daytrader loses it all.
- Thread starter S2007S
- Start date
Man, am I happy i started to trade immediately after the 2000 crash....
First thing i learned was risk control..... Thank god for that!
7 years after that first big lesson and it's starting to come out nice!
First thing i learned was risk control..... Thank god for that!
7 years after that first big lesson and it's starting to come out nice!
Darwin said so.
Those people did not have the presence of mind that they could "lose". If you cannot hold on to your winnings, you really never won.
When optimism runs rampant, that's when you start building your short positions.
edit: even more poignant: if optimism runs a length of time unchecked, the free market will check itself.
Quote from kiwi_trader:
Look.
Its always sad when a gambler loses their money. And worse when they take their family or friends with them
My boss in 1987 maxed out his credit cards and borrowed (fortunately a little) money from his mum. This refocussed him on his work.
My former boss leading up to 2000 tripled his money over a couple of years. Then he cut it to a quarter. Now he's refocussed on his work.
Money management, stop losses, and a learning process meant that I didn't do nearly as well in those times. But now I've learnt so I no longer have a boss. I'm a trader, my broker (IB) does well out of me, but I don't mind because they facilitate my business at a very low price.
I tend to think that I'm taking money of lawyers, dentists and doctors on a day by day basis ... because they're smart and thus believe that the markets will be easy for them. By taking a few thou from them I refocus them on their real work.
We provide liquidity. We provide price discovery. We get paid for doing this well. Gamblers get into the frothy tops of bull markets, get very excited for a bit and then pay the price. Its sad but at least they don't usually get thrown in debtors prison for their foolishness. You can't keep people like this out of the markets because you'd be denying them the chance to learn and ultimately do well. The more extreme sob stories are a price of capitalism (and like all bloody streets, sell more newspapers).
I actually feel a lot more sorry for the folk that try very hard to learn to be traders and never succeed. Its almost enough to make one join the training game - but not quite.
Best post in months on this board.
Damn, son. You just threw out a blanket that covered 70% of the Asian population.
A rhetorical question. What is the difference between gambling and investment? Risk and reward are interlinked in both systems. At least in most gambling systems one knows precisely what the risk-reward and expectation are to high precision. Whereas in investing we irrationally rely on subjective and dubious data off the corporate books and the continued stability of extremely complex and interdependent external factors (and now heavy global contagion). No one on the planet can control nor predict with any certainty any of these things. So how do we rationally form our "investment bets". Also bear in mind, there is tremendous opportunity for manipulation or "coincidental" co-dependent reactions in the global markets. Case in point: Greenspan farts and instantly hundreds of billions of global net worth evaporate like a willo-the-wisp. Reverberations are felt for weeks or months and market physchology is damaged and forever "touched".
Therefor I would seek no moral satisfaction in feeling good that I was smarter than this foolish Asian day-trader who bet the farm and lost. The truth is it effects more than this man's family and friends. His entire community will now have learned a negative lesson and will forever be afraid to take ANY risk - whether reasonable or irresponsible. His country will have one less productive farm to produce product and provide tax revenue. Someone earned a commission and a vig on the other side. Someone is now long on discounted positions that someone else underwrote by graciously taking the burden of his loss off his shoulders.
Observation, all we ever do in trading is trade one risk for one other kind of risk and one potential reward curve for another.
What is clear to me after this last market drop is that there is completely insufficient risk premium built into both equities and derivatives. It's nearly impossible to count on anything anymore as being short term stable (e.g. basic currency, interest rates, inflation, productivity, foreign policies etc.). But what are the alternatives? Low yielding 10 year treasuries that can be eaten alive by the inflation moth? Does anyone else feel like an extorted hamster placed in a maze for entertainment with no exit?
Sure, it is true that a large number of Asians are gamblers. But that is true of Americans as well. We Americans gamble every few years with who we elect. We trust incompetents to manage the trillions of dollars of our country's entire net worth; every penny of it. The interesting and ironic twist here is that it is Asia who is gambling heavily on the USA's ability to repay its long term debt. Given our current track record I suspect we will be getting that back at a discount when the triple 000 of inflation, currency debasement and trade imbalance all comes up as a paper I-O-U.
The new trade space is in economic extortion and forcing other country's to continue to extend credit or risk getting nothing back on what they have already extended. That's an interesting game of poker. We could keep this game going indefinitely unless someone gets made and wants to cash in their chips early. It could get nasty if somone decides to change the game to Russian Roulette with all chambers loaded...
In the interim - everyone keep patriotically investing in your future and the new global detente of economic codependency and produce more debt to export...
TS
Therefor I would seek no moral satisfaction in feeling good that I was smarter than this foolish Asian day-trader who bet the farm and lost. The truth is it effects more than this man's family and friends. His entire community will now have learned a negative lesson and will forever be afraid to take ANY risk - whether reasonable or irresponsible. His country will have one less productive farm to produce product and provide tax revenue. Someone earned a commission and a vig on the other side. Someone is now long on discounted positions that someone else underwrote by graciously taking the burden of his loss off his shoulders.
Observation, all we ever do in trading is trade one risk for one other kind of risk and one potential reward curve for another.
What is clear to me after this last market drop is that there is completely insufficient risk premium built into both equities and derivatives. It's nearly impossible to count on anything anymore as being short term stable (e.g. basic currency, interest rates, inflation, productivity, foreign policies etc.). But what are the alternatives? Low yielding 10 year treasuries that can be eaten alive by the inflation moth? Does anyone else feel like an extorted hamster placed in a maze for entertainment with no exit?
Sure, it is true that a large number of Asians are gamblers. But that is true of Americans as well. We Americans gamble every few years with who we elect. We trust incompetents to manage the trillions of dollars of our country's entire net worth; every penny of it. The interesting and ironic twist here is that it is Asia who is gambling heavily on the USA's ability to repay its long term debt. Given our current track record I suspect we will be getting that back at a discount when the triple 000 of inflation, currency debasement and trade imbalance all comes up as a paper I-O-U.
The new trade space is in economic extortion and forcing other country's to continue to extend credit or risk getting nothing back on what they have already extended. That's an interesting game of poker. We could keep this game going indefinitely unless someone gets made and wants to cash in their chips early. It could get nasty if somone decides to change the game to Russian Roulette with all chambers loaded...
In the interim - everyone keep patriotically investing in your future and the new global detente of economic codependency and produce more debt to export...
TS