Do You Know if Successful Traders Exist?

At first glance, successful traders are found and documented most everywhere you turn.  Examples include folks who run mentoring programs or serve as trading instructors, profitable traders documented in literature (e.g. Master Traders, Market Wizards, Reminiscences of a Stock Market Operator), friends or third-hand acquaintances who have made great sums of money in the markets, ex-floor traders, etc.

An imbalance does exist, however, with regard to what it takes to garner a following in the stock markets and other disciplines.  As a pharmacist, I usually had at least 10 people seeking my wisdom every single day about medications and supplements.  To earn that coveted opinion, I worked my butt off for four long years of pharmacy school in exchange for a doctorate.  Contrast this with the world of investing where trading gurus need only make claims of success, be convincing in their delivery, and perhaps show a profitable trade or two before others seek their direction to wealth nirvana.  In many cases, people will purchase wares written by these trading gurus or pay good money to attend seminars.

Indeed, the credibility imbalance is real because it doesn’t take much to discount every category of “expert” mentioned in the first paragraph.  How do you know said trading “mentors” or “teachers” ever made consistent profits on their own in the financial markets?  The same applies to friends or third-hand acquaintances.  Have you ever looked at their tax returns?  Have you ever seen brokerage statements or trade confirmations?  The same may be said of “great traders” written about in books.  Jesse Livermore, in fact, went bankrupt in 1934 and was suspended by the CBOT.  I know of a couple ex-floor traders who blew up accounts and chose to go into teaching.

What motives have these people to lie, you may ask.  Two of them are money, fame, fame, and money.  Who exactly can you trust when trying to measure up against these?

If testimony to financial market success in on trial then reasonable doubt certainly abounds with regard to its veracity.