Is Trading Itself a Bad Trade? I Analyzed the Industry- Prove Me Wrong

cityboy12 said:
Bone (or Spreadprofessor - I noticed you are marketing your services)...I also noticed that you charge $7500 for teaching people to trade. This is for a full package of 100 hours of webinars and 12 months of mentoring.

Can I ask you, if you are that successful, why you are taking on clients on a non-performance fee basis? Also, why you are taking on clients at all and not attracting outside capital (particularly as you have an institutional background)? Do you provide your clients with an audited P&L?
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Uh oh!
 
cityboy12 said:
Bear with me on this one... Ultimately, as traders we are looking for risk/reward, managing our resources (including finite time) and risk... and making a profit.

I have working both as a stockbroker, portfolio manager, in sales and also within the brokerage industry on behalf of platform on a journey of discovery which took a number of years. I found

1. Fraudulent educators (behaving much like carnival barkers or snake oil salesmen).
2. Arcades/prop shops (those that are still around) essentially pyramiding off of their traders (desk fees, commissions) as their business model.
3. Market makers (ahem..bucket-shops) whose business model is incentivized by you losing money.
4. Transfer of risk onto 'staff' members (self-employment is not employment unless you own equity in the company) and a promise of earnings does not pay the bills and is a risk-less promise to the person making it.
5. Big well-resourced HFT funds with huge advantages- essentially, cartels or monopolies within their spaces.
6. Aggressives sales practices - often defrauding the elderly, naive and weak.
7 Stock price manipulators (pink sheets, AIM anyone?)
8 Gambling addiction - destroying lives, relationships and net worths - some people need help.
9 Structural changes in the industry - including constant regulatory change
10 Automation - roboadvice and AI reducing the need for human trading (it is not 2009 but 2019 , traders are now programmers).
11 Less and less alpha- witness the decline in the HF industry.
12 Psychopathic managers - finance seems to attract them.
13 Indebted students being taken advantage of by employers

I could go on...but the biggest statistic is the very very low chance of success (depending on which study you read, less than a fraction of 1% and, even there, you will probably make less money than a teacher or policeman). Don't forget that ROI means that you invest resources (including the precious commodity of your time) with an anticipation of reward. Investing in trade school certifications will give you a higher ROI over time at lower risk (particularly if you save early and use point 3 below).

I applied analytical tools like the Carver Matrix or Game Theory then I researched/ looked at options like...

1. Own the house - become a market maker or retail broker. But the regulations (such as capital adequacy) have 'gamed out' the new entrants and protected the cartel. Increasing changes away from commission to fee models and transparency.
2. Use other people's money (heads we win, tails you lose). People forget that hedge fund managers don't pay out when performance is negative, they just reap the rewards when/if it is. Regulations also a barrier. However, usually you are undercapitalized and can't compete. A start-up hedge fund managing millions can make you less than a good tradesman. Less and less alpha.
3. Choose another investment game - the power of compounding ? (Remember Buffet's bet anyone?) Wealth management (using low cost ETFs etc)
4. Get a skill and charge a fee- I now have a fee-based business and my income grows steadily. Ultimately, unlimited upside and limited downside.
5. Get evil - create a training school for prospective traders, set up an offshore FX shop, fleece your 'employees',etc
6 etc

I went with 3 & 4 with 2 kicking in in a year or two (specialising in very niche areas of the markets) once I have solid cashflow elsewhere.

I remember the lyrics of a song ...'Suppose they gave a war and no-one came..'.? Isn't trading about analyzing the game itself?

Prove me wrong guys...am I missing something?
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Hello cityboy12,

Ignore these guys here at ET. They are influential, but they bullshit alot sometimes.

You offered some good stuff think about. Thanks
 
cityboy12 said:
Read the posts...I never failed because I was on the 'right side of the trade' e.g. as a stockbroker or a portfolio manager. For more detail please read past posts.If clients made or lost money I always made money.

No price drivers...sorry to burst your bubble.
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Seems like some stockbrokers go bust..some trading firms go bust...some portfolio managers go bust...seems like I faintly remember such things...ROFLMAO

PS. now price drivers....well that is a horse of a different color...they are guaranteed...they just disappear for a while and then return back even more colorful....
 
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cityboy12 said:
Thanks.

By the way, if anyone else from the 5000 or so views agrees in principle (...I may be wrong on some things) please post here.

Also, please contribute to the thread with your experiences and case studies. There are a few vocal haters who base their posts on emotions and name calling and not facts but I suspect that there are many in the silent majority who might share similar opinions.
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OK YOU ARE WRONG...good enough?

PS. Probably not...
 
Day trading is hard and many traders do fail at it because:

They are lazy entitled babies who think there is a shortcut to mastering a skill.

They are trying to day trade from their other job's office and get completely distracted. If I have other business going on I shut the screens off as I know you cannot trade distracted. Very few dedicate all day to the craft, they think they can do it part time with little respect and make money. They are fucktarded.

Many have no actual skill in analyzing charts and rely on indicators as a magic tool to tell them when to buy and sell and get chopped to shit.

They have no discipline to sit there day in and day out and focus. They blame the market for their lack of discipline.

Extremely poor money management skills and end up blowing out their piker account.

They research and pay for other people's systems instead of developing their own.

They trade the wrong instrument for their skill, knowledge and risk tolerance.

If they fail a few times they try to validate their failure by claiming it cannot be done and bitch and moan rather than work harder.

If it were easy everyone would be doing it. Most fail because of reasons above and they never correct their mistakes. Failure breeds failure.

Studies on day trading are bullshit that can be detroyed by anyone with even Statistics 101 course/background.

If you rely on a study of day trading to make a claim, you are proving to the rest of us why you fail because you fall under many of the categories above.
 
cityboy12 said:
I would argue that, to profit financially, however, and pay the bills you have to trade but trade in the right way...find trades with the right risk/reward ratio ...and do it consistently. This requires an understanding of your own emotions (and those of others).
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1.Trade right way consistently....true..AND nothing truer has ever been said on ET

2. Trade with right risk/reward...oops that one (the concept ..that is) can be thrown in the air like a tin can and shot with a 22 rifle

3. Emotions...mine yes...yours or anyone elses I could care less...
 
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