Well written and insightful article Geo. I'm curious if you think its possible or practical for people who have never worked a job in financial trading or financial services to learn to trade their own funds successfully with say around $1 million account. Maybe setting much lower hurdles than you would for annual income. Say attempting to NET say $100k-150k a year from that account with limited downside risk. It seems that it would be very difficult for this type of person to develop any type of "edge"? And of course some will say markets are efficient and all news is priced in so fast that your average retail trader like I suggest can gain no advantage.
Having to rely on trading income often leads to emotional decisions that can wreck your performance. Ideally, a trader should have alterative sources of income, or be able to live off of savings (that are not at risk in the trading account) for a few years.
It's very difficult to become a profitable trader by being self-taught. There are a lot of videos on youtube and paid courses out there that claim to teach profitable strategies. At worst, most of this content is created to generate views and make money for the creator, and at best, they might make money for the trader who is running the strategy himself but it doesn't work for traders trying to emulate him (akin to trying to become an NBA player by watching Masterclass videos by Steph Curry).
What ends up happening for most traders who attempt to be self taught is they cycle through multiple strategies and styles trying to figure out what works and burning capital in the process. The benefit of trading at an institution is that you can observe traders around you making and losing money, and learning from their successes and mistakes. You get quick feedback on the benefits and drawbacks of different strategies and styles. You also have mentors who can put you back on track when you make mistakes.
Thanks Geo. This was a great article. I think many people get into trading with accounts that are way too small. While $100,000 is a decent amount of money it doesn’t go very far in trading especially when you start trading full sized futures contracts and such. Risk management is the key as well. Maybe in a future article you can discuss some capital requirements with examples of win rates drawdowns trade sizing risk per trade etc.
Well written and insightful article Geo. I'm curious if you think its possible or practical for people who have never worked a job in financial trading or financial services to learn to trade their own funds successfully with say around $1 million account. Maybe setting much lower hurdles than you would for annual income. Say attempting to NET say $100k-150k a year from that account with limited downside risk. It seems that it would be very difficult for this type of person to develop any type of "edge"? And of course some will say markets are efficient and all news is priced in so fast that your average retail trader like I suggest can gain no advantage.
Having to rely on trading income often leads to emotional decisions that can wreck your performance. Ideally, a trader should have alterative sources of income, or be able to live off of savings (that are not at risk in the trading account) for a few years.
It's very difficult to become a profitable trader by being self-taught. There are a lot of videos on youtube and paid courses out there that claim to teach profitable strategies. At worst, most of this content is created to generate views and make money for the creator, and at best, they might make money for the trader who is running the strategy himself but it doesn't work for traders trying to emulate him (akin to trying to become an NBA player by watching Masterclass videos by Steph Curry).
What ends up happening for most traders who attempt to be self taught is they cycle through multiple strategies and styles trying to figure out what works and burning capital in the process. The benefit of trading at an institution is that you can observe traders around you making and losing money, and learning from their successes and mistakes. You get quick feedback on the benefits and drawbacks of different strategies and styles. You also have mentors who can put you back on track when you make mistakes.
Thanks Geo. This was a great article. I think many people get into trading with accounts that are way too small. While $100,000 is a decent amount of money it doesn’t go very far in trading especially when you start trading full sized futures contracts and such. Risk management is the key as well. Maybe in a future article you can discuss some capital requirements with examples of win rates drawdowns trade sizing risk per trade etc.
Thanks David! Great suggestions for a follow up post.