I remember reading "Trading for a Living" by
Alexander Elder back in 2005 when I was just starting to dabble in trading
systems. I can't remember if it was in
that book or in some article I read or in some conversation with a trading
mentor but the prevailing idea has always been that 95% of people that attempt to
trade (usually middle aged guys [and it's almost always guys isn't it], say
40-55, with a technical or professional background in engineering or software or law or
medicine who think that success in one field logically and necessarily translates to the
next…maybe a little like Michael Jordan trying to play baseball, for example. I fit this profile, too, btw.) fail when starting to trade and they usually
fail three times -- the first time with their own bankroll, the second time with
someone else's money and the third time with the last few desperate pennies
extracted from the tightly closed fists of friends and family. The idea out there was also that there was some kind of
multi- year process where it took something like 2 years (maybe more) to lose money, then 2 years (maybe more)
to break even, then 2 years (maybe more) to make a modest profit, and thereafter it is supposed to work out OK. Keep in mind I am talking here about retail traders that are doing it solo without the institutional support and
systems and mentorship that can make corporate 20-somethings wildly successful
and rich. I was also advised once that
since people can't expect to become a successful engineer or a cardiologist or an attorney
without sinking some serious time (years) and effort and money (100s of
thousands in those examples) into education, apprenticeship, and career development, they can't then expect to just step right up to a computer and shake a stick at a few moving
averages and make a mint. I, of course,
believed none of it. I thought that, like
an alchemist looking at a chunk of lead, I could unlock riches just doing a
little magic here and there.
