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 pt_emini

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Originally posted by jimkane

You should also contact Larry Pesavento and Joe Ross, two guys with over 40 years experience trading. I guess they don't really make any money trading? How about Bryce Gilmore? He doesn't make money either? I guess it's good to know that they aren't really profitable over all those years...

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Glass half empty or half full ?

Blair Hull gets my vote on the glass half full side...

http://www.fastcompany.com/magazine/08/hullbenchmark.html

oh and btw, Blair sold his firm to Goldman for $530 million.... might take him a while to lose all that back to the markets ......

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When you actually do contact people like them, and do research into their story, you find that things aren't what you expect. Often these folks have made money apart from trading and it muddles the issue as to how much of their income came from trading. You can't accept their stories at face value according to what a magazine or news story tells you.

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Originally posted by pt_emini
Glass half empty or half full ?

Blair Hull gets my vote on the glass half full side...

http://www.fastcompany.com/magazine/08/hullbenchmark.html

"Winners are smart enough to recognize those situations, patient enough to bet only then, and disciplined enough to keep each bet small."

oh and btw, Blair sold his firm to Goldman for $530 million.... might take him a while to lose all that back to the markets ......

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The system is working. Blair Hull, 52, started his company in 1985 with four people and $1 million. It now has 160 people and more than $80 million of capital.

For some reason the growth from $1 to $80 in 22 years (although impressive) is not as big as I'd have expected. Not sure why...

wow

DT, that's about 22% per year for 22 straight years, compounded once per year. Even compounded quarterly it's still about 20.4%. Sounds pretty impressive to me.

A friend forwarded this article to me this morning. In it, Brett Steenbarger does a nice job of discussing the concept of captialization for new traders. I think this is one of the most overlooked mistakes new traders trip up on in the real-world.

The Capitalization of Traders

Hey, PT, great article. A lot of that was what I was saying way back when I started posting in here about realistic expectations when some people were saying they were getting these outrageous returns. I also referred people to my realistic expectations articles on my website, saying a lot of the same things. Yet many people in here, the more respected people, jumped up and showed their results and said my expectations were way too low.

Here's where I disagree with Brett, a guy who I have tremendous respect for. I disagree based on your own posted numbers (I use your numbers a lot because you were willing to share them, and because I think they are very representative for a high-level trader), PT, so maybe you can tell me what your thoughts are. Brett was saying that when we are averaging say 20 points ES range, it is unrealistic to net 10% of that per day per contract, or 2 points. It is a little confusing about what amount he says is unrealistic, because he refers to 20% of the range, or 4 points, but he also mentions 'several' lots, but then 4 lots, so I think he means netting 2 points per contract on say 2 contracts for 4 points total per day with a 20 point range? Regardless, it's something in there he is discussing, and saying that 2 points per day is unrealistic.

Now, your own numbers for two weeks, and you mentioned they weren't particulary great weeks, were about 1 point net average per trade per contract, and you mentioned you take perhaps 5-8 trades on average per day. The range at that time was similar to today, maybe a little larger. So, that means you were netting 5-8 points per day per contract, and Brett said 2 was unrealistic. I think your numbers are very 'normal' for a highly experienced successful trader. That is just my own opinion, of course, but I think the better traders in here would concur? Most tend to think my expectations are usually too low.

So, how do we resolve this? I surely agree that most traders start out way undercapitalized, and haven't factored in appropriate drawdown into their plans. And I surely am not implying that a trader could potentially achieve results similar to yours without years and years of experience, perhaps even a decade or more. What I wonder, though, is don't you feel that what Brett says about not being able to make that kind of money on a reasonably small account isn't supported by your numbers?

If someone netted one point per trade on say 6 trades a day average on two contracts, that would be $150,000 a year. Most traders use about $5K margin, but I think $10K is much wiser, and one would want some serious cushion, so say a $30K-$50K account. This is exactly what he says can't be done. Or should he have said no new traders can expect this, but a very highly skilled, experienced trader, one of the handful, may be able to? I only wanted to discuss this because he said the successful traders he sees do *not* have an edge of this size.

In all my writings I've leaned towards the conservative side, by a long ways, and my realistic expectations articles line up very well with what Brett is saying. So, I am actually taking the opposite side here of my own writings, based on the numbers I have seen here from the very best traders. I'm not really changing my stance for new traders, I'm just saying that I acknowledge the numbers for the very best traders, and they do seem to exceed the conservative limits for what can be done. Thoughts PT and everyone?

And as an aside, I just realized, I am asking PT and anyone else to possibly publically disagree with Brett, and maybe they don't want to do that? If so, feel free to privately e-mail me.

WOW. All i can say is WOW.

I signed up for this forum to share thougths etc with other traders and perhaps learn a few things. I am new to this profession, five months, and have kicked all the tires i could. if they had a money back or free trial period i tried it. ive read what i can and try and put it all into my thoughts. but at the end of the day, my simple chart and methodology is were i end up. That is the holy grail. if you havent built it and it isnt yours then its not going to work.

Trading is very simple. You either have the discipline to stick with your plan and method or you don't. If you arent satisfied with managed profit margins then you shouldnt be in the game. if you look at a good period slice of any chart you will see a couple of things. the first, is the big move is rare and the second is there are lots of little moves.

i believe that is where the failure rate comes in. most new players want the big hit, the lottery ticket, the all-in bet. that in my opinion is why they are frustrated and lose.

I have been running a very simple plan so far. if i dont see at least 6 ticks from my entry to the first point of resistance, pivot point, murray math whatever you are comfortable with, i dont take the trade. period. i am satisfied with picking up 4 ticks on the first half of my position, bringing the second half to a 1 tick profit and letting it be what it be. my stops are placed at one tick below my entry signal and if the trade falls below and stops me out, i move on.

in the time i have been up and running i have made twelve percent profit. i am ok with that.

my next step is to increase my position size. notice i said the next step and all i am doing is increasing my position size, not my method, although that must be constantly refined, nor my plan.

i believe i will make money at this profession and hopefully, some of the brighter forum folks will start to take advantage of this forum and talk ideas and share both good and bad stories.

mr martinez, i truly believe you have picked the wrong profession for your personality.

hi trader1512,

noticed you said you were trading for 5months, thats as long as the markets have been going up from there lows. When you've been trading a year I would say you have a good chance of making it. Don't break out the champaign yet, we've only had one type of market in the last 5months that is low $vix, nice and slow highs (till today) People under estimate how long it takes to be a trader. I was making more money than I thought possible day after day trade after trade for 2 years and got the wind knocked out of me. It took a very long sabbatical to get over it mentally....but you are correct traders need to find there own system, no one, no book is going to help one be profitable.

Thanks for your insights. yep recognize the market has been up, however, there have been enough down or sideways days for me to feel comfortable. i was just trying to post something positive in what as i read it has become a pretty negative forum thread based on a couple of posters.

i look forward to learning more and thats really why i signed up for this forum. people like you willing to share their thoughts.

hopefully, ill still be around in two years.

Thats great I hope you will be around in 2 years...sounds like you have a proper handle on things. Trading imho only requires one thing, above money, above knowledge is dedication, add dedication to trading and that one ingredient and its only a matter of time before the rest of things start lining up. Take it away and trading is sure to fail. You can always get money and you can always get understanding, but trading must be desired to obtain it...a love of the game not just love of money.

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