The Realities Of Being A Professional Futures Trader

  • November 26, 2014
  • Blog

The thought of being a Futures trader conjures up a lot of images in the mind. There are the guys in brightly coloured jackets down on the floor in Chicago yelling at the top of their lungs to each other.

There are the images of people in vast rooms filled with computer screens all silently clicking away in proprietary trading groups such as the ones I have spent my career in.

The truth is, it is somewhere in between. Futures trading will take you from the adrenaline fuelled pump of a fast market when prices are moving and you have to quickly jump in and out, hunting for the opportunities and seeing the profits increase on your screen on a second by second basis. There is nothing in life I have found that compares to this in terms of excitement, fear, and happiness all in one.

But there is also a down side and this is something you have to accept. There are long periods of the day when nothing is going on and it can be very boring. I have been on trading floors where you can turn around and look across the room and there will be people asleep at their desk, other guys wandering off to play a video game, one office I traded in even had a table tennis table. But you are always alert. The market can come along and offer you a plate of gold at any moment. You cannot force it. You can only ever switch off temporarily.

Fortunately a lot of the strategies I teach I used because I knew they would happen at certain times of the day, such as around news releases or market opens or closes, this helped a great deal because I knew I had to be at my desk at these times to capture the profits. I would often make over half my day’s profits on these Time of Day setups.

There are ebbs and flows to profits as well. The techniques I teach are with the aim of being able to grind out steady profits day in day out. Which is one of the reasons I am against longer term strategies such as trend following or swing trading. With the very short term techniques I employ a bad run of 3-4 losing trades will cause you a bad couple of hours. But a strategy that only trades once every other day will cause a bad run (which is perfectly normal) to last a week.

You have to accept that not every single trade will be a winner, but as I will explain to you with order book scalping you can often limit your downside to one or two ticks, sometimes zero risk. And THAT is a key reason why professionals make a lot of money and retail traders don’t.

Your profits are also fairly non linear. Some months I would only make $6000 or $7000 which when you are trading professionally at a proprietary trading group will only leave you a take home pay of a couple of thousand. But then you would get days when something big happens in the market where I would bank $10,000 or $20,000 and that is why this is the best job in the world. But you have to be ready at all times to be alert to the opportunities.

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