Talon,
Just to make sure I am not mis-understood: I think you are an intelligent person, you are doing good work here, and you are sharing valuable knowlegge. I am running late to a dinner, but I want to highlight some points:
1. Funds as a group lose: That is the basis of my post. They lose, even if the make the research. So doing research is not a guarantee for profits. Why would then a lonely entrant to the field be expected to have higher chances? Some of that, you point out below, but I am not sure the typical average new trader understands it unless he has the experience, the energy and the intelligence you have. If that is the case he is either participating now in this discussion , or simply pouring over his analyses and exploiting the many pieces of insights that other write somewhere in here.
2. An advantage the the little guy has is his small size. I agree with this. It makes him agile, and he can trade on smaller time frames, but he needs to be skilled. If he is on a wrong side he can get cleaned quickly.
3. You are right on not to follow what othwers follows. Making money is a "lonely men" business. There is a need for a trader to think, be original, and carve a niche.
I was more directing my post to the the individual traders who might under-estimate what he is getting into, and not to fall into the assumption: I will work and then I will make money. The funds highly educated, but yet loser analyst's, is proof that hard work and proper research, from a process point of view, while it might be necessary, is not sufficient to make money!
I also agree with you on the number of highly qualified scientists who do not make money. Markets require from a person to shift on a dime if he is wrong, in the sense of recognizing a change fast, deciding quickly, and have no heart to the money already lost. Most scientists were trained to change only after they have done an analysis, and they may have psychological limitations because of lack of experience in situations where they lost and were proven wrong by markets. In the latter case, they have to deal with the biais from previous analysis, the money lost and not yet realized, and their ego. These guys rely on analysis as a corner stone, and they may not let go easily even if they were to blow out their accounts. If I were to hire these guys, I wuld make sure not to allow them to trade.
The best of the analysts however can be a devastating money machine to the opposition, because of their superior knowledge like best analysts, and the quickness and lack of heart like the best risk-calculating gamblers.
Best wishes!
Quote from talontrading:
1. I respectfully disagree completely with this point. You need to find the post I made (I think on this thread) about how you can win at trading because you aren't playing the same game as everyone else... that someone doesn't necessarily care of I buy here and sell 1.00 higher.
Also... these funds can't beat the market as a group because as a group they ARE the market. Think long and hard about the irony of that... few people understand the significance of that statement.
Mutual funds aren't that smart and most of them don't trade. Hedge funds do, but a lot of funds are poorly managed, etc. So don't be intimidated. Some of the smartest minds in the world do play in this business but I have known plenty of engineers / physicists, etc who understand everything anyone can know about the math, but they still can't trade.
The biggest answer here is size. You can do things with your $5M account and make a good return that are impossible even with $100M... and at $500M and above the size becomes a serious problem.
Yes, the individual has a chance. No, he doesn't if he follows the kinds of ideas that, in my experience, are popular on the internet. Planning to make a living trading S&P futures when it touches this or that band and the CSI or RSI is above this level blah blah blah. No chance at all. If this describes your trading experience to date and you aren't having success, then take a step back and think about what you're doing.
2. See #1
3. Ridiculous statement. I would never sell an idea that has an edge. At best, if I was a non professional, I would take my idea to someone and have them trade it for a share of profits. Finding a great idea available for 3,000 is ridiculous... doesn't happen.
Also... if your argument is your original 1 and 2, then 3 is impossible by definition, no?
I think trading is a lot harder than most of these forums make it out to be. I think your chances of success are a lot smaller than most people would have you believe... but it IS possible.... and it's possible if you find good ideas, have adequate capital, and develop the behavior that allows you to implement these ideas successfully. Figure it will cost you $50,000 and 2-4 years to figure it all out out, on average.
