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

cityboy12 said:
If you were a trader looking at your screens and you took a position on AAPL with a 0.2% chance of success and a downside risk of 50% before your stop kicked in would you not look for other trades with, say a 60% chance of success and more limited downside risk with similar rewards?
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Ofcourse i would.

But, can i make joke ?
This is purely just for fun :

,,Hey - Im trading AAPL with a 0.2% chance of success and a downside risk of 50%

- Who da fook is this guy ?"

Like what is his RRR ? o_O
( ... wind in background... ... )

except by that 0.2 you mean 20% and in that case it's time for me to sleep :)
 
The scenario described retail trading vs opportunity cost....not AAPL. I thought my post was clear enough. So I will make it even clearer (..no wind in the background..sorry).

You might risk $100k dollars and spend 8 years studying for a 0.2% chance of making as much as a doctor as a retail trader. Unlikely to compound as 99.8% chance you will not have the surplus cash.

On the other hand you could risk $50k and spend 8 years studying with nearly 100% chance of making as much as a doctor. In fact...you will be a doctor. With compound investing...you will be almost guaranteed to become a millionaire.
 
cityboy12 said:
You missed the point...I will explain it very clearly and simply for you.

1. Trade one - a fraction of a 1% of chance of success vs 50,000 hours of time, risk capital of $100k and 99.8% of loss of capital (additional risk factors such as regulatory risk, scams and structural change also outlined)
2. Trade two - 95% success rate vs 28,000 hours of time, risk capital $50,000. 99% chance of becoming a millionaire by 50.

Assuming a similar work ethic and diligence...the second trade (medical school in a non-US country) is better than trade one. I can write a whole list of alternative trades but wanted to illustrate a point.

If you were a trader looking at your screens and you took a position on AAPL with a 0.2% chance of success and a downside risk of 50% before your stop kicked in would you not look for other trades with, say a 60% chance of success and more limited downside risk with similar rewards? (Of course, this is not exactly the same as there are different time frames etc).

In other words...'is trading itself a bad trade?'
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It does not seem you are asking a question, but looking for re-enforcement of thoughts. You are implying that only 1 % of people who allocate capital make money, and that is quite absurd. You could of placed your money almost anywhere in the past 9 years and made good money. I think you are angry it is not working out for you, being open minded will help you out, understand why YOU haven't made money instead of seeking approval in having a losing mentality... Your mindset is the problem, not the industry
 
I am not angry or emotional at all (if you look at my posts I am just the opposite)...just looking for empirical evidence which I might have missed.

And to be honest, I made a lot of money as a broker - commissions. If my clients lost or made money I would still get paid. Better risk/reward than trading my own account. Just a different 'trade'. No emotions involved. Most of the people I met who were successful were on the other side of the trade to a retail investor. Actually, many were on the other side of a 'trade' to their employees.

Portfolio management was all about sales and building AUM. In fact, it was a rare case where clients would make money in the long-term (but it wasn't trading - it was investing).
 
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cityboy12 said:
The scenario described retail trading vs opportunity cost....not AAPL. I thought my post was clear enough. So I will make it even clearer (..no wind in the background..sorry).

You might risk $100k dollars and spend 8 years studying for a 0.2% chance of making as much as a doctor as a retail trader. Unlikely to compound as 99.8% chance you will not have the surplus cash.

On the other hand you could risk $50k and spend 8 years studying with nearly 100% chance of making as much as a doctor. In fact...you will be a doctor. With compound investing...you will be almost guaranteed to become a millionaire.
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Now i get it , thanks.

Hmnn if in the end, all that matters in life

- meaningful work and meaningful relationships,

then why to worry about how much it will cost or what the chances are.

By all means neccessary, with no regrets :
 
I like Jocko...

But please don't put me in the 'regrets' box. Here is quote from a true legend...

'If you have been playing poker for half an hour and you still don't know who the patsy is, you're the patsy'. W Buffet

It gives you an insight into his mind and how similar my mindset is also.

1 He knows about games and odds
2 He wants to be on the right side of the odds/games (I like how he buys monopolies or near-monopolies)
3 He is not an idealist or naive despite his folksy 'poker-face'.
4 He knows that in business there is often the predator and the prey (the arbitrage/edge is what can separate the two).
5 The winner/predator often needs the prey or the naive player to make money. Without him he will not feed.

I look at his success and see how often he has done that historically. Not the BS people believe which turns them into prey like 'work hard' or 'follow your passion' or 'believe in magic or visions'. I have found many successful predators but no successful prey as of yet.
 
cityboy12 said:
Without realizing you proved my point.

1. The guy you mentioned. Started as an entrepreneur/had a hard marketable skill/product then used compounding and value investing. Not a trading.
2. Paul Tudor Jones, Steven Cohen and Ed Seykota. Again you prove my point, the 'momentum trading' strategies of decades gone by no longer work (a Windows PC can do it).

Steven Cohen had a non-standard mindset and proves my point. He did not 'play the game' like everyone else did. instead he used insider information for an edge and then used good lawyers to beat the Feds while other people beneath him took the risk/fall.

You also confuse business owners (who extract knowledge capital from their employees) with traders. This is a common mistake, you have to compare like with like. A trader with a trader and not a trader with a business owner or team manager .
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So, are you saying Ed Seykota, Paul Tudor Jones and Steven Cohen no longer successful? And how do you know what strategies they are employing? It seems you are making so many false, assumptions. I know of a couple of successful traders her on Elitetrader. Just because you say retail traders cannot be successful at it, does not make it true! Believe what you want because that is your right!
 
cityboy12 said:
I like Jocko...

But please don't put me in the 'regrets' box. Here is quote from a true legend...

'If you have been playing poker for half an hour and you still don't know who the patsy is, you're the patsy'. W Buffet

It gives you an insight into his mind and how similar my mindset is also.

1 He knows about games and odds
2 He wants to be on the right side of the odds/games (I like how he buys monopolies or near-monopolies)
3 He is not an idealist or naive despite his folksy 'poker-face'.
4 He knows that in business there is often the predator and the prey (the arbitrage/edge is what can separate the two).
5 The winner/predator often needs the prey or the naive player to make money. Without him he will not feed.

I look at his success and see how often he has done that historically. Not the BS people believe which turns them into prey like 'work hard' or 'follow your passion' or 'believe in magic or visions'. I have found many successful predators but no successful prey as of yet.
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No , you got me wrong, im not putting you in regret box, all i wish for you is to succeed if youre learning, or already profitable trader.

Just a healthy debate, for me to improve my english and to stay open for new ideas.

And your question was worth attention, not like , fomo ,, should i buy APPL stock now ?! " .

Can you expand more on ,,successful predators" , ie ?
 
cityboy12 said:
...Here is quote from a true legend...

'If you have been playing poker for half an hour and you still don't know who the patsy is, you're the patsy'. W Buffet

It gives you an insight into his mind and how similar my mindset is also.
...
More...

Buffet may be a legend, but he did not originate that quote. Just to be clear there. Carry on.
 
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