I am not the best trader in the world but I am up around 100k on the year trading, which is peanuts in the scheme of things. I continue to make tons of mistakes and learn from learn from them and then relearn from them when I make them again. I have traded for about 7 years while playing quite of bit poker during that time as well.

For me personally, reading books with quantified short term systems with clearly defined entry and exit rules are what at least has enabled me to be consistently profitable. I tried a lot different methods that weren't quantified that may or my not have validity but I couldn't make work. I needed something more systematic to fall back on.

Books that helped me in understanding the nature of markets.

Short Term Strategies that Work
Trade like a Hedge Fund
Day Trading With Short Term Price Patterns and Opening Range Breakout

I feel you can integrate ideas from those three books and trade systematically over the short term and learn to make money. I think all the newer Larry Connors books are pretty helpful because they are data driven. I really liked both of Victor Niederhoffer's books as well, though those are not essential. I thought Blair Hull, Jeff Yass, and Monroe Trout's interviews in New Market Wizards are worth reading for a short term trader.

thanks for listing these. i will read. do you recommend these to complete beginners? or should i start with something easier to begin with?

I have some questions, if you don't mind me asking:

What % return is that?

Are you trading for a firm?

How does that compare to prior years?

How often do you make a trade?

What instruments do you trade?

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1. I don't think in terms of percentage return, only dollar amount. Execution is a big constraining factor. I have a longer time horizon than most traders and still struggle being able to transact as many shares as I would like at a good price. I definitely think it is possible to make 7 figures trading, but I don't think you can easily scale trading up to the point where percentage returns should be a consideration.

2. No. I trade my own account. That might not be a good way to learn to trade. I have just read books and blogs. I didn't really want to dive in and only trade and that seems like what a prop firm would require. I would also have to move. I can't see much benefit trading remotely for a prop firm. I didn't even consider something beyond a prop firm. I wouldn't have the resume to get hired.

3. Much better. I have never had a losing year. But I have constantly tinkered and I have gone through periods where I didn't make money and lost interest and focused more on poker. I have had a couple of years where homeless people picking pop cans probably made more than I did trading. My previous best was 42k. I was mostly buying and shorting pump and dumps in the best year. Those don't really exist to the extent they did in 2010-11 and finding shares to short was always an issue. Shorting pumps had run its course so I tried other methods like scalping the SPY. I didn't make much for two years where I tried to trade price action in the market as well as bigger stocks like Apple. Somebody might be able to do that but I spent thousands of hours on it and couldn't make it work relative to the time I was putting in. I think trading forex and futures or SPY is a very poor road to try to trade.

I have played a significant amount (500k+hands a year) of poker during this time too, so that stunted my development. I have found it is hard to do both well at the same time. But I was making more playing low stakes poker than trading with less effort, so it was hard to jump in full bore with trading.

4. Every day. I don't scalp and hold overnight about half of my positions. I open anywhere from 0 to 5 new positions everyday and then trade around those positions.

5. Stocks only.

One thing that is incredibly annoying to me is how cryptic people are about their trading. Trading books tend to be very general and I can never tell if the author makes money. I have had trouble implementing ideas that weren't backed by statistical research. I wish more people would talk about what they make (or lose.) It would be helpful for people to know what is possible and what to expect. I have found trading to be very difficult.

How can you not think in % terms? Surely whatever you make from trading has to expressed as a function of how much you had to play with / had a bankroll of

Yeah $100K on $50K is a nice return. $100K on $500K is meaningless/noise/variance.

That sounds like it must be right, but my experience is that it is not how things work in the real world. I get that you can point to couple of short term traders that make huge money like that Sarao or that Japanese day trader that has been profiled. That isn't the reality for most because execution becomes a limiting factor. I am emphasizing that I don't think I am a very good trader. I do think my experience is more normal for someone who puts in the effort and paints a better picture and I am explaining the problems I have had as it relates to the thread title.

If you play poker you don't express your income income in percentage returns. Good games start to run less often the higher you play. In trading, you are often buying and selling at inflection points where the spreads can be very wide and you are trying to control risk at the same time. Everybody else is anticipating the same thing you are. It is not as easy as it sounds to just to trade bigger. Also shorting is often easier, but the stocks that are obvious shorts tend to be hard to borrow.

$100k on $500k is more achievable/sustainable/safer.

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Dude, come on. 20% is not meaningless. It is pretty good.

You have no idea if it is noise or not. $100k on $50k and $100k on $500k could both be noise. Or they could both be deserved.

I see what you were trying to say and there is some relationship there. But time is a better test than relative dollar amounts.

Traders can do a lot better than $100k on $500k, but they can also do a lot worse.

This nonsense is meaningless

100k a year pay sounds like more than 90% of people make.
my goal is to make 60k a yr
its more than enough to pay bills and travel
very simple goal to set, very simple to track

all this is revelant only to holding the stock
I short the same stock 2-3 times daily
holding a position for 3 hrs is an eternity for me
Yes the equity I short today may be hard to borrow tomorrow
which is why I spend hours daily researching while flipping a stock 7-8 times in 5 hrs
a $50.00 profit x 6 is $300 a day
nice pay for almost anyone.
you snobs with your 500k roll to make 1% is not what this post is about.

This is how I always look at it too. All the years I traded at firms it was always the same. On January 1st your account had 0 dollars in it. On December 31st it had whatever you made/lost on the year. You never thought of it as ROI but just as dollars made (or lost). The thinking tends to be more on profit versus drawdown.

lol @ people itt thinking they can sustain 20%/year. You should soon become the one of the richest guys in the club. Gl with that, in your momas basement.

Basically you are saying its easy to beat Buffett

You are confused, despite the very topic that you replied to (and presumably read). 20% is definitely sustainable. I know a guy that has done 1000% + for ten years running (he is the best of the best and almost certainly worth 8-9 figures however).

The question is, how does it scale? 20% on $100k - $10M or so is very different from 20% on $100M - $1B.

The nature of Buffet's bread and butter approach means pretty much (by definition) he is never earning $1000% PA. But is also probably never looking st 25-50% drawdown which can happen to traders. Primarily this has to do with leverage.

Anyway, you should rethink your tone relative to your experience before you go running your mouth. It is clear that you do not k ow what you are talking about.

I know how to do the math on 100k invested @ 1000% for 10 years and that is all i need to know.

i dont know anything about trading but the most basic common sense should tell you that not every trading edge is infinitely scaleable.

cmon, 1000% for 10 years running means exactly 1000% for 10 years running.

oops, misread his post.

but i mean isn't it obvious from the context that he means something else, like (most likely) the ROI on the trades he makes, rather than the ROI on his cumulative net worth?

i mean if a sports bettor makes 3% ROI on their bets where the cap on turnover is less than their bankroll, if their edge stays constant they obviously make less ROI each year on their net worth, but i'm pretty sure they would still refer to it as 3% ROI if that's what they get on the bets they made. dunno why it would be any different in trading.

I hope that is what he means That I can believe!

Bottom line is plenty of traders beat that 20% that you think is impossible.

C'mon now your like the frog living under the well who's never seen the outside world and believes the earth shall revolve around his ass. Plenty of traders can make 20%+ a year substainably esp when it comes to daytrading incase your not aware of that. Sure, it's not easy to end up in the 10%, but the ones that do make significantly more than that.
Btw! Buffet is worth in the billions.. I am sure he made a lot more than 20% a year in his early trading days with a more realistic capital to compare with. If he only made 20% a year with a $500 starting capital since day 1 that wouldn't even make him a millionaire.

Well firstly, the comment wasn't about the return. It was about the naked $100K. Win$ without having it relative to bankroll and number of trades is meaningless. Why? Well, if he has $10M, $100K is a terrible return. If he made it in 10 trades, it's also meaningless. If he made $100K starting with $50K with a large enough number of small risk adjusted trades, then we have something bragworthy.
Thanks for the link to the letter!

By the way, Buffett believes that 50-100%/year is easily possible if he could start with a small bankroll now. So Buffett believes it is easy to beat Buffett...if you like Buffett enough to link us his letter, then you must accept that.

And if you accept that you can do 50-100%/year merely buying and selling stocks, where do you get with leverage? Or ultra-leverage (options)?

You may well know how to do the math. However, it would appear that what you are lacking is common sense (not all of it is your fault).

But this is not some compound interest problem from your freshman finance class. People who understand risk don't put all their chips on the table at once.

This means both not betting your entire account on one trade, but also not having all your assets in your trading account. In fact, for some risk wise it makes sense to have multiple accounts both for technical reasons and broker solvency.

So earning 1000% PA on trading capital doesn't necessarily mean compounding your returns YOY as it may simple to someone using first level thinking.

He starts w/ $100k every year and usually stops around $1.5M, cashes out, buys gold, real estate, etc. And starts over w/ like $100k next year.

This is just common sense.

Seems like idiocy to me if you can get that kind of return.

But I agree, people can get that kind of return and then lack the brain cells to size it up. Heck, one very intelligent, no brain cells missing, high return guy I know whose name may or may not start with jb514 wasn't doing sizing properly relative to his risk and likely return until recently.

Ha.

He has a family and lifestyle he wants. Scaling his return just isn't worth the risk from his perspective. He has at least three other sources of income besides trading his own account. So he does what he is comfortable with.

When he was younger I don't think he pursued the same strategy.