I read elsewhere a remark by Mark (OEXCHAOS) that significant amount of money is required to trade for a living. And that you have to manage money for others to make it all viable.

What is "significant amount" and what is "living"? If you have an extravagant lifestyle and have to indulge in conspicuous consumption, may be this is correct. However - I know several traders, who are able to trade for a living with a trading equity of $25k to $40K. Many of them make high 5 figures and a few make 6 figure annual incomes. (All of them trade emini futures).

It is certainly possible. I trade with about $20K in my account and trade 1 to 3 lots of eminis. I have graduated from a $10K account trading strictly 1 lots. I call myself a blue collar trader - everyday I go to work and at the end of the day, I have to punch the card and collect my wages. Most of the days I manage to do that. Some days, my employer spanks me and takes some money away. The equity stays the same because profits are removed on a weekly basis. Windfalls are removed the same day.

But ..bottom line is: it can be done. You don't have to be a rocket scientist or a Wall Street wizard. I do it everyday. I am an average Joe immigrant and came to this country with about $1000 in my pocket. Having said all that .... I could not succeed in trading for a living till I didn't have to trade for a living. If you are a small trader, it is difficult, if not impossible, to trade successfully, if the next meal has to come from trading profits. I found out first hand that scared money never wins. If losses become personal instead of just business expense, the mind games will nullify performance and the road to ruin is swift and inevitable.

This is where the difficulty arises. Unless one is born into a family of traders, the psychological stumbling blocks cost great deal of tuition money to overcome. One must have a stash of cash, alternate means of income or gainful profession before attempting to trade for a living.

Money Managers, of course, are very much needed. Not everyone can invest or trade the markets. But managing OPM requires skill sets which not all good traders possess. I consider myself a reasonably good trader, consistently profitable. But I cannot manage even my wife's IRA money. But managers who can trade for themselves and for others successfully are a rare breed .... kudos to Mark, Ike and others of that ilk.

I thought I would post this because many well-meaning professionals tried to dissuade me from embarking on this career. Had I listened, I wouldn't be having the fun I'm having as a trader, surviving foray into the markets day after day - but only if I wished to. Sorry for the long winded post...probably somewhat off-topic.

Geosing,

I wholeheartedly agree.

Good post. I agree with you. I believe you can trade successfully for a "living" with an amazingly small amount of money.

These days for instance, the E-Mini SP can be traded intraday for $2k per contract. Some places use intraday margin of $500. With $25K in your account, you can trade $100K of stock during the day. This type of leverage means that if you're a good trader you can pull significant amounts of money out of the market over time.

If you're a stock trader I don't think you can make with unless you meet the daytrades minimum equity which is $25K. More would be preferable. But I think an account of $50K would be ample for either stocks or futures IF you're a good trader.

Like you I believe success has alot to do with psychology. If you're afraid to lose, it's tough to trade. Being afraid to lose comes with being undercapitalized. I think a trader with low overhead, and an account of say $50K can make a living if he's good at trading.

IndexTrader

Geo, thanks for your excellent thoughts on this subject! I love reading your posts, and this one is a great example of just why that is...

My "problem" is a relatively expensive lifestyle - I spend way into 6 digits every year, so that I have to keep working (running my biz) for a living until my trading accounts gets to critical mass...that is they get to roughly 10-20 times my annual expenditures...so that I can be sure that I can generate the income I need, plus keep the accounts growing, without feeling stress to generate trading profits. So my critical mass is around 3-5 million. Getting there, but for now it's mortgages by day, stocks by night....

I once heard Jack Schwager wanted to write a book about your Average Joe trader who had been successfully trading for a living over a period of several years. The book never came to fruition because of a lack of *verifiable* applicants.

The CFTC enforcement files are full of traders who claimed they succesfully traded for a living while in fact they were net losers.

I couldn't disagree more with Index Trader, and especially on the small account. At one time years ago I offered a $500 bounty for anyone who could show they had been successful at daytrading stock index futures over a three year period - no takers. When I used to market a manual on daytrading the stock index futures, I spoke with literally thousands of daytraders. It's more myth and folklore that there's a bunch of traders out there succesfully daytrading the futures. Actually I did have one taker on my bounty. But of course, he could never come up with any documentation. Lot of big talkers out there who when push comes to shove never can produce any real money trading statements. He eventually drifted into selling an expensive daytrading course and advertised about how he successfully traded for a living. When the CFTC went to investigate, they discovered that in his real money trading account he had been a net loser for six straight years.

You don't want to get me going on the S&P daytrade course vendors.

Gary -

Since it's you, I'll hold some of my comments...except to say $500 wouldn't be worth my time to gather documentation...nor do I feel the need to prove anything to anyone. Also, I agree with most of what you said, so I'll deal with mostly that.

I especially agree there are probably FAR less those that do than those that say they do. There are a lot of big talkers...that is for sure!

With day trading the S&P, anyone who can do it on a consistent basis wouldn't waste their time trying to sell a program with all the marketing and the huge hassle such a business requires. Also, those would NEVER be the guys who the CFTC had any reason to consider...they aren't selling anything to the public.

But, I have to REALLY agree about daytrading vendors. Even (especially) the big name "traders" who write books inorder to sell their seminars are very suspect. (George Angel is one)

Great thread. As someone who aspires to do exactly that, I find the information useful. I don't know any traders personally who do it full-time and it is hard to get reliable info on this subject.

Geosing,

Great post ! Reminds me of my undercapitalized days and the nervous trading i was doing then. Scared money never wins - it consumes itself !

JB, Gary,
What do you think about Larry Williams..I have read some of his books, i test 3 of his systems and some of his moneymanagement rules..Some of the things in his books are really "gems" in my opinion..However why would one share these gems for the small price of a book?Be it 50 or 100 $?This is just 2 point in the ES )

I have some personal experience with a daytrading newsletter vendor, as I genuinely believed him to be a hot shot trader - he claimed to be one. I provided a lot of technical help in building web sites, programming backends and so forth. I discovered belatedly that what he was good at was marketing and desperately needed to sell subscriptions to support his lifestyle. I think most, if not all, of the course vendors fall in the same category.

On the other hand, since I started this trading business, I have come to know a few who are consistently profitable. I don't think they are making any special claims and I doubt anyone could persuade them to turn over their brokerage accounts. Me included.

I just focus on getting a few ticks off the bond market or 3 handles off S&P or 25 lousy Dow points. And will not recommend trading as a business unless they are financially independent already by some means or other. Or somebody with the tenacity of a Gary Smith or Jim Rogers.

If you go over to elitetrader.com and click around, you will find a number of threads about capital, trading for living, etc., etc.

JB and Geo, Sorry, sometimes I react before I think (comes in handy though as a trader) I agree with Geo about not listening to the naysayers (myself included)
Everyone should pursue their trading dreams, for better or worse. Heavens knows, if i made it, there's hope for just about anyone. And I agree with JB that there are successful small time traders out there, just not quite as many as one might suspect. In fact, I would love to profile such traders in an article for a trading publication.

One of my problems is I've heard too many tales of woes from so many traders over the years. It's made me a bit cynical about trading claims be it vendor or private trader. There's one well known futures vendor out there who has written books, given seminars, managed money, had a fax service, etc. where it was uncovered in an expose by Bruce Babcock that his "I trade for a living" spiel was a complete fabrication in order to pander his products.


I ought to dust off one of my post from years ago about Crooks, Con Men, and Charlatans, scary stuff.

Thanks Selecto for the site info.

Gary, etc. --

Don't stop warning people. Daytrading -- any trading -- for a living require a LOT of work and a special set of personal characteristics that must come together in the right way. That's one of the reason paper trading success means little (or nothing) when making the move to real money trading. A great book that new traders should read is "West of Wall Street"

As for Larry Williams (and others like George Angel) their books have SOME very good value...as an introduction to concepts to STUDY until they are your own (or you discard them)...period. When he turned $10,000 into $1,000,000 in a year -- what is not known widely (this was confirmed by him to me, personally) was that he was up to well over $2,000,000 and lost a million plus in a couple weeks (or less). He lived on the edge, in order to make a big name for himself and pulled it off.

Why would he not continue to just trade if it he could continue on forever? I'll let other's answer that...but some clues are in the book "West of Wall Street".

The $20-$50 books is one thing, but the high priced seminars/cources as a short cut to being a successful trader is NOT going to work!

geosing --

What success I have found daytrading came when I shifted to one who did it as a business, looking to make 1-10 points consistently and repetively....NEVER holding overnight. This approach is where I have met (nearly) all of people who are successful daytrading. My partner did this for about 11 years (he just retired).

Before daytrading the S&P, he was a CTA, managing his and other people money for a long time -- as high as $35-$40 million under management (beside his own)-- position trading the Eurodollar and the big bonds. When he got to the point where he went to trading the S&P, looking for 1-10 point trades, he closed down his business -- giving up the a lot of "incentive money" (CTA's usually take a % of profits, not managment fees) and went to trading just his own account and never looked back. The point is he was a very successful trader who did all the work BEFORE he started daytrading the S&P...and he found (with his skill set) that daytrading the S&P was far more profitable.

Those who live to just hit home runs by swinging for the fence are the ones who lose out. 2 steps forward and 3 bigger steps back. Some think the approach I take is like trying to make quarters daytrading individual stocks. It is nothing like it and many who do not really know futures do not get that point.

Do the math -- (net after slippage and commision) JUST 1 (big) S&P point a day ($250), times 5 days, times 50 weeks, times enter a number contracts.

I should clarify.

Make that averaging one S&P point a day...net.

Gary:

Frankly, I think you should take your blinders off.

Probably the best known SP trader I can think of right off hand was Marty Schwartz. He entered into any number of trading contests at one time where the results were documented. I guess you forgot him.

Then there was Frankie Joe, one of his competitors in the contests, who generally entered with an account along the size of $50K if I recollect.

Over the 4 month period of the contest Frankie Joe would typically make 100-200%+ if my memory serves....and he was being soundly beaten by Schwartz who at times was doing 400%+ on a $500K account.

Since you mention Schwager, Schwager mentions Schwartz entered 10-4 month contests, in which his AVERAGE return was 210% for 4 months (not annual) on an account of $400K (I thought it was $500K). In a one year contest Schwartz had an annualized return of 781%.

You might re-read Schwager's interview of Mark Weinstein, who at that time claimed to never have had a losing week since 1980. That particular book was written in 1989. Most of Weinsteins trades last hours or minutes according to the interview.

None of the above traders offer advice for sale. Schwartz has written a book.

Schwager also interviews Linda Radske (sp?), who does sell advice, seminars, etc. He seems to be comfortable with her record.

Maybe the problem Gary is that you have been looking in the wrong places. Some of these examples above are highly publicized. Hard to say why you are so dubious that anyone can make any dough trading futures.....unless it's because they are unwilling to show you their statements. Personally, I can't imagine why anyone would be interested in doing that at all.....but that's just me.

IndexTrader

I find it helpful, personally, to keep in mind that most people who trade, do it badly and lose.

I've read the same books and they are somewhat inspirational. But I try to never associate myself with those who "have made it". It has been helpful for me not to trust me. And to learn how to treat myself and my emotions as the enemy. To question what I do, why i do it, so forth. I know that for me, an inflated trading ego will most likely lead to disaster not wealth.

As an amateur who does not trade for a living and most likely cannot yet trade for a living...I've little else to contribute here.

One thought. How many in those books, since they have been written have 'blown up' as traders?

Now I'd love to know that.

Couldn't tell you. Obviously, if a trader has been successful for 10-20 years, he could still theoretically "blow up". Witness Neiderhoffer. Of the people I mentioned, Schwartz is still trading as far as I know, Frankie Joe died a number of years ago, Linda R. is still active and sells services. Don't know about Mark Weinstein.

The fact that they "could" blow up does not diminish their success in my eyes.

IndexTrader

I asked the question for a reason. I've been working my way through "Fooled by Randomness".

One thing you read in that book is that some traders with good long records must indeed not be good traders at all. But rather, purely based on probablity there MUST be traders out there who will develpe good records but eventually blow up.

So it occured to me that in the two Wizards on Wall Street books there might be a trader or two in there who "blew up" because their good trading was due more to randomness than to skill.

The fact that someone has a good long run making money trading DOES NOT PROVE SKILL. Which is why I think it behoves all of us to always take care. NOt to freeze on the trigger like a deer caught in the head light but to take care.

Such as, using stops, risk management, diversification, whatever.

Index Trader, we are talking about Average Joe traders here, not market wizards such as Schwartz who at one time or another held a seat on the exchange.

As usual you know not of what you are talking about. Frankie Joe had a real simple technique, he sold rallies and bought dips. Then along came the greatest bull of all time and there were no dips to cover on the rallies he sold. According to his friend Larry Williams, he became so frustrated with losses he apparently committed suicide. It's all in one of Larry's books.

As for the trading contests, had you ever spoken with Norm Zadeh the sponsor, he would inform you that in the futures division, 99% were net losers overall. In any one year, it was something like 90% as reported by the WSJ. And these weren't average Joes, but newsletter writers, brokers, and other assorted gurus.

First Gary, you're the guy who brought up the term "Average Joe trader". Originally we were discussing how large an account size might be possible to make a living trading. At that point you jumped in with your stories about con men, CFTC, course sellers, newsletter writers, etc etc. Helpful information, but not pertinent to the topic at hand.

I don't know how many traders trade for a living, whether they fit whatever your particular definition of "average Joe trader" is or not. And more to the point...neither do you. Because no one took up your offer to show you their account statements, you ASSUME there are none. Hardly up to even your own standard of proof.

I simply provided some names of people who have records that have been publicized. One would hardly expect your "average Joe trader" to have a public record now would they? So it seems we are in a quandry here, caught between your need to see a public record, and whether a public record would ever be possessed by some you call "average Joe trader".

If you will reread my post, you will find that I did not attempt to make any assumptions about the results of the traders as a whole. I made comments about a few traders specifically. I am unaware of the suicide you claim re: Frankie Joe, or the alleged cause of it, nor whether Larry Williams is an unimpeachable source for this information (there are those who would argue this point alone). I believe I recollect reading in Barrons about the death, and what I recall is that it was due to a heart attack. Perhaps Barrons didn't know the information what you are in possession of, or perhaps my memory is faulty, or perhaps you are in receipt of bogus information. We can all run into markets that don't fit our particular style. And if your information is factual then it may be that it happened with Frankie Joe. I might add, it could happen to those who are momentum buyers like yourself.

The point remains that there are those who trade for a living. I gave a few examples. JB mentioned a few.

IndexTrader

Sentient wrote:

The fact that someone has a good long run making money trading DOES NOT PROVE SKILL. Which is why I think it behoves all of us to always take care. NOt to freeze on the trigger like a deer caught in the head light but to take care.

Such as, using stops, risk management, diversification, whatever.

I like those words you wrote implying keeping humility in your perspective. Big lottery winners can make a living on a one time win, but what does that say about their skill about picking numbers? Also don't some professional gamblers that make a living at their craft? Until they don't, or they HAPPEN to stop at the right time.

---Out

Money management is the absolute key to not blowing out ones trading account and it is the least discussed issue (past references to stops) on this or any other trading/investment board.

One of the folks in Schwager's first book Market Wizards -- the only non-trader -- was Dr. Van Tharp. His field is trader psychology and trader development -- he calls himself a "traders performance coach" or something similar. He does some extensive (ongoing) research focused on just money and risk management techniques. I think it is worth looking at his work in particular -- his books on system and risk managment are sold at Amazon and his specific studies on JUST money/risk management at his own web site.

http://www.iitm.com/products/books/rptmm.htm

Money/risk management is the least sexy, and the most boring, thing to talk about -- but without it, any risk venture is gambling in the worst sense of the word. With Money Management -- and other risk management -- techniques, even craps/poker/blackjack players can make a living...if they have the disipline to "play" as though they are in a business.

I have traded in the OEX options pit and the SP futures pit and know alot of good traders who have been able to make money in the indexes while trading from the FLOOR --- I have always believed that trading indexes off the floor to be the hardest trade of them all. I am sure that some people can do it successfully but I find it alot easier to profitably trade individual stocks. The one ingredient needed to be successful over the long haul is HARD WORK and constantly thinking of new ways to beat the market ---- if you do not get BETTER as a trader every year then the game will pass you by. I enjoy reading all the thoughts of everyone on this board and find it to be by far the best forum on TECHNICAL trading advice on the web. I find it very interesting that IYB is probing for a short trade and fading the trend. Good luck to all.

Let me tell you two stories of people who day traded - one I personally knew and one who I read about in the news.
The first is a person who grew up poor but his father worked hard and amassed a good amount of money that he left for his son and family. So this person let's call him Bill, had a wife who was given about $1m by his father, the two children had a college fund and Bill had a couple of million from his father and more money from being a arbitrage broker. Bill retired at 40 and dabbled in small businesses investing. Bill got involved in day trading and had a mentor to teach him.
You gussed it. Bill lost all his money, the wife's money, and the childrens college funds.

The wife now house sits homes that are for sale and is back at work. The children are getting financial aid. Bill began taking drugs and drinking too much, he is now in prision - not related to day trading.
This is a true story.
The other story was in the news about a person who worked all his life - amassed $100,000 and began day tading at one of those firms specializing in day trading.
He lost it all and went back and started shooting. I think he killed at least 2 people.

Talking about the stars of day trading and thinking that the masses of average people can do it is like pointing to the NBA stars and telling an average getto kid he can be an NBA star.

JB,

Thanks for the info. I once sat down and tried to find a book on money management for traders and could find none.

I thin took all my trading books and stacked them on a table, dug throught them to see what I could learn on the subject. The material was in there, here and there...but limited. I'll check this guys stuff out.

DEX,

I can't say anything to take away from what you have put forward. But I do have a thought.

Making a living playing basketball is very difficult. There are very few positions open. Hundreds of millions of people in this country and how many positions that pay a living wage to play basket ball? 1000 maybe? You have to be the best of the best to even play pro for a few years. Or at least appear to be the best of the best.

Now, how many people can make a living wage trading the marekts? I suspect that more could make a living trading the market because the money is there for them to 'take'. But, do more people make a living trading their own money than make a living playing basketball? I honestly don't know.

My goal at this time is a bit lower. I simply want to outperform the market. I have no set percentage. I simply want to trade wisely and outperform a buy and hold approach.

How much room is there in the market to allow people to do better than buy and hold.

I guess what I'm getting at is....I don't believe that a capable trader need be better than the best of the best. He need not run down the floor and try to take the ball away from Michael Jordan. All he has to do is take the ball away from some overly emotional trader who has no clue as to what he is doing? But of course, there are a lot of people reaching for that ball so a certain level of skill must be obtained?

I would liken day trading, or for that matter, any trading, to a spectrum. At one end of the spectrum are stories of the type you just told. At the other end of the spectrum are the super stars of trading. In between are wide ranges of different sets of circumstances. I doubt that we could point at EITHER end and claim that that is the common experience. Further, I would say that the spectrum is skewed toward the failure side....meaning most people probably fall somewhere along the spectrum where they either lose money, or they make so little it is not worth the time investment that they are making.

No one said that the "masses" could trade. In fact, we know they can't. We also know that the small majority in society make most of the money at literally anything. So there's nothing new here at all. The point is that it is possible to trade for a living given sufficient knowledge and skills. The majority will never put in the effort required for that type of success.

IndexTrader

IndexTrader & Sentient Being,
Thanks for the replies.
First I like to say this is the only board I read for three reasons. First, is that reading too many boards can influence my view of the markets, two the majority of people treat eachother with respect and people provide good insights to the markets.

Your points on day trading are well taken.

The intent of my simile about the NBA & getto kid is that we tend to identify with the winner - even against outragous odds rather than the looser. And that we need to have reasonable expectations of what can be accomplished (your points)

In Elders' "Trading for a Living" that he mentioned on page 35:
"Brokerage recods indicate that 90 out of 100 people trading today will probably be gone from the markets a year from now."

Another good quote is on page 37 Elder says that every morning before he trades he says "Good morning, my name is Alex, and I am a loser. I have it in me to do serious financial damage to my account."

JB--

"What success I have found daytrading came when I shifted to one who did it as a business, looking to make 1-10 points consistently and repetively"

You hit the nail on the head with that statement. It took me a very long time to come to that same conclusion. And, even longer to find a way to do it. If a trader waits for a month for a profitable trade to come to fruitation he/she is missing the boat, unless it's a hell of a payday. If that trade turns out to be a loser, or breakeven, there goes a whole month with no income! Profits must be made & brought home on a regular basis. The shorter the time horizon the better. Lately, I've been trading with options catching one to three day moves, as well as riding trends such as the current SnP. This has given me much better success rates then when I used options to try catch the big moves (home runs). I like the comfort and low stress of trading options but it's rather tricky to say the least. Anyway, thanks for sharing. Your recent posts show me that you definitely know what you are doing and helps confirm certain thoughts & ideas I have. I appreciate the input. If you ever want to share what you are doing in your emini daytrades I'm all ears! I used to daytrade the emini daily but never did find a system or the right indicators to do it successfully. I'm new to this board and am way out of my league here as far as T/A goes, but hope to learn as much as possible to add to my trading arsenal. I have traded daily for 10 years now, and even though I don't have the capacity or ability to do much of the analysis available (yet)..... I hope over time I can offer everyone a different perspective from my own personal experience that is of some value.

Well Hawk if one makes 1-10 points a day EVERY day that person is going to take over the world..
I do not think that money can be made EVERY day..I have tried several ideas to bring cash home every day-it simply does not work..You have to be selective in your trades..And as Larry Williams says/i am a big fan of his,although i would not try to have the same performance as his in 1987 / waiting for the right setup is the commodity that most commodity traders do not possess
As for money management- i think there are some books from Ralph Vince.
http://www.amazon.com/exec/obidos/search-h...9051774-4815300

As for Frankie Joe, according to Larry William's Book "Day Trading Futures Online" he was buying dips and selling/short/ rallies..And yes,the big upmove in 1982-1983 made him desperate because there were no dips for him to cover at and go long..

Someone mentioned a guy named Jim Rogers.The only books i find on amazon from him seem to be telling about his trips,or maybe just the title suggests that,any comments?

I just read "DayTrade Futures Online" from Larry, and there are some interesting things there..And a moneymanagement system which is ..good .

As for the robbins cup,here is the link to the performance of the traders
http://robbinstrading.com/worldcup/futures...s/standings.asp

Note that for the stock trading division the winner in 2001 had a gain of just 3 percent for the year ))..

Sagitarius d, thanks for the Robbins link. The real shocker was the 2003 stock division results. You could have thrown darts and made 30% in stocks last year.
The average diversified mutual fund did over 30%, small caps returned 45%. Yet, only one trader made over 30% in the Robbins contest.

I clarified that it takes AVERAGING 1 S&P point a day -- even 1/2 point average is well worth the effort. The idea is when I take a trade is to go for a high probability gain of 1-10 points depending on the set up. The goal is to AVERAGE 1/2 to 1 point a day.

When you have a 7-15 point range in a trading day, these targets are extremely rational. People who have NOT spent many years living with the S&P futures -- tick by tick -- day in and day out -- just don't get what can and cannot be done.

But OH BOY, how so many will sound off nonetheless...even talking about people losing their entire net worth -- a $million -- daytrading individual stocks (the biggest sucker game there ever was) -- changing the subject -- in a thread dominated with posts about futures. Also, I work with NO more than 5% of my net worth in my trading account (right now, it's about 3%, it's been a pretty good year)

I have 3 time periods a day, where if the SET UP is right, I take the trades. IOW, I am EXTREMELY selective. Some days 3 trades are taken, many days none. On average, that works out to about to 1 to 1 1/2 trades on average for each day where I am READY to trade. I have had weeks where I I was ready to trade but only took a total of 2-3 trades and others when it was 1-2 trades almost every day.

It's also noteworthy to point out: because one has not be able to find a way, does not mean someone else can't.

Also, to clarify something Hawk mentioned -- I am talking about the full size contract (I don't trade the e-mini)

JB:

Well said.

I have found that critics of a technique are simply telling you that THEY can't do it, or don't want to do it. Rarely does it mean it can't be done.

It's interesting to analyze a move in the SP from bottom to top....figuring out the number of days it took to complete, and the maximum number of points from the low to the high of that swing. What you find out is that the average seems to be something like 2-3 points per day.

Yet, if you look at the intraday swings of the SP you will find that most of the time they are at least twice the range, or more. There is definitely enough activity that it's POSSIBLE to average a point or so per day. And because there is no overnight risk, risk threshhold is significantly lowered in that respect.

When I say possible, I don't mean everyone can do it, that everyone has the skills to do. Just that it is possible, and that some are doing it.

Thanks for your comments.

IndexTrader

Interesting that you put the year at 1982-83. I was an active trader by that time. The start of the bull market caught nearly everyone by surprise. So it's no particular surprise that Frankie Joe may have been short, or may have tried shorting it as it rose. Lots of people did.

I can tell you though that Frankie Joe did not commit suicide in either 1982 or 1983. In fact, he was in the trading contests with great returns in 1984. As a matter of fact, I even start to question this thing about "selling rallies, buying dips". Barron's did an interview with him at one point where he talked about a few trades...sugar being one of them...a classic breakout type of trade.

In fact, at one point I was a member of an exchange, and recall an order that I was told was Frankie Joe's....a 100 lot of the big futures contract. This would have been somewhere in the mid-80's by my recollection.

What year did Williams claim he committed suicide?

Either way, Frankie Joe was generally acknowledged to be an outstanding trader by most on Wall Street. Most traders have had periods where the market was less conducive to their style than others. The point is that he was making a living.

IndexTrader

PS Jim Rogers has no books about investing. He's been interviewed any number of times over the years. So if you want to read about his techniques you'll have to read them there. These days he's on a Fox program on the stock market on Saturdays in my area. Ex-partner of Soros.

"When you have a 7-15 point range in a trading day, these targets are extremely rational. People who have NOT spent many years living with the S&P futures -- tick by tick -- day in and day out -- just don't get what can and cannot be done."

JB=
I enjoy your posts, thanks.

I have watched every tick on the SnP for many years myself and know exactly what you mean.

The same can be said for the commercials. I think it's all about how one interprets the info. They are by far my best indicator. I don't want to trade against them, I want to trade with them at my back.

The commercials can't signal when to enter & exit a daytrade, but if you study how they react to price movement over time in any given market, you can really get to know them and what the price will likely do in the future.

For example, if you know they just spent the last two weeks buying into rising prices on the SnP, then you know you can BUY intraday dips nearly every day with high odds you will close the trade a winner that day....as opposed to shorting for those profits, which would be difficult to say the least in an environment the commercials suggest for next week.

Of course, there are times when commercials are dead wrong. However, this is a game of odds and high percentages, and the commercials are usually right when they are interpreted correctly. Keywords...interpreted correctly. Takes many years of watching them just like it takes many years watching the SnP.

JB,
We are obviously talking about different things.I talk about 1 point everyday,you talk about average one point a day
I also have found one"time based" setups that have high accuracy the problem is that they are very rare/intraday/-an average of once a month..And yet the profit is about 1-2 points..
As for
"It's also noteworthy to point out: because one has not be able to find a way, does not mean someone else can't." I fully agree with you.But again we are talking about different things.I am talking about 1-10 points a day ,every day, and you are saying AN AVERAGE 1-10 points a day .
And as IndexTrader pointed,i am admitting that i CANNOT MAKE 1-10 POINTS A DAY EVERY DAY!But if you guys claim this,you should be multi-millionaires,and maybe could show real statements?

And i say the movement from 1982-1983 because in 1982 the markets hit a bottom and the upmove continued until 1983,in 1984 the markets were generally flat..

As for the setup i mentioned above- it is so rare,that even if it was 100 % right/whic it is not/ one could lose money on emotional trades if the trader is not disciplined.

As for Frankie Joe, i hope we talk about the same person.Larry Williams says that Frankie Comitted suicide in 1983..He was a trader from 1960-1983..And before that he was into sports..Baseball or something like that..
http://www.amazon.com/gp/reader/0471383392...rankie%20joe%22

As for the watching of intraday prices- watching is one thing but making a profitable trade every day is quite another..

Have a Good Evening!

Just to keep this clear -- what I said was --

QUOTE:
The idea is when I take a trade is to go for a high probability gain of 1-10 points depending on the set up. The goal is to AVERAGE 1/2 to 1 point a day. NOT an average of 1-10 points a day.

IOW -- when a trade is taken, the target for THE TRADE can be as little as 1 point and as much as 10 depending on the set up...That TARGET is mostly based on a running "average daily range".

The over all goal is to average 1/2 to 1 point a day -- net.

That's 125-250 S&P points a year...something Mark's published (trade by trade) track record for his S&P system far exceeds...at least the last time I saw it.

I don't think Hawk was claiming he was making 1-10 points everyday.

I know I wasn't -- especially since I clearly said there are many days no set up presents itself. In short, this misunderstanding took on a life of it's own -- but -- since I used the figure of 1-10 points, I took the disagreement to be aimed at what I said and the wrong assumptions I saw attached to those figures.

Ok,ok..

So you found setups like the one i found-they are rare and you are selective,and make 1-10 points but not every day,only on days where the setup's entry is executed,right?

Index --
Well said right back to you!!

The last 12 months has seen produced a shrinking intraday range, during the last part of 1999 and through most of 2000, the range ran much higher -- 20-25 point days we not unusual at all -- often with a net for the day of near zero.

When I started looking at the daily range many years ago, I found that INTRADAY, the sum of the daily ranges for the previous year FAR exceeded the whole value of the index 3-4 times a year (or far more). In other words -- if the S&P was at 500 (way back), the sum of the daily ranges over the previous year was 1500 points PLUS.

I then started the process of looking how to trade the S&P with the question: "where are the BIGGEST point movements" available to trade -- intraday
OR
postion trading?

Also "where was the biggest risk: being in the market 5 to 30 minutes at a time...shuting down and out of the market at the end every day...
OR
...holding a position 24 hours a day when I can only control the trade for 6 3/4 hours of that 24 hours.

I think you know my answers.

Best --
JB

instead of daytrading,think of ACG/50k and collect dividend.

OR

50K daytrading margin = 4 contracts full size S&P (with extra left over)

if average 1/2 point (net) a day
X
for 250 days
X
at $250 per full S&P point
X
with 4 contracts...........

equals $125,000 in a year.

(assumes no increase in number of contracts traded with any account increases)

This is definitely THE Frankie Joe. But unfortunately, it seems Williams may have his facts wrong. I'm looking at another book right now in which the author (Victor Sperandeo) claims to have lost a trading contest to Frankie Joe in or about May of 1984. So evidently at least at this time Frankie Joe was alive, well, and trading well enough to win contests.

Put it this way....one of these two gentlemen, Sperandeo or Williams has their facts wrong. My bet is Williams does....since I can remember seeing Frankie Joe in contest in 1984....and I believe it was 1985 when a 100 lot trade on the floor was attributed to Frankie Joe.

I search a little this evening for someplace who would have the records of those old trading contests....couldn't find them. They were all published in Barron's, but I don't believe Barron's has things on the internet prior to 1996 or so. I'm going to keep looking.

IndexTrader

Out of "Pit Bull", written by Marty Schwartz, Page 119, Schwartz quotes the Wall Street Journal on June 7, 1984 by saying: "Mr. Joe, a 42 year old professional trader, says he may not compete (in the next trading contest). 'I have the insides of an 86-year-old', he says." Schwartz goes on to say "Frankie Joe didn't enter that contest and died shortly thereafter of a heart attack."

So what we know now is that Frankie Joe was trading well and being quoted in the Wall Street Journal in mid-1984. This contradicts the Williams claim that Frankie Joe had ended his career in 1983. Further Schwartz says he died of a heart attack....obviously much different than the Williams claim of suicide. Worse.....it does not sound like even if there was a suicide it would have been due to poor trading since he was winning trading contests just prior to his death. Suicide could obviously be for many reasons....not just trading.

Gary Smith made this remark to me: "As usual you know not of what you are talking about." It sounds to me like Mr. Smith has been relying on third party "facts" which are at least inaccurate, and may be entirely wrong. So far I have found two different sources which seem to corroborate my original statements, and contradict Gary Smith and Larry Williams.

Either way, I find it unfortunate that Gary Smith chose to take a shot at me by relying on third party information which may not be accurate. Doesn't say much for Mr. Smith.

IndexTrader

Larry Williams and Frankie Joe were friends. Why not just go to the source. I'll speak with Larry this week and ask him about his statement on Frankie Joe that

"Eventually, he became so frustrated with losses and the lack of success (like all great traders, he was also compulsive about winning), that he apparently committed suicide."

Sorry nor participating in this interesting thread which I started. On hindsight and suffering rare moments of lucid thinking, I recognize the error in judgement.

"The best time for you to hold your tongue is the time you feel you must say something or bust." - Josh Billings

You might like to ask him about this quote from the same page in his book: "One of the truly great traders from 1960 to 1983..." in light of the fact that Mr. Joe was actively trading in 1984, winning trading contests, appearing on the front page of the New York Times, and being quoted in the Wall Street Journal in June of 1984.

From the above I would at least say that Mr. Williams has been inaccurate with the facts. How accurate has he been with the rest of it? According to page 98 of Mr. Williams book he had a "3-year friendship" and it was on this basis that he claims Mr. Joe divulged his trading technique that was supposedly his undoing. Yet, Mr. Williams is evidently unaware that Joe was winning trading contests AFTER the period of years that Mr. Williams cites.

Is Mr. Williams the source? In my opinion no. Mr. Williams is a third-party, with what he claims is a 3 year friendship, none of which can we verify. The source would be newspaper articles, death certificates, etc etc. Frankly, if Mr. Williams is questioned I would guess that he won't be changing the story....what would you guess?

By the way, you might want to call Mr. Sperandeo....he manages money in Texas, and was a friend and business associate of Mr. Joes from early in his career...much longer than Mr. Williams. Mr. Sperandeo only says that Mr. Joe "passed away". By the way, he refers to Mr. Joe as a "pro's pro" in terms of his trading prowess.

IndexTrader

IndexTrader,
I found the WSJ article from 7th June 1984, named "Eleventh-Hour Killing Is Margin Of Victory in Commodities Match"
By Allanna Sullivan. Wall Street Journal. (Eastern edition). New York, N.Y.: Jun 7, 1984. pg. 1

I cannot reproduce it ,since i am not aware of the copywrite laws in the US and do not want to be sued by it.
But i think IndexTRader was right and Larry Willimas Was wrong..
I do not know when Frankie Joe died, but in june 1984,at the age of 86 he was still alive ,and in 1983 Frankie Joe even won theUS Trading Champion ship accroding to WSJ,but in 1984 was defeated by MArtin Schwartz ,but still was the second in the futures division..

Yes, I recall that article about how they battled right down to the wire in that year's contest. And even I thought Mr. Joe was still winning big in the early to mid 80s. Perhaps Larry just got his dates mixed up. Either way, will be interesting to hear his take on the matter and his sources re. Mr. Joe's death and apparent trading collaspe. I realize some aren't real fond of Larry but I have always found him to be a real upfront guy.

Sag:

Can I ask how you found this? I subscribe to the online version of WSJ and Barrons, and was of the impression they did not have anything earlier than 1996. Can you guide me toward the article?

Thanks

IndexTrader