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Trading: Commodities, Equities, Forex, Crypto Etc
Jon Jones
#1 Posted : Saturday, September 19, 2020 2:42:50 PM
Rank: Member


Joined: 9/11/2015
Posts: 186
Location: Thika
Disclaimer: This is not financial advice. It is a recollection of my experiences which may or may not be true. Exercise caution.

Who is a professional trader?

A professional trader is an individual that takes calculated risks using probabilities and defined risk management.

Are markets a casino?

All markets are a casino. The house is represented by professional traders, brokers, and educators. The gamblers are represented by retail.

Why do most retail traders lose money?

Most retail traders don't have strategy with an edge, and don't manage risk professionally in terms of stop losses (where leverage is used), and position sizing.

What is the reality of professional trading?

You will make money and you will lose money. With a good risk-reward, an edge, and proper risk management, your winners will pay for your losers in the long run e.g in a block of 30 trades you should be in profit.

Which are the most profitable markets?

Crypto, due to high volatility hence no need for leverage. Volatility is a professional trader's paradise and an investor's nightmare.

How long does it take to be profitable?

There is no defined degree or time. However, most traders take a few years to be consistently profitable. This process can be shortened by getting mentored and riding on the coat tails of seasoned traders.

How much does one make?

The market, your strategy's edge, and your bankroll determine how much you are going to make. There is no fixed or rough estimate even in percentage terms.

What is the most important quality of a professional trader?

Discipline. You have to wait for the markets to come to you instead of imposing your will onto the market.

What is the most common denominator among successful professional traders?

Most successful professional traders are one-trick ponies. They implement one strategy exceptionally well. You will never find a successful professional trader who uses bollinger bands on Monday, Elliott waves on Tuesdays, pivot points on Wednesdays etc.

What can you say about trading?


Trading is the most personalized occupation in the world. Two traders can use totally different approaches and make money in the long run. There is no single correct way to trade. You have to find a strategy that fits with your personality.

Why is risk management important?

It ensures that you survive drawdown periods. It is common to see retail traders making supernormal gains because they do not manage risk. However, as soon as they hit a drawdown period, they give it all back.

What do you have to say about trading educators?

Most trading educators that charge people for courses are not real traders and if they trade, they haven't reached professional level status. Professional traders don't have time to teach newbies for a fee.

What are the most important aspects of successful trading?

You must have a strategy that has a statistical edge. You must manage risk professionally. For example, if your strategy has a win-rate of 50% and the risk to reward is 1:3, in the long run, you will make money despite losing 50% of the time. When you win, you win big, when you lose, you lose small.

What do you wish you would have known before you started trading?

I wish I knew more about risk management, specifically position sizing. I would have stayed a lot longer and found my edge before blowing my first account. No professional will ever tell you their edge so you have to find one that suits you.

Do you make money everyday?

I don't day-trade. I am a swing trader. I make money on some trades and lose money on other trades. But my winners pay for my losers resulting in a positive equity curve with shallow drawdowns. As a trader, you have to accept that losses are part of the game.

What is your parting shot?

Trading is one of the most psychologically challenging jobs in the world. It is unique because it is the only occupation where your employer takes money from you if you have a bad day/week. That being said, it is financially liberating and frees up a lot of time for fun activities. I'm not a smart person so it took me two and a half years to comfortably say that I had gained consistency. It may take you longer or shorter depending on how thick your skin is, how sharp your mind is, or how determined you are. Eventually, it boils down to whether you are willing to dedicate those 10,000 hours to gain competence.
Since men have learned to shoot without missing, I have learned to fly without perching
Jon Jones
#2 Posted : Friday, September 25, 2020 9:58:03 PM
Rank: Member


Joined: 9/11/2015
Posts: 186
Location: Thika
Most people would lose money and go bankrupt even if they had a strategy with a clear edge.

Example: If I gave you a biased coin with 60% chance of heads and 40% chance of tails, and Ksh 1,000 to bet, most people would go bankrupt despite the obvious 10% edge.

If you chose heads, you would go bankrupt. If you chose tails, you would go bankrupt too. Only professional traders would understand why most people would be unable to exploit the clear edge.
Since men have learned to shoot without missing, I have learned to fly without perching
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