Monday, 19 July 2010

Is Trading Getting Harder?

The answer, as far as I am concerned is; It doesn't have to.

On Friday Alex sent me a link to a letter from Steven Schonfeld telling the Schonfeld clients that if the firm didn't believe that they were profitable enough or going to be profitable enough then he would pull the plug as it was in the best interests of proven unprofitable traders to do something else for a living. Schonfeld is a firm that has a long and honorable history of clearing locals and backing traders.  This is an understandable business decision. The part of the letter said in part: " But unfortunately, our vision of the future of trading has changed. It is getting much tougher for traders to make a living or get by."

I hesitate to disagree with a person with the experience and knowledge of the writer but I just have to give my opinion since I was asked.

Trading has always been tough. Ninety plus percent of all traders have been said to blow out within six months ever since I started trading many, many years ago. To me, nothing has changed. For Steve Schonfeld, the fact that his clients are trading electronically instead of on the floor seems to have made a significant difference in their success rate.

Lots of guys from the floor have not been able to make the transition to trading from upstairs. Whether this is because their edge on the floor was not a trading edge or whether it is because they can't read the order flow from upstairs, I don't know.

What I do know is:
  1. Trading is still the best profession in the world for many people
  2. Most people can be taught to trade electronically using a methodology like mine if the student is prepared to do a lot of work and carry out a structured and disciplined training program like the one I am currently delivering and they trade withing the amount of capital they have available, maintaining the proper attitude about losses that I have spoken about ad nauseum in this blog.

So, for me, its not tougher, its just a bit different. What is needed is a tested method of training people. One cynical and anonymous poster does not believe that the so-called EL method, or probably any other method,works.  I guess that is because of his own failure as we all judge others from our own experiences.

But facts are facts. People do succeed. Only 10% of them is the common assumption. I don't know whether it is really possible to change those statistics but I do know that it can be changed one trader at a time. Trading can be taught. Trading can be learned. You just have to do it right.

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