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T E C H N I Q U E STraders both green and experienced have numerousquestions about trading success: How is it defined? Howdo you measure it? When can you expect it? Here aresome answers.

10 ways to measuretrading success

BY J IM W YC KO FF

A t some point in nearly every-one's trading timeline, theywonder how their trading suc-cesses (or failures) comparewith those of other traders. Wonderingjust how well you stack up to others inthe industry is a natural curiasity and ahuman psychological tendency.However, actually knowing rhe w inningand losing tendencies of others doesn'tdo a lot to move you further down theroad to where you want to he regardingtrading success. Most traders also won-der about the success rates of the "pro-fessional" traders, the ones who maketheir living solely hy the profits theygenerate from trading. 1 will provide youwith an answer to this question at theend of this feature.

There are 10 questions all traders musrask themselves, the answers t>f which canhelp measure trading progress and success(see "Measuring success," right).These questions should help you deter-mine where you stand in this challengingfield, st> lets take them o ne at a time.

would agree that ultimate trading suc-cess is defined as being profitable,making more money than you lose.There are other secondary factors thatalso define success in trading, such asfinding a balance between trading andother l ife activit ies. But i t 's beingprofitable at trading that is the hench-mark of defining success.

What is trading progreBeginning traders should not exjwchave immediate and ultimate succtrading futures, SUKICS or forex markWhat they can expect in the early goi.s to make steady progress through ging knowledge and experience. Eveteran successful traders continuemake trading progress. Achieving

IG SUCCES1 0 h a r d q u e s t i o n s to a s k w h e n e v a l u a t in g y o u r t r a d i n g .1 . What is trading success?2 . What is trading progress?3 . At what point should I expect to make money?4 . How long wi l l it take to go from neophyte to guru?5. When ( if at a l l) should i throw in the towel?6. Am I sti l l hungry fo r t rading knowledge?7. How many losing trades should 1 absorh before I change m yplan o f action?8. How can I keep myself motivated?9. How much should i listen to other traders?1 0 . What is the a verage success rate of the profe ssiona l trader?

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TRADERS who TRULY enjoy the PROGRESS and processof trading have a SIGNIFICANT edge

At what point in my trading time-I expect trading "success"?

is sustained tradingaof trading. Immediate, and likelya heginning futures

Many times I get questions from less-

to them is that yoube perfectly satisfied with

s

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T r a d i n g T e c h n i q u e s

The LEARNING curve IMPROVES when a trader has CONTACTwith OTHER traders with similar EXPERIENCE

ing partner or buddy to share yourideas and discuss markets and trading.The learning curve improves when atrader has contact with other traderswith similar experiences.It also is beneficial to have a n experi-enced mentor guide you through therough waters all traders experience. Butat some ptiint most traders want to heautonomous in their decision-making.As many traders gain more experi-ence, knowledge and confidence, theywill use outside influences as secondopinions to reinforce or provide anotherangle to their own sound opinions.Many traders also have full-time dayjobs and need outside sources to help

save time and to keep track of what'sgoing on in all the markets. What is the average success rateof the professional trader? 1 have notseen any exhaustive studies of the per-centage of winning trades of tbe aver-age professional trader. However, it isgenerally agreed up>on by many in our

industry that the better professionaltraders have a winning percentage ofaround four out of every 10 trades or a40% winning percentage.

Breaking this down even further, it isestimated that half of the winningtrades are only small winners and notmuch better than breakeven. Thus, it

can be extrapolated tbat most ofprofessional futures traders make mostheir money on one or two trades ouevery 10.Th is only underscores the importaof sound money management in futtrading. And that, if you break it dogives you the best answer to bow achieve success in trading: You cut les short, and you let winners run.

Jim Wyckoff is the editor of t h e TrendFutures analytical , educational a n d t raadvisory service, wh id i is published by FuM a g a z i n e G r o u p . Y ou c a n c o n t a c t h ijim@jimwyckoff.com.

O ne- Trig gers-O thersOne-Cancels-OthersAlert-Triggered OrdersTtailing S top O rders O T O s In Al l Markets

Futures/Forex/Fun' 1-800-947 'S228 "I have never seen so mai

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