Met up with many traders during our AFACT second anniversary dinner few days ago and as usual we ended up discussing about trading and the market condition. Most traders are finding it tough to make good money due to the various reasons I have written recently.
Met a trader from another arcade yesterday and was told that he had resigned as a trading member, closed account with his clearing firm and pondering what to do next with whatever money left he withdrew. Probably in his 50s, he would take a break for the next 6 months. I felt sad for him, trading is so uncertain, it's only meant for those who are willing to change and adapt according to market condition and against the better players coming on board.
Spreaders and Scalpers blamed the Algos, they are most affected by the advance in computer technology, losing their most important edge, "speed". Short term traders are increasingly finding it difficult to survive, the Algos distort the market. I believe it's still the big boys who are able to control the market and very efficiently with their speed and size to pulverise the small time traders.
In order to survive, trade small, follow the trend and go with the waves, trading should not be stressful once you have a plan.
For those following my other blog on trading performance between 2 veteran traders would know that there are some traders who are still able to survive. 8038 has been trading SGX products from Australia for the past 2 weeks and still able to be profitable consistently despite the lack of speed a few thousand km away.
Why? Because he don't do high frequency scalping, his comm is just a fraction of his profit unlike 8022. To be successful like 8038, a trader need to be patient to wait for a trading set up and the nerves to ride the profit. 8038 losses are small on his losing days, I admire the type of discipline he has.
Looking at the account of 8022, he didn't lose money trading over the last eight months, his losses are in the comm. Despite repeatedly reminding him to be conscious of the trading cost he insisted on his way of trading. These are some of the traders that I have honestly told them not to waste their time. It's not about perseverance, it's about being stubborn.
For those who are not making money, their characteristics are similar to 8022. for those who are willing to change, there is HOPE, 8038 is a very good example for all to learn.