Do You Have to Be bright to Trade E-Mini’s?

Do You Have to Be bright to Trade E-Mini’s?




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One of the better traders in my room has been there for several years. I can nevertheless remember when he was considering whether or not he should start trading and he asked me, “I only have a high school education, do you think I am smart enough to be a trader.” Let me state unequivocally that I have found absolutely no correlation between education attainment and trading ability. We all have innate intelligence and if you can learn, practice and preserve by tough times you have as good a chance as anyone to become a profitable e-mini trader. Don’t let anyone tell you differently.

Having said that, do really “smart” (at all event that method) people tend to be better traders than the rest of the pack?

Oddly enough, some of my most disappointing failures as an e-mini educator have been with individuals who were extremely intelligent. I’ve never been able to put a finger on what exactly went wrong with these individuals, but by and large, they could never wrap their heads around the randomness of the market. A trait that I noticed in all these traders was their unrealistic expectations of their natural instincts in trading. I have in addition to meet the trader who could trade like a demon based on natural instincts. Trading is a very unnatural ecosystem in which to work as we use tools to look forward for possible trades and what has occurred in the past may or may not be applicable to what happens in the future.

I once had an individual with a mathematics degree use an complete year trying to write an algorithm to predict price movement. Despite my protestations, he continued on this bent and proceeded to blow his account clear out of the water. He wanted a functional formula that looked like this:

A2+B2=C2 (the Pythagorean theorem); instead he should have written the formula like this:

A2+B2=3 different possibilities, then stated a probability to each possible outcome and trade, or not trade, based on the probability of success.

My point is not all that difficult to grasp; if you are smart enough to take a motor apart and put it back together, or write computer code, or do any job well you stand as good a chance of succeeding in e-mini trading as the next person. It is all a matter of your willingness to work, learn, and keep learning. Your education level, which is as poor an indicator of intelligence as most anything, has no bearing on how well you might fare trading e-minis.




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