a theory about good vs. bad traders

[alistera]

if anything, the past couple years showed just how unsophisticated some of the "sophisticated" players actually were

You state some of the players, no all players except the rarest of the rare, there are 8bn people on the planet, the going number is that the planet can support 500mn naturally, that means 95% of everything you come across is an "interpretation" without a 'whole', except the number is much higher because those 7.5bn are taking a proportion of the 500mn meaning the actually knowledge base is fractional.

Unlike everyone else you will come across I know people in that fractional where the facts actually sit undiluted, I like milling around these forums because it provides insight in to the other 99% plus of the world, so here's the one piece of information you need to understand.

In life the world works on a money valuation system, there are underlying reasons but that's for another day, via that money valuation system it can never reconcile back to 100%, truly sophisticated investors use the time valuation system where money will flow automatically once you value your time and ideally everyone else's time.

All the fintech, methodologies, systems, platforms, architecture I use are based on time valuation, now when you try and use money valuation via time valuation system initially it will work because this is how the markets are designed, and then fail spectacularly because that is how the markets are designed hence very few people ever get allowed access to time valuation platforms.

The problem with money valuation is simply that there is always someone bigger, more capital, more time, more leverage, that can create a capitulation event, that does not happen with time valuation, only that today the time duration is many times longer than in the past decades, money valuation is a pyramid and if you are not at the top at some point the house of cards crashes, as three banks just found out their truly believing they were at the top of that pyramid.

All banks, all HNW, all VHNW, and even most UHNW work on money valuation terms, it works at only one level, time valuation works across all returns levels you just pick how much effort you want to expend, adjust your lifestyle to your workload, and the rest does itself via algos, money valuation has no 'sophistication' but it is what runs the world, hence everyone sees it as nirvana pretending to be sophisticated until the 'next best thing' comes along!

 

[Tradess0610]

In the late 90s and early 2000s I enjoyed playing bullet chess, had a ok rating for my goals. There was a mean, nasty trash talking kid who loved killing us on Chessdotcom. He became World Champ! I guess being nasty and trash talking about “being the greatest” did not affect Nak.

There is an exception to every rule

 

[Tradess0610]

Anyway, the only thing that comes to my mind is that ignorant, arrogant people by nature would have worse odds to be good traders, because they would not be able to learn from their mistakes, or would not tweak the strategy, etc - as much as individuals who have the opposite charasteristics..

 

[pinetboltz]

Anyway, the only thing that comes to my mind is that ignorant, arrogant people by nature would have worse odds to be good traders, because they would not be able to learn from their mistakes, or would not tweak the strategy, etc - as much as individuals who have the opposite charasteristics..

point taken, though i still think there's a difference between 'arrogance' and pretentiousness

as in someone can seem arrogant to others, but actually have the skills to back it up
vs. pretentiousness would be when behind they mimic the real deal in superficial ways without having the real sauce

eg. arrogance - PhD quant making multimillions from crypto trading then flashing the cash and bragging about how smart/ commercial they are

eg. pretentiousness - fleece/vest-wearing type throwing around buzzwords on the phone during starbucks run, before going back to the office to find out their positions have been liquidated

not saying arrogance doesn't have its downsides in the long run & sometimes the initial 'arrogance' crosses into 'pretentiousness', but in a competitive market where the average trader is not that good, i think some of the psychological incentive for the pretentious behavior is probably so that they can signal to others how good/ special of a trader they are

perversely, i think by focusing on social signals etc, the pretentious types miss out further on the actual trading signals and get exposed for their lack of real skills, sometimes in an unexpectedly abrupt way as seen in recent times

based on personal recollection, when i met them (not to be named), i came away feeling like they were projecting a carefully cultivated image of what "risk takers in a successful trading outfit" should be like

as in, it felt quite like they were play-acting, in an almost slightly exaggerated way, that somehow pervaded the whole culture too

i'll trust my gut instincts on such ppl from now on

 

[Tradess0610]

as in someone can seem arrogant to others, but actually have the skills to back it up
vs. pretentiousness would be when behind they mimic the real deal in superficial ways without having the real sauce

The arrogant trader can have the best strategy and pshycological skills today.
But next year, when the markets change, he might be overconfident and relying too much on his skills. He is more likely to be ignorant of the change. In the long run he would be worse off.

... i think some of the psychological incentive for the pretentious behavior is probably so that they can signal to others how good/ special of a trader they are

Irrelevant, when we are talking about trading skills. As I said, you can of course be profitable today and be arrogant&ignorant. But that might not be the case over long term. Only relevant, if he is making money in teaching or from social media as well. But we have this behaviour in any industry - also the managers of top companies drive expensive cars and wear expensive clothes. It is signaling "I am good at what I do and am making money", but it does not tell me this individual will be good when markets change.

 

[2rosy]

Good understanding of proportions