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

tickmagnet said:
The idea that you need large capital to trade is total BS , why would you want risk big to gain small , it should be the other way around.
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absolutely agree with that :
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But the dividend part... Nahh :)

Or yes, that's right, but those are 2 diffrenet aproaches presented as one in your comment,

please correct me , if im wrong (?).
 
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Schweiz...your response doesn't make sense. There can be advantages like attracting capital, emotional rewards (like an ego boost) from showing a P&L.

If someone is 'for real' they should have no issue with showing you the objective numbers. I am not talking about their trading strategy (that can be a trade secret) but their risk adjusted P&L.

This is the basis of 'The Scientific Method' - I have replicated this below. Otherwise we can believe in anything. Here are examples:

1. Magic exists, however, I cannot prove it to you as true sorcerors will never show you their sorcery as they don't want to waste their time as they are busy casting flying spells and conjuring up palaces in the clouds.
2. Aliens exist, however, I have never seen one and there is no strong evidence in the whole of history of them having existed but I know somebody who said he has seen one (but he has not shown me evidence as he is too busy).
3. I am a magical sorceror but cannot display my sorcery to you because I am so great and mighty. However, I can teach you how to work magic. If you pay me more, your magic may get better (you have never seen my magic but can take my word for it). After you pay me, if the magic does not work ...it is all your fault. However, you can pay me for more training and if it doesn't work it is still your fault.
4. You cannot work magical spells because you do no believe or have enough faith. I cannot show you my magic because that implies you do not belive or trust me.


'The scientific method is an empirical method of knowledge acquisition, which has characterized the development of natural science since at least the 17th century, involving careful observation, which includes rigorous skepticism about what one observes, given that cognitive assumptions about how the world works influence how one interprets a percept; formulating hypotheses, via induction, based on such observations; experimental testing and measurement of deductions drawn from the hypotheses; and refinement of the hypotheses based on the experimental findings. These are principles of the scientific method, as opposed to a definitive series of steps applicable to all scientific enterprises.'
 
cityboy12 said:
This forum is a fantastic opportunity to post audited P&Ls and propose mentoring others.
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To what end? Posting an audited 1040 here to prove to you that it can be accomplished? There are a couple threads on here where traders were posting their IB Portfolio Analyst output with audited (by the clearing firm) performance. Other threads with other front ends posting PNL. Perhaps you should read those threads.

Someone provides performance figures -> ostensibly you agree that they're legitimate -> you propose that individual will mentor your sorry ass?

Yes, a fantastic opportunity, for an oxygen thief.

Go fvck yourself.
 
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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George Mallory was once asked why he wanted to climb Everest, his reply..."Because it's there."

I guess there's no stopping some people buddy.
 
Why do you think I am 'sorry'? Sounds like an emotional response and not a search for truth. I have evidence to the contrary.

Logically, I am sure some of these individuals have a profit motive/self-interest? If I gain a skill that is worth $x over y years then I (and many others) can invest £z in the knowledge/time to return $x.

This isn't a collective hive mind of successful traders who automatically reject everyone who does not breathe their rarified air.... but rather individuals of different ages. sexes and backgrounds. Some of these individuals should see the personal benefit of mentoring or coaching.

However, my overall argument is different...it is that (should these individuals exist - and I think a tiny few do, in fact, exist) the $z will have a better pay-off over y years in other investments in terms of time and money with a better risk/reward ratio. In other words, a 'different trade.'
 
iccenuol said:
George Mallory was once asked why he wanted to climb Everest, his reply..."Because it's there."

I guess there's no stopping some people buddy.
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2:41

JFK says something simillar, chills each time. The vision and hard choices. Count me in.

And yes there always be those that don't understand us, but it matters not.

 
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I just saw the film.

A lot of emotions, vision and hope without much effort on my side. Easy to sell to the masses. I like feelings as they make me temporarily feel good just like music and chocolate does.

Unfortunately, facts don't care about feelings.

I tried paying my electricity bill with emotions, visions and promises once and it didn't work. When evaluating business models and trading I try my best not to use feelings.
 
cityboy12 said:
I just saw the film.

A lot of emotions, vision and hope without much effort on my side. Easy to sell to the masses. I like feelings as they make me temporarily feel good just like music and chocolate does.

Unfortunately, facts don't care about feelings.

I tried paying my electricity bill with emotions, visions and promises once and it didn't work. When evaluating business models and trading I try my best not to use feelings.
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Are you seeking advice? It's not clear.
 
Is Trading Itself a Bad Trade?

Well everyone would like to sail a boat to Fiji or wherever. It requires a lot of skills, a certain mind set, & unconditional persistence to make it from a novice learning how to sail to piloting a course across the ocean & leaving port with you at the helm as the captain of your ship with nothing to rely other than your navigation charts and problem solving skills.

For those that set sail on that dream voyage there was nothing that could have stopped them.
 
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