So you want to be a trader?

Truth be told, I’m a little embarrassed about how I got started trading, but I guess I’m about to share my humble beginnings with the internet… When I graduated from college, I got a ridiculous brochure in the mail with a guy in a cowboy hat explaining how it was possible to begin with a few hundred dollars and to eventually corner the Live Cattle futures market. I suspected it wasn’t as easy as the brochure made it seem, but who would not want to turn $500 into $250,000 in two months, right? So I bought the course, funded an account, and immediately (yes, I mean immediately) blew it out. I repeated the process a few times, learning a bit more at each step, until I was fortunate to make a connection to someone who would become my mentor and guide and without whom I probably would not have succeeded. After learning how to not lose money (an important and oft neglected step in the growth process of a trader), I was fortunate to be trading the British Pound futures during the Asian Financial Crisis and the rest, as they say, is history.

It certainly wasn’t smooth sailing after that as I had my share of further struggles, especially when adapting to new markets, but the point is this–I have a special place in my heart for the individual, self-directed trader. I suspect the success rate is far less than anyone realizes, though I have no data to support this. I also spent my money as a developing trader on any number of misguided chat rooms, “educational” services, and went down many dead-end roads that could have been avoided. If this message sounds familiar, know that I have spent the last six months of full-time work writing a book just for you, and that you are one of my main reasons for starting this blog.

You will find my message to be very different from much of what you see on the internet. For one, I do not believe anyone should be casually involved in the market (except perhaps at the longest timeframes.) If you are playing at being a trader or, even worse, a part-time daytrader, your chances of achieving any enduring success are very small.  Either make the commitment to become a market professional, or accept that your market activities will remain a hobby. Furthermore, remember that hobbies usually cost people money.  (This may be fine, but please be realistic about it.) Only after you have made this decision–to develop the skills to become a market professional–do you have any real chance of meaningful success.

Let me leave you today with the thought that trading is very difficult, and you have to be prepared if you are going to succeed. If you are struggling, you need to first make sure you are doing and learning the right things (i.e. things that actually work in the market.) Then do a serious gut check and  make sure you are prepared to weather the learning curve: financially, emotionally and that you truly plan to devote years of consistent work to this quest. You will likely find that this is the most challenging and demoralizing thing you have attempted to do in your life, and it is unlikely you will have any real success in the first three years.

Oh yeah, one more thing, and it’s very important: what you’re trying to do can be done. It is possible to trade well, and it is possible to trade consistently. In my next post, I’ll share some ideas for some things you can do to better equip yourself for this journey.


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.