You know you are a trader when.....? (Serious answers please) | Forex Factory

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You know you are a trader when.....? (Serious answers please)

  • #1
  • First Post: Edited 5:32pm May 8, 2010 4:24pm | Edited 5:32pm
Hi All,

Long time reader first time poster.

I have a serious question, please don't turn this into a .... I can't believe you are asking such a stupid question" thread. If you have nothing valid to contribute please don't bother posting.

I have been consistent in my trading grinding out profits with my strategy. But I have been inconsistent for a VERY loooong time before this. I am considering leaving my ridiculously stressful job to become a full time trader. What's holding me back is YEARS of failures in this market as I've been learning to become consistently profitable.

My question is to you, those few who KNOW you are there, you made it, you found your edge, you are consistent, you are trading a big chunk of change confident, that you can keep doing this month after month after month with a relatively smooth equity/profit curve....

How/when do/did you know that you're not just getting lucky....
How many months or years makes you consistent? How many pips per day/week/month?

Does 50 pips a month make you consistent? Does 1000? (I'm somewhere in between these 2 figures per month)

Seriously guys, I want to leave my piece of crap job and add some serious capital to my account....but due to the ghosts of the past failures I just can't pull the trigger yet.

Help?
  • #2
  • May 8, 2010 9:00pm May 8, 2010 9:00pm
...you know 'you are there' if your are no longer dithering and dathering 'if you are there'.

Either you are confident within yourself that you can do it - or you are not.

Noone and nothing will guarantee your success - no past performance and no one telling you that you are ready.

Its all about you - what you believe and know it's true - about yourself.

Forget the past - live for the now moment - only God knows what the future holds.

My very best wishes to you and your future!
  • #3
  • May 8, 2010 9:14pm May 8, 2010 9:14pm
don't do anything off a few months profits..... if you can go a year or even 2 you will have traded in every type market within reason...at that point you will know..the numbers will be there....the trick is to believe so much in what you are doing that trading for your income doesn't make you blink and close winninig trades to early and losers to late......be very careful in this decision
  • #4
  • May 8, 2010 10:04pm May 8, 2010 10:04pm
Common question. Before you decide to finally leave your current job for good first ask yourself these few questions. If you can answer positively for most of these questions you are ready for full time trading:

1)How long have you been profitable? Can you consistently profit for at least 3 months in a row?
2)If you can consistently be in the greens, are you making more than your current job? If your current job gives you 10k a month and your trading gives you only 5k a month, stick to your job until your trading profits exceeds your old job's monthly salary. I would suggest that you can consistently make more than your salary for at least 3 months in a row.
3)Assuming that you can answer positively for the above 2 questions, if for some freak reason you do not make any profits for the rest of the year, how long can you live? What is your bank reserve like? I am not talking about how much trading money you have. I'm talking about how much money you have in reserve - money that you will not use to trade. This money is specifically for your daily usage. For food, clothes, petrol etc. I would recommend that you have enough to use for at least 3-6 months.

If you can answer positively for all these questions, you are in good shape to go full time. I would suggest that you do not skimp on your cash reserves. A desperate person cannot make good trading decisions. The last thing you want is to be seeing reds on your monthly paper and having low cash reserves. Having that "impending doom" pressure behind your head makes it hard for you to trade. It clouds the judgement. Linger around with this feeling long enough and you will soon find yourself looking for a job again.

GL in your journey
  • #5
  • May 8, 2010 10:25pm May 8, 2010 10:25pm
when you enjoy the fear..
  • #6
  • May 8, 2010 10:44pm May 8, 2010 10:44pm
I started live trading at the end of April and will be changing jobs in October due to a cross country move. If I am making at least what I make at my job now every month for the next 5 months (preferably more per month) then my new job will be FX trading, if not then I will be something else until my results support the career change. I know in my heart that I can be a full time trader, I just need the record to support the move. If you are making between 50 and 2000 pips a month then it all depends on what that means in money and how consistent you have been.

1) If it is as much or more than you make now then that requirement is satisfied.

2) Look at how you made that money. If it is from consistently making your goals (daily, weekly, etc) by following your rules/system/method then you are looking good. If it is because of those few huge wins making up for your many losses then maybe you should wait a little longer and figure out why you are having so many losses.

Cold, efficient consistency is the key to being a full time trader. That is from all the full timers not from me, I am still learning but I am very good learner.
  • #7
  • May 8, 2010 10:46pm May 8, 2010 10:46pm
Quote
You know you are a trader when.....
You make a trade. Trader, like any other job, is just a description of the job. I'm sure we'd like to think that all jobs require a certain amount of expertise, but I think most of us will agree that there are many incompetent people in all occupations. So, I would say trader is just a description for someone who trades, and does not describe skill level.

Quote
Seriously guys, I want to leave my piece of crap job and add some serious capital to my account
A great piece of advice on "when to go pro" I read on a gambling forum, was to only do it when your "day job" is starting to cost you money.

Quote
My question is to you, those few who KNOW you are there, you made it, you found your edge, you are consistent, you are trading a big chunk of change confident, that you can keep doing this month after month after month with a relatively smooth equity/profit curve....
I think we can get confidence from results, but I don't think that is what should make us believe that we're good. Our confidence should come from the trades we make, the methods we apply.

I don't think much of how the term "consistency" is thrown around. We either make good trades, or made trades. Our consistency is in the application of our skill, not in our results. At least that is my opinion.

How long? How many pips? Different for everyone.

Quote
I am considering leaving my ridiculously stressful job to become a full time trader.
Consider that for many people, perhaps the majority, trading is a ridiculously stressful job.

Quote
What's holding me back is YEARS of failures in this market as I've been learning to become consistently profitable.
You're scarred, so I think the last thing you should do is place yourself in a situation where you must perform. You probably have fear in the back of your mind, and if you "go pro" it will become far more significant. What happens if you lose a few trades and start sliding down a psychological slippery slope? I think you are probably best off waiting until you are in a very comfortable position and have far more confidence. I just think you'll likely have a lot of pressure to perform, and this can be extremely detrimental.
  • #8
  • May 8, 2010 10:59pm May 8, 2010 10:59pm
Quoting EurTrender
Hi All,

Long time reader first time poster.
Welcome to the forum, bro.
Sure I am not going to answer your questionnaire moreover doing this publicly.
I tell you what:
Do not quit your job
Look for your win/loss ratio
Market picture is always changing and some strategies become outdated.
The more experience the closer to the reality
  • #9
  • May 9, 2010 1:04am May 9, 2010 1:04am
Does the transition need to be either/or, couldn't you maybe try out full time trading in vacation time from work (sick leave?).

Also be very aware that trading as a primary or sole source of income is a whole different ball game psychologically than trading for a supplementary income and a bit of fun, even more so if you have a family to support.

Being a full time trader obviously has it's benefits but it's not as glamorous as people think. It's a very solitary profession, it can often be quite stressful, there's no paid vacation time, no medical insurance, no office Christmas party, and very little security, if any. Consider it seriously, does that sound like the type of job you really want to do?

To answer your question, inconsistency usually precedes consistency, commonly called the learning curve! You'll instinctively know when you've 'got it', the whole process gels and you become absolutely comfortable and confident with what you're doing. As I think someone else mentioned, if you yourself don't know and need to ask strangers on trading forums then it might suggest you're not quite 'there' yet. Be patient, the market isn't going anywhere!
  • #10
  • May 9, 2010 1:40am May 9, 2010 1:40am
Quoting pipmutt
Being a full time trader obviously has it's benefits but it's not as glamorous as people think. It's a very solitary profession, it can often be quite stressful, there's no paid vacation time, no medical insurance, no office Christmas party, and very little security, if any. Consider it seriously, does that sound like the type of job you really want to do?
Who could do a little work in January, take the rest of the year off, and make a shitload of money? A trader who shorted the euro, that's who. Add to it along the way, even better. Very possible while navigating parties, orgies and stripclubs. Or time with loved ones.

It's only as solitary as you make it; if we're good it is almost a paid vacation; if we're good paying for medical insurance shouldn't be a problem; there are parties everywhere, all the time; and a great many people have realised how little security most jobs have.

Only catch is we need to be half-decent, with enough capital to cope with our individual requirements.
  • #11
  • May 9, 2010 2:18am May 9, 2010 2:18am
Quoting Mr J
Who could do a little work in January, take the rest of the year off, and make a shitload of money? A trader who shorted the euro, that's who. Add to it along the way, even better. Very possible while navigating parties, orgies and stripclubs. Or time with loved ones.

It's only as solitary as you make it; if we're good it is almost a paid vacation; if we're good paying for medical insurance shouldn't be a problem; there are parties everywhere, all the time; and a great many people have realised how little security most jobs have.

Only catch...

That's a lovely fairy tale, I'll remember to tell my kids that one as a bedtime story!

-
  • #12
  • May 9, 2010 8:28am May 9, 2010 8:28am
Quoting pipmutt
That's a lovely fairy tale, I'll remember to tell my kids that one as a bedtime story!

-

As much as it pains me to agree with pip, he's spot on here. The fact is, even though YOU have basically retired and have all the free time in the world, everyone you know is still working a 40 hour week. It's fun for a couple months, but without a solid solution for the fulfilling your daily social needs, it gets old fast.
  • #13
  • May 9, 2010 8:41am May 9, 2010 8:41am
You know you're a trader when...

you trade for a living..?
  • #14
  • May 9, 2010 8:58am May 9, 2010 8:58am
Quoting Darkstar
As much as it pains me to agree with pip, he's spot on here. The fact is, even though YOU have basically retired and have all the free time in the world, everyone you know is still working a 40 hour week. It's fun for a couple months, but without a solid solution for the fulfilling your daily social needs, it gets old fast.
I love you man

Something else I just thought of, trading can be mind-blowingly boring most of the time particularly for a pure technical analyst, probably worse than working on a production line in some factory somewhere! Apart from the money it must be about the most anti-social non-productive job there is!

Heck, whyever do I do it!

I never admit I'm a trader, if anyone asks I say I'm a market analyst, that's usually a conversation killer right there.
  • #15
  • Edited 9:15am May 9, 2010 9:00am | Edited 9:15am
Quoting Darkstar
As much as it pains me to agree with pip, he's spot on here. The fact is, even though YOU have basically retired and have all the free time in the world, everyone you know is still working a 40 hour week. It's fun for a couple months, but without a solid solution for the fulfilling your daily social needs, it gets old fast.
I don't have that problem, but I can see how many people would.

Quote
Something else I just thought of, trading can be mind-blowingly boring most of the time particularly for a pure technical analyst, probably worse than working on a production line in some factory somewhere!
But how many traders just stare at charts all day? I'd shoot myself before doing that. I intentionally trade slower intraday to position trade so I don't have to stay glued to a monitor. So for me, trading isn't boring. I just have to keep an eye on what is happening while I'm doing whatever else (browsing, news, music, cooking, tv etc). If I've built an interday position (which is usually my aim) then even better.
  • #16
  • May 10, 2010 12:55pm May 10, 2010 12:55pm
Hello everyone who replied.

I appreciate your constructive comments and your well wishing.

I saw a lot of good points brought up and I will try to comment on some of them.

Quote
Look at how you made that money. If it is from consistently making your goals (daily, weekly, etc) by following your rules/system/method then you are looking good. If it is because of those few huge wins making up for your many losses then maybe you should wait a little longer and figure out why you are having so many losses.
Good point. I questioned myself on this. Sure I hit some home runs, but I keep trading the same strategy over and over and over...and its working so far. It just happens that some wins are bigger then others, a small win is still green..and they probably add up to more than the home-runs.
Also, I never had a daily, weekly goal before. My goal has been to stay above water, just stay positive month after month. I believe I will now set ...modest goals and try to reach them. This will be my next step in evolution as a trader.

Quote
Cold, efficient consistency is the key to being a full time trader.
Cold efficient consistency....this should be every trader's mantra

Speaking of cold and emotions. It took me years to learn this myself. PAIN TOLERANCE CAN NOT be tough. Trading is 95% emotions and 5% technique. Did you know that its easier to handle a stop loss hit than sitting on a winning position and letting the profits run? Sounds funny huh, well at least that's how it was for me.

I don't get THAT excited about the winners...(ok ok...I do if they are HUGE!)..its like a checkmark in the daily tasklist. Brushed my teeth today, check. Didn't let a winner turn into a looser.....check. For me, winners are a means to an end. Just one step close to leaving my stupid job where I"m not appreciated for my performance and managed by ....(insert appropriate word here that describes your boss)

Here's how a loss feels now....Hmm...guess, I was wrong about the direction of the market. Good thing I placed my stop right here and only lost my max allowed limit. Another opportunity will come soon, and since my winners are bigger than my losers, its all good. Plus...I try to learn something new about the market from EVERY loss I make.

Here's how a break-even feels......oh damn I wasted my time on this trade, I should have rather been out with my beautiful wife or reading a nice book. (Still working on this one)

Here's how a small winner feels like. Green is GOOD. I'm improving my winners/losers ratio.

Quote
But how many traders just stare at charts all day? I'd shoot myself before doing that. I intentionally trade slower intraday to position trade so I don't have to stay glued to a monitor. So for me, trading isn't boring. I just have to keep an eye on what is happening while I'm doing whatever else (browsing, news, music, cooking, tv etc). If I've built an interday position (which is usually my aim) then even better.
Agreed. I look at things the same way. I trade the daily candles only. I thought about it, what the hek am I to do the whole day? Well, I thought about being a "set it and forget it guy" but...even daily trades need management. Moving stops to break-even. Scaling in, out of positions.
Dealing with huge market changing events...which only happen a couple of times a year. But this wouldn't take more than a couple of hours a day.
I guess I would have to find a home hobby...say learn to play the guitar, or lift some weights.

The other option I guess would be to find a reputable Prop shop (hopefully not a bucket shop or arcade) but they probably want at least 3 years trading history.

So here's my plan for now. As of today I'm up roughly 1100 pips in the past month. If am keeping my (hated) job for now. I will set a goal of reaching the same results a second month in a row (plus minus 100 pips)
If I can handle that, I will start looking for small investors. A few months after (Septemberish?) I will start working my way out of my joby-job.

Anyone is welcome to post your thoughts but....constructive comments would be greatly appreciated.


P.S. Since this thread was moved to the Rookie section (I don't mind) here is a tip for everyone who is struggling to be consistent (I feel your pain ... truly)

For anyone who is looking for the Holy Grail, here it is.....make sure your winners are bigger than your losers (unless you can hit winners 90% of the time) It took me 8 years before this rang home. Eight....gees.
  • #17
  • May 10, 2010 4:12pm May 10, 2010 4:12pm
Quoting Mr J
But how many traders just stare at charts all day?
I have no idea. I'm primarily an active intraday trader but I rarely spend all day staring at charts. I'll analyse the charts of numerous currency pairs as well as other markets, across several time frames, I follow (potential) market moving events including daily fundamental data releases, I'll watch price action to get a 'feel' for the market.....etc etc etc

I don't feel the need to find other things to entertain myself while I'm trading, it's my job and I focus on it. If the market's quiet then sure, I'll go off and do something else.

If/when you start trading profitably and maybe for a living then you might understand what I'm talking about.


Quoting EurTrender

I believe I will now set ...modest goals and try to reach them. This will be my next step in evolution as a trader.
Bad idea, the market doesn't care about your goals and evolution, it offers what it offers, regardless.
  • #18
  • May 10, 2010 7:48pm May 10, 2010 7:48pm
Quoting pipmutt
I love you man

Something else I just thought of, trading can be mind-blowingly boring most of the time particularly for a pure technical analyst, probably worse than working on a production line in some factory somewhere! Apart from the money it must be about the most anti-social non-productive job there is!

Heck, whyever do I do it!

I never admit I'm a trader, if anyone asks I say I'm a market analyst, that's usually a conversation killer right there.

"convesation killer" lollll
  • #19
  • May 10, 2010 8:52pm May 10, 2010 8:52pm
Quoting pipmutt
If/when you start trading profitably and maybe for a living then you might understand what I'm talking about.
Don't assume that entertainment means I don't take my job seriously. Consider that our strategies may have vastly different attention requirements, and that we may operate on very different timeframes. I may also just be faster at my job. I can tell you that the first two are certainly true.

And analyzing charts and watching PA is what I would consider "staring at the screen".
  • #20
  • May 10, 2010 9:52pm May 10, 2010 9:52pm
As for me, I know that I am a trader when I am able to produce consistent profit on my demo account for six months in a row. The most important of all is that I have a trading plan and I have the discipline to stick to it.

However this does not make me a full time trader yet. To become a full time trader, you need to make sure that you are able to make profit to more than cover your expenses.

The profit should not be just enough, it should be at least double your expenses. It is not wise for you to use up all your profit and not grow your trading account.
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