http://www.traderinterviews.com/idealab/idea/view/should-i-ask-interviewees-how-much-money-they-make The latest comments on Should I ask interviewees how much money they make? Sun, 14 Jun 2009 14:25:47 -0700 en-us Copyright TNC New Media Inc., 2006 - 2010 http://www.traderinterviews.com/images/traderinterviews_144x19.gif http://www.traderinterviews.com/idealab 144 16 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c129 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c129 Sun, 14 Jun 2009 14:25:47 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c118 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c118 Fri, 06 Feb 2009 22:35:29 -0800 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c104
It really doesn't matter whether they trade long term or short, because you can always calculate an average daily profit amount over any time frame. This is the only way to compare a trader with a $1,000,000 account to a trader with a $150,000 account. Otherwise, you are comparing apples to oranges in my opinion. Another option would be a weekly calculation.

As to whether you should ask "the question", I say you should if they are trying to sell their trading knowledge to others. Again, "the question" means little unless you ask them about their trading capital and their average daily or weekly profit amount.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c104 Thu, 12 Jun 2008 23:08:58 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c95
We need to know if these people are actually earning a living with their trading. Last week's interview with Tim Ord points out one of the issues. Tim Ord trades full time but he actually supports himself through his service subscribers. I certainly don't fault anyone for that but I want to know if the "professional" traders that you interview that "trade full time" are significantly profitable on a consistent basis.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c95 Mon, 05 May 2008 19:12:01 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c81 By all means publish a working strategy so that others can evaluate, comment and feed back suggestions for improvement. But always insist on knowing the following:
Win:loss ratio
Ave win : ave loss
Return on capital
together with the time period that the results relate to.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c81 Sun, 06 Apr 2008 10:25:02 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c78
Also, you seem to be a very successful trader. Can you recommend any books to review or other sources of information that helped your trading the most?]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c78 Sun, 06 Apr 2008 02:59:10 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c77
This is an issue that is very important to me. I think you absolutely have the right, and the duty to your readers, to ask an interviewee about how much they make. However, I do not necessarily think you have the right to ask about the specific dollars they make as that is no one's business but theirs. Instead, they should be willing to share their performance in terms of some hypothetical circumstances. For example, you could ask them, based on their actual returns, to tell you how much they would make in a year if they had a hypothetical account of say $100,000 based on their real time performance. They could explain how much they risk per trade of that $100,000, what their worst case draw down in a typical year is on that $100,000 (i.e. -10,000, -25,000 or whatever), and they could tell you what type of profit they make on average per year on that $100,000. So for example, if they have a $1,000,000 account and they typcially make $3,000,000 per annum, they do not have to reveal those actual assets and income but instead would tell you and your readers that they would make $300,000 on the hypothetical $100,000.

I think this question is absolutely fair game because if they are not truly making good money under acceptable risk and reward parameters they are willing to share, then there is no way a reader can determine if their methodology is worth pursuing or if the interviewee is even credible. Many authors and speakers act and talk as if they are excellent traders only later to disappoint when you see their actual returns or they run a fund of some type.

Actual money made is perhaps the single most important question you can ask. If the answer is bad, then the interviewee has no right to be acting as if he or she is a credible trader. If the answer is good, they have every right to speak from a position of credibility and authority. I think you also have to be clear that they are no way representing or warrantying any returns nor are they saying that anyone else can use their methodology to recreate the same or similar returns, and that the past returns are no indication of future returns.

Please give me you thoughts on this as I have debated this with many interviewers and authors and no one has ever submitted a compelling reason why any interviewee should not be willing to discuss their returns using numbers that do not reveal their actual income.

MSM]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c77 Sun, 06 Apr 2008 02:41:45 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c76 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c76 Sat, 29 Mar 2008 12:18:36 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c75
A simple question around % returns would give the info we need and not offend anyone.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c75 Wed, 26 Mar 2008 16:48:16 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c74
You could also get creative the way you ask - saying "What are your dollar goals for a day/week/month/year?" What is the dollar amount that you can reach and say "I'm done for the day." You could also ask them about their best $$ year and their worst $$ year, with numbers, and ask what they think factored into make it a really great year or really tough year.

I thought the interview with Trader Stewie was excellent, and the the conversation about the money came up naturally with asking about his $$ goals on a day/week basis. I know him and he is an excellent daytrader, very good discipline. I thought he answered the money question candidly and claiming that he aims for $3000 a week seemed very realistic. Having known him for a while, I can vouch that $3k a week is a very reasonable and consistent number for him.

I think it is a great thing to add to the interviews. Sometimes I hear people talk about how they trade and I think "Wow, they must have some serious ups and downs" and other times it sounds like they make small but very consitant money, but it would be great to hear some actual numbers.

Asking them to identify their best and worst years and reflect on the reasons might be a good way to easy into the money topic.

--DougSF]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c74 Tue, 18 Mar 2008 16:32:34 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c73
Thank you for your interviews. I couldn't tell you how many times I have listened to you interview with Dick Diamond as well as some other traders. I would like to attend one of Dick seminars in the future once I have built up my trading account. That Interview held a wealth of information for me.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c73 Sun, 16 Mar 2008 22:58:26 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c72
You must ask additional questions to give listeners some color on what kind of trader they are listening to. For instance....If you are interviewing a daytrader, you would want to ask how much they have earned each year for the last few years, how does their P&L;fluctuate, are they a very consistent earner to get to their yearly earn or does their P&L;fluctuate significantly, how much risk capital do they have behind them ie. ( do they have 500k cash to risk and lose) are they a proprietary trader with access to firm capital that is at the sole discretion of the account manager or are they a retail trader with only 4 to1 intraday leverage and how much $ do they have in their account to work with.

If the trader is a swing trader, position trader or investor then the same question should be asked as well as their percentage return for each of the last few years.

Its important for listeners to understand that for those who are large earners, 500k a year plus consistently, that it takes a unique individual to take on the large sized positions and handle the volatility in one's P&L;to achieve these numbers (this is particularly applicable to daytrading) Swing traders, options traders, investors can generate these Yearly earn numbers with smaller sized positions and with greater ease if they have large sums of captial in their accounts. ie. if an investor has $10 million account earning 500k is obviously laughable to be considered a successful anything, but if they have a $10 million account and only utilize $2 million then their earn should be obviously be weighted more heavily.

Lastly there are many traders who are in the process of creating algorithms (black boxes) that have high percentage of winning trades but do to other factors (scalability, liquidity, commissions) are not creating a sufficient earn.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c72 Fri, 14 Mar 2008 18:28:45 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c70
1. How large was your initial trading account?
2. How long did you trade before you were able to live off of your trading profits?
3. What is your money management strategy (what % of your profits do you reinvest in your business and what % do you pull out as income)?

Money "made" is an interesting number but highly subjective because it doesn't tell us how much is reinvested, what % of that is relative to the trading account size, etc. I would imagine any trader would have no issue giving answers to the above questions - they shouldn't be invasive or inappropriate.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c70 Fri, 14 Mar 2008 13:30:18 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c69
I think everyone has said something that makes sense so far. However I disagree with "leont" about these interviews leading us to the slaughter without disclosing how much these people are making. I Trade Forex and have listened to every single interview on this site; regardless of what the trader traded or what their approach was. In my opinion it is easy to discern whether or not these traders are making money doing what they are doing. Maybe it is experience that makes it a little easier, but I think it is just common sense. Also, if a trader were smart and SERIOUS about trading, they would test these strategies with demo accounts or very small live accounts before risking anything serious. That being said, if you protect yourself first, there is no being led to the slaughter.

For example, out of ALL the interviews so far the one that helped me develop a winning strategy was Avery Horton's interview. He does not disclose how much he makes, but its obvious that what he says works.

My actual opinion about disclosing how much is made... I think we all want to know. That way we could easily see which strategy seems to make the most money and just do that right? Wrong, because it may not suit who we are as a trader, so we have to be careful and not fool ourselves into thinking that we will be able to accept certain risks that others can. As far as disclosure goes, I'm not interested in dollar terms and I don't think anyone should be AT ALL.

Percent profit is really all that matters because with a consistent win rate any amount of money is doable. I would implore every one here to think of these interviews as indicators and not necessarily buy and sell signals. These different tactics may be indicative of a good strategy but then a fair amount of personal homework is necessary to get it right and make it suit US. Avery Horton's "Buy Zone" doesn't suit me the way he uses it, but it triggered a light bulb for me.

I think we all just want to hear a trader say "I make about "X" amount a year doing "--------" Strategy" because we can identify the future lifestyle we want with a dollar amount. But I think thats really just fantasizing..]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c69 Fri, 14 Mar 2008 13:23:50 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c68 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c68 Fri, 14 Mar 2008 03:18:52 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c67 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c67 Fri, 14 Mar 2008 01:31:20 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c66
I think you should encourage everyone to consider answering this question because it really is at the heart of what we are trying to accomplish. A successful trader just might be inclined to "show off" and let us know how much money is being made.

We should hear from everyone who wants to be interviewed. We might miss some useful information if you only accept candidates who agree to discuss personal income.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c66 Thu, 13 Mar 2008 23:33:19 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c65
I am a retired sureon and was once interview by a high school student. Eventually he asked about the salary range of a surgeon. I replied that in my part of the country it is probably between 200K and 500k per year although there are many outliers depending on speciality, how hard you want to work etc. Had he directly asked my what I made I would have given him that range and not been offended. It is obviously much more diffficult to know the range for a retail trader (-100k to 5M?). It certainly would be of interest to me to know how everyone else out there is doing.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c65 Thu, 13 Mar 2008 21:16:18 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c64 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c64 Thu, 13 Mar 2008 21:15:05 -0700 http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c63
Basically finding a solution to prove yourself of which this sounds like one.]]> http://www.traderinterviews.com/idealab/entry/view/should-i-ask-interviewees-how-much-money-they-make#c63 Thu, 13 Mar 2008 19:55:16 -0700