95% of traders fail???
- Thread starter oddiduro
- Start date
point well made. I think you are right when saying that people draw different conclusions from the markets but I still think its right to assert that information is distributed evenly and that markets are efficient. What information one reads that is publicly availabe and what conclusion one draws is up to each on individually. To pick up your example: In the supermarket people are lining up equally at all cashiers. So, where to line up now with the expectation to be passing one certain chasier quicker than another? So, information is available to everyone , but to the blind. But conclusions are drawn differently. One person believes that a grandma in front of her takes more time than other people. Someone else focuses on what is in the shopping bag that might hold up the cashier because the price of a certain product may be unknown and need to be investigated. I think its a neat example that you, Neutrino brought up.
Hope you can agree at least with this point ;-)
Hope you can agree at least with this point ;-)
Focus on 5% who succeed. For new comers you can take all this negativity or look for developing an insight.
To be successful trader you need a very strong ego drive. The market becomes a personal challenge to be mastered.
If you have that you will survive the initial phase of trial and error and disappointment. It becomes a ego challenge to figure out a profitable method.
Ego drive also ensures that you become an independent trader and develop your own trading method and not depend on advisory services, gurus, chat rooms, message boards and others stock recommendations etc.
Strong ego traders are willing to take responsibility for their actions and not blame market or tools for their failure.
Only if you have strong ego you will survive drawdowns and persist. trading insight will come as a result of that.
Ego drive also ensures that once you are successful you will continue to build on it and improve your method. The ego-driven individual will not be happy until he has mastered profitable trading.
Having a mentor will also help you because that person has travelled the same path and can quicken your process.
Much of trading insight is about understanding that the market is not controllable but your trading mix is. Your trading mix is-
what time frame to trade
what market to trade
what trading instrument to use
what risk to take
how much leverage to use
what methods to use
To be successful trader you need a very strong ego drive. The market becomes a personal challenge to be mastered.
If you have that you will survive the initial phase of trial and error and disappointment. It becomes a ego challenge to figure out a profitable method.
Ego drive also ensures that you become an independent trader and develop your own trading method and not depend on advisory services, gurus, chat rooms, message boards and others stock recommendations etc.
Strong ego traders are willing to take responsibility for their actions and not blame market or tools for their failure.
Only if you have strong ego you will survive drawdowns and persist. trading insight will come as a result of that.
Ego drive also ensures that once you are successful you will continue to build on it and improve your method. The ego-driven individual will not be happy until he has mastered profitable trading.
Having a mentor will also help you because that person has travelled the same path and can quicken your process.
Much of trading insight is about understanding that the market is not controllable but your trading mix is. Your trading mix is-
what time frame to trade
what market to trade
what trading instrument to use
what risk to take
how much leverage to use
what methods to use
Great points!
I will definitely sign up for T-REX's mentor journal.
I am somewhat surprised that you and your colleagues have never heard of them, given that they collectively manage well over $20 billion in assets, and are well known to pretty much every professional in the hedge fund industry.
As for "truly traded on technical terms, only" - you asked for just one person who had made money "trading systems" over the long run, and did not mention "technical terms only", so I answered the question as originally posed. However, if you are asking whether any purely technical traders have made it, both John Henry and Bill Dunn trade entirely technical systems, and both manage over $1 billion and have a >20 year track record.
As for publicly available audited performance, hedge funds are not publicly traded, most are offshore, and there are heavy regulatory restrictions on advertising performance. However, John Henry's fund performance is available on www.jwh.com, and the disclosure document (http://www.jwh.com/pdf/disclosure.pdf) contains a certification of performance from Deloitte & Touche. For Dunn Capital, I can't find a website but you can contact them at the address below and ask them if they have audited performance records available:
Dunn Capital Management
309 E OSCEOLA STREET SUITE 208
STUART, FL 34994
(561) 286-4777
You can also get performance figures from hedge fund performance tracking firms like www.marhedge.com, www.vanhedge.com, www.barclaygrp.com and www.autumngold.com.
In any case, it is highly unlikely they would have been in business for 20-30 years, and be managing over $1 billion each, unless they delivered performance that satisfied their investors.
seems we define technical trading differently. The hedge funds (some of which you mentioned are actually no hedge funds but regulated alternative asset class funds, or managed futures funds) at John W henry & Company, for instance, are not traded on a technical basis. They are traded on the basis of a system. But who does not employ systems these days. However most system at JWH are not set up on technical terms but rather on fundamental analysis that has been quantified and programmed into a computer model.
See also quote taken off JWH&Comp.´s website: "Disciplined Investment Approach: All JWH investment programs use a nonpredictive, systematic approach that identifies long-term price trends in global markets."
If they traded technical systems how would they be able to identify/place bets on long-term price trends? This is what I argue the whole time against: That technical analysis is not a valid predictor of future price trends. And I am sure that JWH and all other big-shots you mentioned share this conviction.
By the way, those mentioned by you are by no means the great guys you claim they are. The performance of their managed futures accounts is everything else than top shot over the past 5-10 years. Additionally the guys DONT make billions as some people claimed they make. JWH Funds in total have 1.9 billion in assets under management. That would be 1/10 of the size of one of the large fidelity funds. Even if the contribution for management would be larger than for an average mutual fund, they still need to be divided amongst the partners and other added costs for managing such fund.
Such guys were often among the elite of trading divisions of large I-Banks and then opened their own funds. But they do not make by far as much money as the top prop trading guys at Goldman or the like. If you had ever worked in a larger I-Bank you would know the people talk about others all the time. If there is a big swinging dick around and leaves, half a year later he or she is forgotten. That is how the street is like.
So, please do not assume that because you have an investment in any of those funds or because you had an interview or even have worked in asset management that every one in Sales and Trading of all I-Banks worldwide must know about the guys you mentioned. Working in fixed income, on a nominal value basis we execute more cash bonds and credit derivatives in the interbank market in one day than any of those guys trades in two or three months. There is one dedicated trading department that services hedge funds ,only. We serice central banks, all kinds of other publicly traded funds, special funds (such as pension funds), public and private banks, brokers, industrials, and large individual investors.
So, those guys you mentioned are not God and not even gods. Lets play the ball low. I would not even invest in JWH funds as their low performance is anything else than worth the high risk.
See also quote taken off JWH&Comp.´s website: "Disciplined Investment Approach: All JWH investment programs use a nonpredictive, systematic approach that identifies long-term price trends in global markets."
If they traded technical systems how would they be able to identify/place bets on long-term price trends? This is what I argue the whole time against: That technical analysis is not a valid predictor of future price trends. And I am sure that JWH and all other big-shots you mentioned share this conviction.
By the way, those mentioned by you are by no means the great guys you claim they are. The performance of their managed futures accounts is everything else than top shot over the past 5-10 years. Additionally the guys DONT make billions as some people claimed they make. JWH Funds in total have 1.9 billion in assets under management. That would be 1/10 of the size of one of the large fidelity funds. Even if the contribution for management would be larger than for an average mutual fund, they still need to be divided amongst the partners and other added costs for managing such fund.
Such guys were often among the elite of trading divisions of large I-Banks and then opened their own funds. But they do not make by far as much money as the top prop trading guys at Goldman or the like. If you had ever worked in a larger I-Bank you would know the people talk about others all the time. If there is a big swinging dick around and leaves, half a year later he or she is forgotten. That is how the street is like.
So, please do not assume that because you have an investment in any of those funds or because you had an interview or even have worked in asset management that every one in Sales and Trading of all I-Banks worldwide must know about the guys you mentioned. Working in fixed income, on a nominal value basis we execute more cash bonds and credit derivatives in the interbank market in one day than any of those guys trades in two or three months. There is one dedicated trading department that services hedge funds ,only. We serice central banks, all kinds of other publicly traded funds, special funds (such as pension funds), public and private banks, brokers, industrials, and large individual investors.
So, those guys you mentioned are not God and not even gods. Lets play the ball low. I would not even invest in JWH funds as their low performance is anything else than worth the high risk.
95% of traders have the ability to call the market about 50% of the time and they can see opportunities but don't know how to go about capitalizing on those opportunities.
that is why they fail.
that is why they fail.