Episode 73: Has It Become Impossible to Make Money From Trading Nowadays?

by robbooker on August 20, 2012

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During this silly, soul-searching, self-assessing show, your intrepid host, Rob Booker, talks to Dan Polinsky, a trader and humorist who lives in Southern California, about the pervasive phenomenon of money loss in the headlines and all around, except for a few successful companies.

Rob asks Dan if it’s even realistic for a trader to expect to make money in this economic climate. And revisiting a popular question that has been discussed on this podcast before (and surely will again), Rob asks Dan how long a trader should expect it to take before he or she can start making money. Please join us, and leave us your thoughts in the comments below.

{ 4 comments… read them below or add one }

oskar August 21, 2012 at 3:16 pm

I really do enjoy listening to this podcast and I don’t want to be to harsh on it. But this episode didn’t deliver (for me that is).

I expected some kind of an analysis how the market(s) have changed to the worse during the last years, making trading harder than it was before. I think that’s what the episodes description somehow implied. What I got was basically “Our economy is effed up, it seems nobody is making any money. But if you stick to your trading plan and practice discipline it’ll be alright!”.
Well, with the possibility of short sellings, is there any correlation between a bad economy and hard(er) trading at all?

Then, at one place Dan even suggests to look at only one (1) timeframe. Oh well, ok, he’s a humorist, too. Good mentors (imho) don’t let anyone get away with such a bad advice. KIDS, NO, DON’T DO THIS AT HOME!

I guess this episode wanted to motivate newbies with the message that it IS indeed possible to make (bigish) money trading. Somehow, with what has been said (like Jasons comment on this) and what has NOT been said it felt more like “Boys and girls, it’s friggin hard to make any money at all with trading…”.

Anyway, thanks for this podcast, hi Jason, please keep it going guys. 🙂

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robbooker August 26, 2012 at 7:31 pm

Oskar,

It is frigging hard to make money trading. Most people do not make money trading. It is just as hard as starting your own law firm, your own dry cleaning business, or any other type of business from scratch. It is really hard. It is SUPER HARD. It is the worst kind of hard there is. It is so difficult that most people quit, but they only quit after losing shit-tons of money.

Did you want to hear something different? There are lots of other podcast episodes that talk about it being possible. It is implicit in the entire discussion here that it is possible. But I am not hear to blow sunshine and rainbows up your butt. This episode was not intended to gratify your fantasy that if it were possible for one other person, it would be possible for you. That is wrong thinking. In order to succeed you have to forget that it was ever possible, or impossible, for any other person on the planet. A fascination with the success of others is a great way to engage in fantasy. But you’re here for reality.

When you say that “you expected” something certain from the podcast, and you wanted to know whether with the possibility of short sellings, and a correlation of a bad economy and harder trading – I have to admit: I didn’t understand the question at all. Please rephrase it.

You did say that the idea that “if you stick to your trading plan, it will be all right” was an unsatisfying answer.

And there, Oskar, is why most people fail at trading. The simple stuff is true. Most people gloss over the simple stuff and most people are shit traders.

Rob

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Brian Fortin November 17, 2012 at 9:21 am

I can’t agree with Oskar, and by the way, this was my favorite episode. We’ve all been there, experienced the soul searching and self doubt, and wondered if we’ll ever fulfill our dreams. I think it is incredibly beneficial to to hear other accomplished traders share this experience. I have been banging my head against this light bulb for years and years and years, and yet, I am constantly coming up with new ideas and new ways of thinking about trading and I thank God I wasn’t more aggressive in the early years.

Except for farming, more people have failed at trading than any other profession, and that’s only because trading hasn’t been popularized for that many years. It has the highest failure rate of any profession. There are a lot of podcasts and books to tell you how to get it done, but most of them just parrot back things they heard other traders say. There are not a lot of podcasts out there that lay it out and say, hey, it’s possible but it’s not probable unless you make it so. That’s what this podcast did and that’s why I like it.

My advice for new and not so new traders:

The 10,000 rule is an oft discussed phenomenon which states that to get to a high level of expertise in any endeavor, you have to spend 10,000 hours of directed practice, practice that is reviewed and coached, and that is repeated over and over again, and that is not fun. Malcom Gladwell, who wrote Outliers, says if it were fun everybody would do it. How long is 10k hours? That’s 10 hours a week for two decades. Unfortunately, that’s the entry price to become an expert at anything, so how long do you suppose it takes to become an expert in the single most difficult endeavor in human history, something which the primate brain is ill suited for and is counter intuitive and highly dependent upon context? Maybe it’s 20k hours. Heck, for most of us it will be forever before we get there. My advice is to take the amount of time from when you started to trade until when you began to think you knew what you were doing, and double it, or even better, triple it. THEN, you will be ready to trade. If that advice is too dark and pessimistic, then you’re not ready to take this journey.

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Brian Fortin November 17, 2012 at 9:35 am

The other perplexing criticism in Oskar’s post regard’s Dan’s advice to stick to one time frame. Dan is correct. I’ve got some news for Oskar, the markets reward specialists, not generalists. The internet is flooded with bullsh*t artists who present themselves as experts on trading. I don’t want to be an expert on trading, I want to be an expert trader. Experts on trading sell systems, newsletters, and advice because they can’t trade. Experts on trading will never say “I don’t know” because, deep down, they are insecure because they know they can’t make money trading. As soon as a trader specializes and becomes comfortable with being willfully ignorant about some parts of a profession that is so vast that no human being can possibly know it all, then and only then can he make progress towards becoming an expert trader. Until then, the most he can become is an “expert” on trading.

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