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

cityboy12 said:
OK, at an airport...The point I am making is that to win you have to be on the right side of a risk/reward ratio.

I actually like the analogy given by a previous poster of the trader 'riding a jetski through a slalom.' In my world, assuming it was a race, I would try to:

1 Rent the jetski to the rider
2 Own the slalom or at least a piece of equity in it (ideally own a diversified portfolio of equity in many slaloms around the world)
4 Own a business fixing jetskis- ideally located near the slalom
5 Sell jetski riding lessons- no risk
6 Health insurance and medical care when , inevitably the jetski rider has an accident
7 Put my advertising on the jetski
8 Finance the slalom- ideally with printed or tax-payer money
9 etc

The last thing I would do is ride that darn dangerous jetski...I could sink or drown...and what would my reward be? What a moronic idea.....If I owned the slalom, having a rider hit another rider and drown (statistically probable) might actually increase my profits if I sold the rights to the incident to a TV station. No downside that I can see in that trade. I would be incentivized to get them to ride ever more dangerously.I would increase profits by running more races.

If I was Warren Buffet...I would buy every such slalom in the USA and control a monopoly...as part of a diversified portfolio.

The top traders I studied were never riding the jetski. Despite that ...a lot of retail traders look up to them and believe that they too can be as successful as they are. They never understood what made them successful was usually not riding the jetski in the first place. The 'feel good' gurus will never tell them this.
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Extreme risk aversion could be a form of psychosis, I am not sure. Attempting to monetize every aspect of life could be another. For some, riding/racing jetskis could simply be enjoyable, everyone one is wired differently and some do not put wealth acquisition as the summom bonum of life.

Many of the proposed 'occupations' or alternative businesses seem unnecessarily entangling to me.

1 Rent the jetski to the rider
Why? I don't need the money and I want it to run properly when I ride or race it. The jetski is the trading capital, not the trader. Why would I give my trading capital to some other person in hopes that they earn more money than I would. I would rather come in second, third or tenth place and have the enjoyment of the racing/trading/lifestyle.

2 Own the slalom or at least a piece of equity in it (ideally own a diversified portfolio of equity in many slaloms around the world)
The slalom is the exchange. For $15 a month I can get access to all of CMEs slalom courses, $15 for HKEX, etc., all of the slalom courses of the world are available to me for a low monthly exchange fee. I can race/trade on them whenever I want.

4 Own a business fixing jetskis- ideally located near the slalom
The jestski is the capital, not to be confused with the rider/trader. This seems like selling the dream of cheap capital to traders. Topstep Trader? Earn2Trade? Payday loans?

5 Sell jetski riding lessons- no risk
Does not seem like a 'good trade' to share my current riding skill which might only be applicable with the current race conditions. Subsequently, it would be immoral for me to sell my skills when the slalom course had changed and my riding technique became obsolete.

6 Health insurance and medical care when , inevitably the jetski rider has an accident
Become a life coach, psychologist for blown out traders? Aak. Not sure but I would assume Gamblers anonymous is free and would take care of most busted trader's needs.

7 Put my advertising on the jetski
Sounds very Trumpian, large garish sign on my capital in attempt to get more. Why advertise for more capital when you have enough for your current honest business?

8 Finance the slalom- ideally with printed or tax-payer money
Start your own successful exchange? Seems like the odds are better to become a trader.

9 etc
For myself becoming a salaried man, a worker bee employed by another is an account busting blowout margin call 'bad trade'. I understand that everyone's personality/nature is different but mine just won't permit it. Maybe I have some psychosis.

With that being said, I agree 100% with you that for most people who are undercapitalized, have insufficient time and do not have the necessary intelligence or emotional disposition attempting to earn a livelihood from being a trader is a 'bad trade'.



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Zeno. I will present my conclusions later. I agree regarding the emotional, ad hominem attacks. But I really find this thread truly fascinating and more value than you might yourself see.

Even the recent posts:

1. Steve Jobs dropped out of college - I refuted that logic with the Albert Einstein post (the event happened decades ago- times have changed, the fact that he was successful may have had no correlation with him dropping out of college, statistics prove that most successful people do not drop out of college and, in fact, often have professional and advanced degrees etc)
2. Trading is not for people 'of your type' - a similar psychological approach of 'putting people in boxes' (as I outlined in previous posts ). Also, it does not answer the premise in the title.

Applying a profit-motive and good risk/reward, the posters here have been truly wonderful information as to what motivates the 'hunted' for a 'predator' who wanted to make a profit over them. My time is limited but I am tempted to set up a case study whereby I market a risk-less (to me) profitable service or product (trading course, discretionary algo, software, psychobabble or trading 'strategy' to certain market segments) . It would probably pay off much more than a hedge fund ever would.

I would love to compare how much profit I would make selling:

1 An objectively verifiable and profitable strategy (albeit a boring one)

versus

2 A colourful, risky strategy with an engaging magic carpet ride of emotions including fear, greed, competition and joy with the promise (but not guarantee) of social capital and an ego trip should someone 'win.' This concept would involve a lot of pseudo-science and jargon and suggest that 'anyone can do it if they work hard'. An authoritative guru would have to be created along with some kind of 'secrets' or 'steps.' Blinking lights, charts and sounds on screens would add to the addictive quality of this concept. Failure would be explained by 'you are not good enough' and 'you need to train longer.'

I would love to put this together as a research project like the ones I posted on traders in Taiwan, for example.

I could empirically prove if:

1. It pays to be honest and truthful or whether...
2. It is more profitable to sell delusions and lies.

Then I would meditate for a week or so whether it is morally OK to strip the 'hunted' of their hard-earned cash and redistribute it into my pocket. It can be justified in a Darwinian sense, for example. Another justification might be that I would know how to invest/spend it better than 'the hunted'.
 
Than
They said:
Extreme risk aversion could be a form of psychosis, I am not sure. Attempting to monetize every aspect of life could be another. For some, riding/racing jetskis could simply be enjoyable, everyone one is wired differently and some do not put wealth acquisition as the summom bonum of life.

Many of the proposed 'occupations' or alternative businesses seem unnecessarily entangling to me.

1 Rent the jetski to the rider
Why? I don't need the money and I want it to run properly when I ride or race it. The jetski is the trading capital, not the trader. Why would I give my trading capital to some other person in hopes that they earn more money than I would. I would rather come in second, third or tenth place and have the enjoyment of the racing/trading/lifestyle.

2 Own the slalom or at least a piece of equity in it (ideally own a diversified portfolio of equity in many slaloms around the world)
The slalom is the exchange. For $15 a month I can get access to all of CMEs slalom courses, $15 for HKEX, etc., all of the slalom courses of the world are available to me for a low monthly exchange fee. I can race/trade on them whenever I want.

4 Own a business fixing jetskis- ideally located near the slalom
The jestski is the capital, not to be confused with the rider/trader. This seems like selling the dream of cheap capital to traders. Topstep Trader? Earn2Trade? Payday loans?

5 Sell jetski riding lessons- no risk
Does not seem like a 'good trade' to share my current riding skill which might only be applicable with the current race conditions. Subsequently, it would be immoral for me to sell my skills when the slalom course had changed and my riding technique became obsolete.

6 Health insurance and medical care when , inevitably the jetski rider has an accident
Become a life coach, psychologist for blown out traders? Aak. Not sure but I would assume Gamblers anonymous is free and would take care of most busted trader's needs.

7 Put my advertising on the jetski
Sounds very Trumpian, large garish sign on my capital in attempt to get more. Why advertise for more capital when you have enough for your current honest business?

8 Finance the slalom- ideally with printed or tax-payer money
Start your own successful exchange? Seems like the odds are better to become a trader.

9 etc
For myself becoming a salaried man, a worker bee employed by another is an account busting blowout margin call 'bad trade'. I understand that everyone's personality/nature is different but mine just won't permit it. Maybe I have some psychosis.

With that being said, I agree 100% with you that for most people who are undercapitalized, have insufficient time and do not have the necessary intelligence or emotional disposition attempting to earn a livelihood from being a trader is a 'bad trade'.



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Thank you kindly for your post. I am sure the viewers find it very informative.

I am away from my desk but some points to the above.

1. Start your exchange - assuming limited capital - but I can own a 'piece of the casino'? In fact, I bought shares in the London Stock Exchange for a few of my clients - went well. 'The casino always wins' so 'own the casino'.

2. You are 100pc correct -being a salaried employee is a very risky and awful trade in 2019 (maybe less in 1960?). I recommend professional qualifications like a CPA, law or medicine where you can have your own clients as well as work in a corporate role (either or both). Leverage.

3 Sell jetski riding lessons - morality does not hold a lot of educators back - even in academia - from selling outdated or worthless knowledge. I agree that I prefer to follow my conscience so I would not pursue that profitable avenue.

4 The jetski is not the capital per se. - it is capital only in that it is needed to ride in the race. The owner of the slalom can invited 100s of jetski riders and dictates the rules and when it takes place- he has the true leverage. Whoever wins/loses he makes money from tickets. He can decide to ban the rider.

5 Health insurance - the 'sell' is more of a play on fear. Everybody dies/gets sick. People in risky occupations are most susceptible to this tactic. 'On a long enough time horizon, the value of any investment drops to zero' - Zerohedge (from memory). Statistically, most traders would have awful retirement planning and scary prospects if they got sick. I would 'clean up' if I ever sat with them as a financial advisor.

6 Trump stopped developing a long time ago (apart from a few exceptions). He simply franchised his brand to other developers. Less risky. You can research this yourself. In fact, running for president has been a global infomercial for him and his dynasty.
 
themickey said:
I've been on ET over 10 years and I observe different levels of intelligence.
There is a thread in progress now, "Watch a prop trader swinging $100,00+ days"the OP is an ET sponsor.
The thread is up to 20 pages now and this thread typifies how many ET posters, when they don't understand something take on aggressive confrontational stances, attack first even though they are clueless rather than ask polite questions. What in effect the result produces is people who know their stuff just don't bother to contribute, well many wont.
Unfortunately social media seems to bring the great unwashed out onto the streets where they love to witness a scrap or a lynching.
I admire people who defend their knowledge, however it seems to encourage the braying hounds even more as is the case with this thread and the one I mentioned.
On weekends it's even worse, that's when the real rabble arrive.
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Play your cards right Mickey and they might take you on as a client :D
 
themickey said:
I've been on ET over 10 years and I observe different levels of intelligence.
There is a thread in progress now, "Watch a prop trader swinging $100,00+ days"the OP is an ET sponsor.
The thread is up to 20 pages now and this thread typifies how many ET posters, when they don't understand something take on aggressive confrontational stances, attack first even though they are clueless rather than ask polite questions. What in effect the result produces is people who know their stuff just don't bother to contribute, well many wont.
Unfortunately social media seems to bring the great unwashed out onto the streets where they love to witness a scrap or a lynching.
I admire people who defend their knowledge, however it seems to encourage the braying hounds even more as is the case with this thread and the one I mentioned.
On weekends it's even worse, that's when the real rabble arrive.
More...
Braying hound

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To OP: Only you know the answer. At least for yourself trading seems to be a bad trade. However, most successful people fail over and over again. But they are willing to continue taking risks. Then suddenly they hit the motherload. Jobs failed over and over then made it big with the iphone. Michael Jordan failed over and over again...

There is something to be said about persistence in adversity and hanging in there when one is up against overwhelming odds.

I get it...people want security...but one will never leave a mark in life without taking risks and being willing to hang in there through adversity.

For over 30 years I failed over and over again in a certain endeavour (not trading) then in 2006 the tide turned and the next two years were a struggle but with successes then in 2009 things took off and have been going steadily upwards and growing exponentially ever since.

Most traders are going to fail..over and over again before they reach success. Failure can stop a person or failure can motivate a person. Yes, trading is hard to learn as it takes time to learn the natural ebb and flow of the markets. However, in reality it is quite simple. Markets go up. Markets go down. Markets go sideways. A trader needs to find, develop and test strategies and tactics that suit him and that allow him to leverage what the market does NATURALLY, to increase his monetary benefits received from the markets. Most traders aren’t willing to go through the process ...they quit before the hit the motherload...hence they give up.

Investing is risky. Trend trading is risky. Daytrading is risky. Intraday trading is risky. Trading chop is risky.

But a trader will only accomplish a pittance doing little to nothing with the resources he have in his hands if he sits on those resources and does little or nothing with it.

 
I hear traders say that trading chop is real risky. It is not any more risky than trend trading if the right strategies and tactics are used. Again, there is NO NOISE in the markets. There is only movement. And different types of movement I might add. Strategies can be honed to take advantage of any kind of movement.

P.S. I done trading for the moment. I am going fishing...often there is an afternoon trend that can be traded..i won’t be in it. Gotta fish.
 
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