Is it really possible to become rich from trading?

[jassielarry]

Hi Friends,

Is it really possible to become rich from trading?

[wprime]

In theory yes, but the odds are stacked against you.

It is a negative sum game in which a small % of traders have a huge advantage (through knowledge/experience/skill/access to capital/influence).

So unless you're extremely lucky or within that small % of traders, you're likely to lose.

[Naam]

In theory yes, but the odds are stacked against you.

It is a negative sum game in which a small % of traders have a huge advantage (through knowledge/experience/skill/access to capital/influence).

So unless you're extremely lucky or within that small % of traders, you're likely to lose.

what kind of trading and what frequency are you referring to?

-coconuts vs. bananas,

-shares,

-bonds,

-forex?

[David48]

Define 'Rich'

[Naam]

Define 'Rich'

years ago i scolded my oldest and best friend for claiming "rich is not having money, rich is spending money!"

since a few years i agree with him.

[fletchsmile]

Yes it's really possibly to become rich from trading. It is also really possible to become poor from trading

Cheers

Fletch

[Suradit69]

In theory yes, but the odds are stacked against you.

It is a negative sum game in which a small % of traders have a huge advantage (through knowledge/experience/skill/access to capital/influence).

So unless you're extremely lucky or within that small % of traders, you're likely to lose.

There are certainly some interesting cases involving people with (knowledge/experience/skill/access to capital/influence) ... such as Bernie Madoff (http://en.wikipedia.org/wiki/Bernard_Madoff) or Sir Allen Stanford (http://en.wikipedia.org/wiki/Allen_Stanford)

My favorite is the British moron, Nick Leeson. I guess he made someone rich from his trading, but it wasn't him.

On January 16, 1995, Leeson placed a short straddle (a non-directional options trading strategy, involving substantial risk) in the Tokyo and Singapore stock exchanges. It was basically a bet that the Japanese stock market would make no significant overnight move. This seemed reasonable, as the Japanese economy was experiencing a rebound after a 30-month recession. However, the following morning, at 5:46 a.m. on January 17, 1995, the Great Hanshin Earthquake struck. Its epicenter was the prominent port city of Kobe, Japan. Its magnitude was measured at between 6.9 to 7.3, and it lasted 20 seconds and killed over 6,000 residents. Its effect was to cause massive upheaval in the Asian markets as well as in Leeson's plans.

Not to be outdone, and in attempt to recoup his losses, Leeson then embarked on a series of increasingly risky new investments. He bet that the Nikkei stock average would recover swiftly. This did not occur and Leeson was further compromised.

Leeson carried on requesting funds from Barings to continue trading, in the hope that he would rectify his losses. In three months he purchased more than 20,000 futures contracts—worth around 180,000 dollars each— in an attempt to move the market. His attempts were all in vain, and these trades totaled three quarters of the eventual 1.3 billion dollar loss suffered by Barings.

On February 23, 1995, two days before he turned 28, Leeson decided the situation was beyond his control and he would never redeem himself. He fled, leaving a note that simply stated, "I'm sorry." Barings executives discovered what he had done, were forced to inform the Bank of England. Thanks to Leeson, Barings bank went bust.

The 233-year-old Barings bank incurred losses of 827 million pounds, or $1.4 billion at the exchange rate of that time. The sum amounted to twice the bank's trading capital and reserves, and led to its immediate collapse.

http://www.biography.com/people/nicholas-leeson-17172176#white-collar-crimes&awesm=~oI7mRt4tcdosi7

Edited June 24, 2014 by Suradit69

[TommyUK1960]

The only way traders get rich is from insider trading (Totally illegal). Just check out what takes place on wall street.

For the small fry trader you will lose money.

The people that make the money are the brokers. They win if your trade wins or loses.

Then you are up against algorithm soft wear so all this stuff puts the odds against you.

But I am sure there is someone out their that makes some money from trading just like professional gamblers.

[cobra]

Some day-traders may say yes, especially if you have a tolerance for risk,

Edited June 24, 2014 by cobra

[timewilltell]

Some day-traders may say yes, especially if you have a tolerance for risk,

You better learn a lot! Risk is inherent and managing risk is one of the keys. Getting good trade location is another, managing your psychology for better exits is another. Trade setups and indicators are the very least of your concerns. Learn to accept and manage probability and risk and work hard in understanding the nuances of the market. Trade for points not pips. Don't try for home runs either. Document everything and have a plan before you do anything, work out stops in sensible locations and targets that are attainable, then work out risk and reward and compare to your expectancy from your records of past trades on any given setup. Grade yourself.

Can you get rich? Yes but not if you dabble or listen to people trying to sell you the latest greatest indicator. Some are valuable but most are lagging so don't waste your money on them. Understand where buyers buy and sellers sell and the psychology why and make your entries there. Plan everything. Never chase.

Ah enough!

Sent from my iPad using ThaiVisa app

[puukao]

I've met hundreds of traders. Some on the exchange, some off. off the exchange....maybe 1 out of 200 make it. that one will start with a million dollars. never met one to make it with 100k or less. never. they sell books to make money...and spend their lives marketing. on the exchange, they make money but that was decades ago, and i don't have enough data to really know the % that made it.

do that math......you need about 2-3k a month to "make it" trading....that is 3% a month on 100k....which is actually a high number. this is trading.

gambling is another thing. i would bet it all on one sports game.

trading commissions are the killer. if you trade more than a few times a day, your odds almost go to zero.

anyhow....if anyone tries to tell you they can make money...have them prove they make money before you think they know how to trade.

then that conversation ends.

good luck.

*most money i made was on a 5-year investment in the stock market. so maybe try to buy 10,000 shares of a $1 stock and hold on.....

[ezzra]

Yes, very possible, I have started with 3 millions and now I have 1 million....

[bra]

The only way to make a small fortune from trading (or owning an airline) is to start with a large fortune

[AyG]

As the old joke goes:

- How do you make a small fortune trading on the stock market?

- Start with a large fortune.

Certainly it is possible to make money trading equities, bonds, foreign exchange. That's why many (most?) banks have proprietary trading desks, trading the bank's own capital to generate profits. Though, interestingly, an executive of a global bank recently told me that the return on investment was higher from the bank's banking activities than from proprietary trading.

Life on a trading desk in a bank is pretty cutthroat. If you don't make a decent profit, you're out. (More usually, you don't get a big bonus, which is the signal for you to move on before you're sacked.) Through a form of Darwinian selection only the most profitable traders survive - and that's only for as long as they continue to be profitable. As an individual, those are your competition.

The odds are stacked against you. The big boys have the best data, best computer systems and the best skills. However, if you're playing in a niche market you might have a chance. It's not something to be undertaken casually. It requires a lot of time and commitment. You can't just buy something and walk away in case the market moves against you.

Personally, I don't trade. I invest. I'm perfectly happy with getting a fairly steady return of 10-12% a year from a diversified, relatively cautious portfolio which only requires a few days' work a year to maintain. At least I get to sleep at night and don't have to worry about losing my shirt.

[goatfarmer]

Anything that can be imagined and is not self-contradictory is 'possible'. I presume that the OP really means, "Is there a fair chance of getting rich by trading" and, by overlooking this distinction, I would say his chances are extremely low, as they are for most people (myself included).

On the other hand, it is highly probable that one can make a good return by investing for the long term in a well balanced portfolio of quality stocks bought at fair value. But the discipline required to do this evades most people.

[SheungWan]

The only way traders get rich is from insider trading (Totally illegal). Just check out what takes place on wall street.

For the small fry trader you will lose money.

The people that make the money are the brokers. They win if your trade wins or loses.

Then you are up against algorithm soft wear so all this stuff puts the odds against you.

But I am sure there is someone out their that makes some money from trading just like professional gamblers.

Expert moaners to the fore!

[bushwacker]

Is it possible ..... YES.

Is it likely ..... NOT So MUCH.

To make money for the long term, you really need to be a contrarian, self thinker, with a very strong discipline. The market is mindless, and unforgiving.

P.S. I always thought it was a zero sum gain!?

[marioc]

Yes, it is

[pgrahmm]

Yes.....many women from Thailand and other countries have been successfully doing this for years.......

[gazzasore]

All Markets are Manipulated to much now so its a Mugs Game

[TonyPaul]

Jassielarry, I am a professional trader. Firstly, you have not mentioned how much cash you have at hand to trade. If you have very little you will lose your money through drawdowns. A lot of people in Thailand are attracted to trading as a way of earning money. Forex is the easiest to get into and the easiest to lose money. Lots of advertising, free to join and stacks of free info on indicators an surefire systems. Very few of the sites talk about money management and risk control. Way to difficult when you can sell the easy stuff that does not work! You may well meet traders that say they make money but the Forex traders are classic for incessantly talking about the day they made 100 pips. They just fail to talk about all their losing days.

Can you make money? Yes but your own human emotions are stacked against you when it comes to trading and you will more likely lose way more than you can make.

[sunshine51]

"Is it really possible to become rich from trading?"

Just take a look at Dubai....that should answer one side of the question anyway.

[SheungWan]

Yes, it is

Some markets yes, some markets no.

[SheungWan]

All Markets are Manipulated to much now so its a Mugs Game

The mugs are the ones making such comments.

[blazes]

I agree with nearly all the comments here. To make big money, you need to be rich before you start. (That is why banks dominate the markets.)

But if you DO have say 100k to throw away (in other words, the stock market is like a casino...you have to be prepared to LOSE and not worry about the money you have just lost), you can make money.

One aspect of trading might make you money on a regular basis: choose a bank or oil or gold company and follow its trading pattern for a few months. You need to find a company whose shares trade in the millions (very liquid therefore) and in a volatile situation (oil and gold, for x). Also choose a company that pays a dividend of about 5/6%, so that if your trade gets frozen at too high a price, you can still pick up a dividend until the price comes back up.

So, say Citi Bank's shares are $100 and you have $100k. So, at 9.30 am (ET) you buy 1000 shares of Citi Bank at $100. By 11am the shares have gone up to $101 or 1%. You sell your 1000 shares at $101 and now have made a profit of $1000 in a few short hours. Hard work.

But if Citi B has gone down to say $95, you can still hold on, confident that you will at the very least be able to pick up a dividend payment of $5000 per annum. As I say, this will not make you rich, but at least you are minimising your losses.

But note, you are not going to get super rich that way. If you can make that trade just once a week, you would make about $50,000, which is not at all rich in NY, but would be super duper rich in Thailand......

[blazes]

"Is it really possible to become rich from trading?"

Just take a look at Dubai....that should answer one side of the question anyway.

The Dubai market went down by about 30% today....just a coincidence...fears of a real estate bubble bursting.....no way even a professional trader can anticipate that....this is truly a Black Swan event.

[martijn12345]

Interesting to see how the OP's original questions vagueness induces all kinds of replies. ANY kind of trading, whether you wanna export (clothes, handicraft, furniture), day trade shares or trade the forex market, the odds are stacked against you. This I not say to discourage you, but to say there is no 'get rich quick' thing in it. That's probably the biggest reason why people lose money. They jump in without really knowing what they are doing. To be successful at any business you gotta work your ass off. If you wanna export handicraft, you gotta know where to get the best stuff, at the best prices and then you need to find somebody back home to who can buy it off you, you gotta figure out how to ship it, how to insure it. And by the time you get it all figured out, the product is out of fashion. That being said, some people have a nose for what will sell well back home, and can use the knowledge to quickly jump to another product and keep it going. Most people however end up with lots of stuff in a garage box in northern France they will never be able to sell.

Trading stocks, derivatives or forex market. It's not easy, there is A LOT more to it than meets the eye. And as been mentioned before, most people jump on some 'This will make your rich guaranteed ' advertising of a bunch of indicators or bot. That's a sure way to lose your money. If you are interested in LEARNING what it's all about, there are some good and free websites to teach you the baby steps, and then when you think you know it all and start to trade. You will most likely lose more than you win for the first 1 or 2 years. During that time you will learn from your mistakes, keep watching videos that hopefully teach you something new, keep reading books to improve your knowledge. And perhaps then you will start to get a small idea of whats going on and how to work with it.

All of it is doable, if you put in the effort, the time and if you are prepared to be kicked down 100 times and always dust yourself off and get back up again.

[Frank James]

Tony Paul said:

"You may well meet traders that say they make money but the Forex traders are classic for incessantly talking about the day they made 100 pips. They just fail to talk about all their losing days."

Great point! The capacity for self-delusion in any form of gambling seems endless. And this is gambling. The only winner is The House. Always.

[Doc46]

It is the same as gambling;;;;;you win a bit & and lose a lot;;;;;;;; MOST OF THE TIME, Hows your luck ? can & will change from good to bad.

[AfterLOS]

In theory yes, but the odds are stacked against you.

It is a negative sum game in which a small % of traders have a huge advantage (through knowledge/experience/skill/access to capital/influence).

So unless you're extremely lucky or within that small % of traders, you're likely to lose.

Its worse than that. Only 1% win on a long-term basis. And here's the kicker - the losers come back

for more. And its worse than biblical days - there were no dollars in 'em days but s.o.b.s yeah.

Thaivisa is the only place on Earth where no traders lose money

http://www.businessinsider.com/henry-blodget-biggest-bull-market-sign-yet-day-trading-is-cool-again-2010-3