It’s no surprise that people email me asking what type of returns they can expect if they get a good futures, Forex or stock market education.
This is asked by those doing swing trading, day trading and long term investing alike. It’s asked by those trading Forex, futures and those trying to learn the stock market and doing stock market research.
It’s a natural question to ask. But trading is a bit different than getting a job that pays a consistent, reliable wage. So the first thing that must be said is that most people who start a trading business do not succeed. On the other hand that is actually true of any business, not just trading.
Of course we wouldn’t become traders if we didn’t think we could beat the odds and become successful. So the next question would be: “How much can a successful trader expect to make?”
I’m not aware of any universal statistics available on that topic, but I can guide you to some resources I know that track trading results. To the best of my knowledge they are objective and reliable.
The first resource is Barclay Hedge (www.barclayhedge.com).
They have statistics each month on the managed futures performance of the top 10 traders managing less than $10 million, and also those managing more than $10 million.
To get the statistics you have to register at the site, but registration is free. Also if you subscribe to Active Trader magazine, they publish the numbers every month.
The second resource is Futures Truth Magazine (www.futurestruth.com).
They track the results of automated trading systems and publish several “top 10” lists.
In observing the lists, one interesting fact is that only 1 out of the top 10 systems for the past 12 months is also on the top 10 systems list since their release date.
This is why everyone prints the disclaimer: Past results are not necessarily indicative of future performance.
That statement if found on every ad for a very good reason. It’s true!
A third excellent resource is the “Market Wizards” series of books. Reading even just one of these books will give you a realistic view of what successful traders have had to go through to reach their stature. [disclosure: this is my affiliate link to Amazon.com]
The “secrets” to becoming a successful trader are not secrets at all. They are well known and documented, but rarely followed. I’ve had many conversations with traders who have asked me the secrets of success, only to have the conversation end with them saying, “I know all that stuff already, but what’s the real secret?”
This supports my belief that “knowledge is NOT power.”
The “power” lies in the DOING.
Did you find any of these 3 resources helpful?
Do you know any other good resources about the reality of trading and what it takes to achieve trading success?
Please post a comment below.