Only 1 in 10,000 make it? Seems like a stretch but point taken.
How do the BIG BOYS trade?
- Thread starter saxon22
- Start date
Only 1 in 10,000 make it? Seems like a stretch but point taken.
Provocative thesis :
Are "investors" outperforming "traders" ?...
Are "investors" outperforming "traders" ?...
Read confessions of street addict by Cramer (stop laughing for a minute) pretend it is a story of somebody else (not Sykes, again stop laughing).
In his book you will see how many hours that guy put in reading just 10k's, hours on the phone with CEO's, anaylsts, other writers,etc. In spite of his countless hours working, he had Berkowitz and his wife to help him. Almost proof that one man working 20 hours a day is still outgunned when it comes to the market.
In his book you will see how many hours that guy put in reading just 10k's, hours on the phone with CEO's, anaylsts, other writers,etc. In spite of his countless hours working, he had Berkowitz and his wife to help him. Almost proof that one man working 20 hours a day is still outgunned when it comes to the market.
Masses "should" use ETF's, we've been teaching that for years. No need to "make less" or "lose more" due to excessive fees for funds that don't keep up with SPY or DIA, IMO.
My guess is less than 10% of the hedge funds would be called "good." Since there is little to no reporting/disclosure, it's hard to tell.
I'm not "dismissing" - just offering my viewpoints. Some employee plans only allow for "funds" - like my wife, who is a teacher (great insurance, worth keeping her working just for that, LOL). Her retirement fund reprsentative won't even show his face at my house...she has few choices, gets terrible results, and the guy listened to our radio show for years talking about ETF's.
In this day and age I honestly think it's easy enough for people to handle most, maybe not all, of their personal investments...just my opinion, of course.
All the best,
Don
Quote from ASusilovic:
Provocative thesis :
Are "investors" outperforming "traders" ?...
Investors do outperform traders
Its laughable to say that only 1-2 out of 100 or 1-2 out of 20,000 traders can make money in the long run.
Dollar cost average long into the indexes and hold, and your sucess becomes 100%.
Sucess only drops to 1-2% if you're impulsively trading each and everyday trying to market time a choppy noisy market.
Quote from ASusilovic:
Provocative thesis :
Are "investors" outperforming "traders" ?...
Taken as a serious question.
All I can go by is the hundreds of traders that I've known, from various exchanges, institutions, other firms, and of course Bright Trading.
IMO, there can be and should be a crossover for professional, serious traders. For example, many in our family make money trading, of course...and we "could" invest in virtually any fund or product available. What do we do? The same thing we advise our traders do, become our own "portfolio managers."
Our immediate family has one great advantage as well... my brother. We put the major part of our "investment" capital into our Family LLC, and we use the Goldman Sachs RegT leverage of 6.67 to one to trade/invest (similar meanings in this context) in various strategies. My brother does most of the trading (I'm the first to admit that he's a better trader than I), and keeps it on the (relative) conservative scale...but we have taken a few (well thought out) "shots" over the years (Selling 10,000 GM puts might be put into that categor, but paid off extremely well). We do a lot of Pairs trading, and if you think about the numbers. If we try to get 6% per year on XXX, we can actually get 36% with the Goldman leverage, which we have done, not every year of course (that would be nice), but we do pretty well (again, thanks primarily to my brother).
By being able to monitor the trades/investments on a day by day basis, and being able to adjust/modify/pull out of, etc. at a very low cost, we are able to effectively be our own hedge fund managers.
We rarely "invest" in outside ventures...thinking that little else will give us the rate of return we are getting on the longer term money.
I know that many of our traders do things in a similar manner.
FWIW,
Don
<i>"After trying countless indicators and more methods than I care to remember, I was thinking, how do the big guys trade?"</i>
First we need to define whom the big boys are you refer to. I assume you mean big, successful retail traders. That is what most here aspire to be, does no good to figure out what floor traders do unless you intend to hit the floor. Does no good to learn how hedge fund managers assimilate inside information if we have no chance to replicate such.
With that in mind, I know a few big-money retail traders. They use different tools but simple tools, not a lot of stuff on their charts. They learn how those tools behave thru all market conditions, all three distinct phases: up, down and sideways trends.
They are patient, not anxious to trade for the sake of keeping busy, just anxious to see their high-odds setup whatever that might be.
They trade when profitable to do so, avoid taking risk otherwise.
Two of the biggest players I know took roughly ten years to reach their present state. Always remember that the market doesn't give two (hoo)ts what our timelines and deadlines for performance may be. There are no shortcuts, no secret recipes for instant success.
That's why our profession has unlimited earning potential. The barrier of entry to trading is sea level flat, but the barrier to consistent success is Denali high.
There is a difference between those two.
First we need to define whom the big boys are you refer to. I assume you mean big, successful retail traders. That is what most here aspire to be, does no good to figure out what floor traders do unless you intend to hit the floor. Does no good to learn how hedge fund managers assimilate inside information if we have no chance to replicate such.
With that in mind, I know a few big-money retail traders. They use different tools but simple tools, not a lot of stuff on their charts. They learn how those tools behave thru all market conditions, all three distinct phases: up, down and sideways trends.
They are patient, not anxious to trade for the sake of keeping busy, just anxious to see their high-odds setup whatever that might be.
They trade when profitable to do so, avoid taking risk otherwise.
Two of the biggest players I know took roughly ten years to reach their present state. Always remember that the market doesn't give two (hoo)ts what our timelines and deadlines for performance may be. There are no shortcuts, no secret recipes for instant success.
That's why our profession has unlimited earning potential. The barrier of entry to trading is sea level flat, but the barrier to consistent success is Denali high.
There is a difference between those two.
Well, how about this approach. Try thinking like the big boys/girls do. Trading is a game of numbers and the psychology of the players.
Do not try to out think them, just place your thought process as if you were in "their" shoes when observing a 5 min es chart. If price does this or that you can assume with a high degree of probability (ODDS) what the MAJORITY of the players will do.
Your job is to be one step ahead of the bigs. Your job is to anticipate in advance what they will do.Your job is not to chase their moves because if you do you usually find you will get filled just as the run is going to retrace enough to blow you out........then take off again. That my friend hurts, HA
Your job is to understand their FEAR or GREED as price does what price will do, if you are chasing.....you are NOT anticipating. OK, how do you anticipate what they will do? The answer will come after a lot of screen time and a shitload of small losers. keep the losers small and fight another day........it will come, it will come.
Do not try to out think them, just place your thought process as if you were in "their" shoes when observing a 5 min es chart. If price does this or that you can assume with a high degree of probability (ODDS) what the MAJORITY of the players will do.
Your job is to be one step ahead of the bigs. Your job is to anticipate in advance what they will do.Your job is not to chase their moves because if you do you usually find you will get filled just as the run is going to retrace enough to blow you out........then take off again. That my friend hurts, HA
Your job is to understand their FEAR or GREED as price does what price will do, if you are chasing.....you are NOT anticipating. OK, how do you anticipate what they will do? The answer will come after a lot of screen time and a shitload of small losers. keep the losers small and fight another day........it will come, it will come.