading buddies were trading with consistent success over the years and currently.

Basically, when stripped down, mmartinez is hanging his hat on the paradigm of the following example that most traders have likely heard/read:

Have everyone in the U.S. flip a quarter 100 times. Then accumulate the data regarding how many times the flip came up heads and the number of occurrences that were tails for each person. Then slap a bell curve on it! Btw, it will be a beautifully symmetrical bell shape. And by god, there are some folks, just a few, who flipped heads over 90 times out of 100 flips. They are simply some damn good “heads flippers,” right?

Ahhh, randomness … the good “heads flippers” will, over time, revert back to the 50/50 mean, as will the kick-ass “tail flippers.”

But trading is not based purely upon chance/occurrences of a 50/50 coin toss … it is not a valid, analogous portrayal!

Jim has gone out of his way to “document” the black swan … offering up his track record. But mmartinez is, a priori, color-blind and will only see white swans, even when presented with more than one black swan that has flown the markets for years.

But if you have a lifetime stop out you can't lose it all, why is that not getting through? Do you not understand what a lifetime stop out is? Say Joe has made $1 mil to date, as an example. He stops out at a $200K drawdown and retires. How can he give back the remaining $800K? He's no longer trading. If you say he would not do that, that has zero to do with the market, that would be a psychological issue. Mathematically he couldn't ever give it back. Your point just doesn't make any sense.

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Originally posted by pt_emini

... I love this thread...

... Jim your like a moth drawn to the flame...

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PT, that is so well put, and so true...

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Originally posted by mmartinez

So would you say the following numbers are roughly accurate (you said you've traded a total of four years)?

* round trip trades from 2000-2002 = ~780 (52weeks * 2 years * 5 rt /week * 1.5 for allowance)
and from 2006-present = ~2600 (52 weeks * 2 years * 5 rt / day)

Okay, so in your lifetime, you've made 3380 round turn trades? What's your total lifetime P/L (either percentage of injected capital or raw numbers I don't care)? Don't exclude any real trades.

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I started a construction biz with 230,000 after trading 10,000 which was 2300% in 2years. Which was about 100% a month (not compounded)I did well in the housing market and manged to exit at the peak, I believe was due in part to my market experience. I have also taken family accounts and doubled them in this same time, they were smaller accounts. I also traded while I was building homes nothing major there
worth posting there winning or losing. I was trading the $2 dow just for fun. LOL it drove my broker nuts. What ever happened to the $2 dow?

I avg now about 25% a month but I have more in the market, some months better some worse about 1/4 comes from stocks and options longer term trading (2-10 days). A real good month for me is 40% but that means I am too leveraged which is not a good idea for the long term, and my last " real good" month was oct 08'. I start with a base number in my account anything over that comes out, If its a good month I have a spare non trading account it goes into, so if I go bust on any of my accounts I have something to come back on after a long break. I have a short term account for the NQ, a longer term ES account, and an account that I trade stock for at least a week and also an options account that I try and hit every swing over 20 points on the S&P. I think I am now well rounded in many time frames and I have not had a losing month since Feb 2007 and before that was 2002. And the losing months were not as large as the winners. My normal week goes like 3 winners one flat and one lost. My typical month goes like 3 weeks win, 1 week slight loss or flat. If I took 5k I know I could double it in 2 weeks, if I used day trading margins, but I think it would eventually catch up with you.

Sure sounds more like skill than random luck to me. But what do I know? Still not sure how you are going to give back that house and those cars, though, Joe, since they are no longer in the market... I guess after you lose all those accounts you'll cash the house and cars in, put that into accounts, and then grind those down to zero??? As everyone can see, money management plays into this, and if proper money management is used, and not hedge fund all in gambling, it is almost impossible to give it all back.

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