A Daytrader's Story
- Thread starter nkhoi
- Start date
Sometimes people just have to learn for themselves. Learning from someone else's experience just isn't the same thing.
One thing I will say, maybe you can say the Daytrade rules were not to blame for this guy's losses, but they sure didn't prevent it. I have to agree with qdz2 that the only effect the daytrade rules can be seen to have had on this guy was negative, they compelled him to maintain a $25,000 account. Which put him in precisely the frame of mind that freealways laments about his friend: trading too much and too large. This guy felt the need to trade bigger to make up for the $25,000 he was constantly borrowing to keep his account up to the minimum. If he could have been left to freely trade a more modest account, maybe just maybe he would have taken it a bit slower and learned by starting small.
One thing I will say, maybe you can say the Daytrade rules were not to blame for this guy's losses, but they sure didn't prevent it. I have to agree with qdz2 that the only effect the daytrade rules can be seen to have had on this guy was negative, they compelled him to maintain a $25,000 account. Which put him in precisely the frame of mind that freealways laments about his friend: trading too much and too large. This guy felt the need to trade bigger to make up for the $25,000 he was constantly borrowing to keep his account up to the minimum. If he could have been left to freely trade a more modest account, maybe just maybe he would have taken it a bit slower and learned by starting small.
Hi,
I would like to tell a story about proprietary trading at an investment bank. As pointed out by trader99 in another thread, employees at investment banks do get a salary plus bonus to trade:
Once upon a time, there were two proprietary trading groups at an investment bank. The first group consisted of a bunch of quants. They performed statistical arbitrage for the firm using data mining techniques, probability theory, technical analysis, ect. The ultimate goal is to produce a money making machine for program trading. Try as they might, they were unable to come up with a winning formula. After suffering huge losses for two years, the whole team were laid off.
The second trading group consisted of one person only. He did neither technical analysis nor fundamental analysis. He did not have a secretary either, only one PC with one monitor, no fancy stuff !! He only performed phone analysis: most of his relatives and friends were bankers. However, he was able to earn millions of dollars for the bank every year.
It is up to you to decide whether it is fact or fiction.
I would like to tell a story about proprietary trading at an investment bank. As pointed out by trader99 in another thread, employees at investment banks do get a salary plus bonus to trade:
Once upon a time, there were two proprietary trading groups at an investment bank. The first group consisted of a bunch of quants. They performed statistical arbitrage for the firm using data mining techniques, probability theory, technical analysis, ect. The ultimate goal is to produce a money making machine for program trading. Try as they might, they were unable to come up with a winning formula. After suffering huge losses for two years, the whole team were laid off.
The second trading group consisted of one person only. He did neither technical analysis nor fundamental analysis. He did not have a secretary either, only one PC with one monitor, no fancy stuff !! He only performed phone analysis: most of his relatives and friends were bankers. However, he was able to earn millions of dollars for the bank every year.
It is up to you to decide whether it is fact or fiction.
It's you that is an idiot. I know personnaly cases like that, one for example who lost 1 million. Happily he could support 1 million. The sum in itself means nothing. It is the proportion that counts.
The problem is some people believe in the fairy tale that if one really will he can, that it is just a psychological problem. It is not just a psychological problem it is a also a knowledge and preparation problem. Psychology problem comes after. If you don't gather all the things necessary then you can make the best efforts during actions they will be incoherent and useless.
When people paper trade, if they do not play like an actor, that is doing as if it is real, then of course it will seem to work although it doesn't because they will decide after the facts. If you papertrade seriously, as if it is real, then you should see the problem honestly. But if you papertrade losely because you are too impatient to thrill the real thing then you risk deception. The time necessary will depend on the background and personality of the person. And as I said people who trade sucessfully for several months or even years (it depends on trading style) shouldn't think they have succeded by their talent and not by chance if they have not make statistical tests because of Levy law chance has persistency.
And finally not everybody can become a doctor (for example me ) so recognise that perhaps you can't become a trader.
The problem is some people believe in the fairy tale that if one really will he can, that it is just a psychological problem. It is not just a psychological problem it is a also a knowledge and preparation problem. Psychology problem comes after. If you don't gather all the things necessary then you can make the best efforts during actions they will be incoherent and useless.
When people paper trade, if they do not play like an actor, that is doing as if it is real, then of course it will seem to work although it doesn't because they will decide after the facts. If you papertrade seriously, as if it is real, then you should see the problem honestly. But if you papertrade losely because you are too impatient to thrill the real thing then you risk deception. The time necessary will depend on the background and personality of the person. And as I said people who trade sucessfully for several months or even years (it depends on trading style) shouldn't think they have succeded by their talent and not by chance if they have not make statistical tests because of Levy law chance has persistency.
And finally not everybody can become a doctor (for example me
) so recognise that perhaps you can't become a trader.harry, did you happen to read the story?
he said he had $5000 left. so, proportionally, he wasted away 97% of his capital.
and whatsmore, the total dollar figure DOES count. see, if he wasted $10,000, even though that might have represented 99% of his equity, it's not THAT big a deal, because it's quite easy to earn that money again....
earning $160,000, for the vast majority of people, is somewhat more complicated.
therefore, all in all, he was a grand idiot.
he said he had $5000 left. so, proportionally, he wasted away 97% of his capital.
and whatsmore, the total dollar figure DOES count. see, if he wasted $10,000, even though that might have represented 99% of his equity, it's not THAT big a deal, because it's quite easy to earn that money again....
earning $160,000, for the vast majority of people, is somewhat more complicated.
therefore, all in all, he was a grand idiot.
Harry you should set up your tax-deductable foundation as a charity to feed and shelter wiped out daytraders.
I read the story, but it is like stock market, it happens by random walk, which is a derivative process so he doesn't see where it will lead him. If he had known sure he wouldn't engage in that process.
I must consult an Attorney before
Do I belong to the "us" set or am I a singleton set alone in the infinite Universe