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

I have posted numerous links to 'case studies'. The key premise (and ...once again...I loop back to the title) relates to the viability of trading as a trade vs other 'trades'.

The amount of evidence is overwhelming. Simply Google 'probability of success as day trader. I assumed that (as a trading forum) most viewers were aware of the odds.

As an example, here is a study from 2011 (note the game is much harder now - see my first post).

http://www.nasaa.org/wp-content/uploads/2011/11/Day_Trading_Analysis.pdf

The key thing is.

1 Most losing traders are delusional/use emotions and do not accept objective numbers/facts as it flies in the face of their world-view/belief-systems/brainwashing. (Witness some of the posts on this forum).
2. A common mistake is not to adjust wins for risk, time/money invested and opportunity cost. Also, longevity. What if you have an 'edge' that lasts just 2 years? A CPA has an edge in the form of a marketable skill that will last him until retirement.

As an example, a trader spends 10 years and £200k and makes £200k profit over one year in 2018 (but his 'edge' was short-lived and lasted for 2018 only). Logically, he would have effectively made a loss allowing for time and opportunity cost. However, such a 'trader' would gleefully post on such forums how he had found his Holy Grail and how he had arrived at the end of a spiritual journey and his genius level attainment. In other words, even those fraction of a percent who succeed (despite all the factors I have outlined in previous posts), very often have not succeeded at all if you dig deeper.

Here is an interesting analysis. If someone pays me, I can do a similar one comparing the return on investment of day trading vs a plumber. In my opinion almost all day traders would be better off going to trade school. Of course, there are also other options that they would be better off in and not just trade school.

 
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Anyone who puts that much effort into verbal diarrhea is usually hiding the fact they have no point. If trading is not for you, then

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Another case in point ...emotions and name calling. No logic or discourse. However, I sense 'capitulation.'

Also, the poster is confirming my premise without realizing it.
 
cityboy12 said:
Another case in point ...emotions and name calling. No logic or discourse. However, I sense 'capitulation.'

Also, the poster is confirming my premise without realizing it.
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What you think is caputilation is in reality using common sense. I gave up "discussing" with you already some time ago. Other with common sense will follow and do the same. The only poster at your level is Zenostiffler. With him you are in good company.

Each time I read postings from people like you I see David Goodboy AKA Marketsurfer appear again.
 
cityboy12 said:
Another case in point ...emotions and name calling. No logic or discourse. However, I sense 'capitulation.'

Also, the poster is confirming my premise without realizing it.
More...

I am confirming that if you decide it is better to not trade than trade, then don't trade. Something you could have easily decided for yourself without the hand holding.
 
cityboy12 said:
Please research this yourself.
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LOL. I am doubt you ever actually worked outside of back office if you believe that Nav Sarao actually caused the flash crash. You preoccupation with Steve Cohen is not indicative of an adult understanding of the industry either. Or, for that matter, that fact that you believe anything printed in the Daily Mail. :P

Back to the topic, here is the breakup in a bullet-point form:
  • Do people in professional risk-taking seats play the same game as the retail traders? No, not really. It's a very different mindset that centers on the research process (anywhere, from global macro to HFT)
  • Do all professional risk takers cheat all the time? No, not really. It's an illusion perpetuated by the media - there aren't enough opportunities to cheat to make a living.
  • Is the finance industry rather predatory towards the smaller guy? Yup, it sure is. So real estate (much worse, actually), yet people eagerly participate.
  • Can a retail trader play the same game as the pros if he so desires? Sure, the actual barriers to entry are pretty low.
  • Do they need specialized knowledge to do so? Yes, for sure. That is the key problem - a retail trader has better ROC expectation due to lower capacity requirements, but rarely has the skill to use that to his advantage.
  • Could you be a successful hobbyist trader? Yes, and that is probably the most favorable outcome for a retail participant
 
El OchoCinco said:
I am confirming that if you decide it is better to not trade than trade, then don't trade. Something you could have easily decided for yourself without the hand holding.
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You attacked me instead of the premise (...please refer to the title again...I am losing count of how often I have to do this). The premise is not whether I want to trade or decide not to but whether trading itself is a bad trade (for a conventional retail day-trading client).
 
Why does anyone care to engage in a theoretical philisophical bullshit exercise of whether trading itself is a bad trade.

If someone is losing money cannot trade it is a bad trade (you). If someone is making money and can do it (not you in this case), it is a good trade for them.

If you want to do it, do, if not....don't. No successful trader wastes time coalescing the vapors of man's essence which is why no one is bothering to respond to your demand for proof.

We all have a side bet going as to how long we can string you along with this bullshit so just keep going as you are not even close to the lowest guess.
 
sle said:
LOL. I am doubt you ever actually worked outside of back office if you believe that Nav Sarao actually caused the flash crash. You preoccupation with Steve Cohen is not indicative of an adult understanding of the industry either. Or, for that matter, that fact that you believe anything printed in the Daily Mail. :p

Back to the topic, here is the breakup in a bullet-point form:
  • Do people in professional risk-taking seats play the same game as the retail traders? No, not really. It's a very different mindset that centers on the research process (anywhere, from global macro to HFT. I would argue that they 'play a game' which is more in their favour. Businesses have to make a profit and, in general, the professional risk takers would be out of a job or their company would shut down very very quickly if they took the same risks at the same risk/reward ratio as a retail client. I can imagine 100 day traders from ET setting up a hedge fund next month. Each given $10m to trade. How long would the business last? Instead, professional risk takers make a profit precisely because they do not trade as retail clients do (I have outlined some examples - insider dealing and spoofing not being the only ones)
  • Do all professional risk takers cheat all the time? No, not really. It's an illusion perpetuated by the media - there aren't enough opportunities to cheat to make a living.
I was not referring to 'cheating' per se. Rather, the more successful ones appear not to be play by the same rule book as the 'hunted.' Some of the strategies they use may seem 'unfair' or 'unethical' by an average person (which is why they never occur to him). Many are illegal. I have given many examples of this. HFT, for example, is not illegal but it is, in essence, front-running orders (unfair? unethical?). Somebody, who 'plays be conventional rules' would lose against a HFT fund.
  • Is the finance industry rather predatory towards the smaller guy? Yup, it sure is. So real estate (much worse, actually), yet people eagerly participate.
I totally agree. That was my original premise.
  • Can a retail trader play the same game as the pros if he so desires? Sure, the actual barriers to entry are pretty low.
No they are not. I disagree. To set up even a small hedge fund necessitates compliance, regulatory and legal fees. Also, to hire and retain analysts and professionals requires capital which automatically excludes the majority of the population of day traders. Also, once you have some purchasing power you generally have access to better research, to better deals and obtain better access (remember the film Big Short and the ISDA the small guys were trying to obtain? And they had millions under management). Don't forget also that you can buy politicians/ secure your cartel if you are big enough. As an example, none of the big investment banks went bankrupt post financial crisis...in fact, they lobbied for and received both government printed money and received taxpayer money from the tax donkeys at the bottom of the social pyramid in the US. Afterwards, even received bonuses. A retail trader, unfortunately, has to go bankrupt as he does not have that level of access. Maybe because he has been brainwashed into thinking capitalism exists in America?
  • Do they need specialized knowledge to do so? Yes, for sure. That is the key problem - a retail trader has better ROC expectation due to lower capacity requirements, but rarely has the skill to use that to his advantage.
Once again, I disagree. A retail trader has almost no leverage with regard to direct access to market, access to advanced software/analysis or research or reducing his commissions/fees. He is a minow swimming in a sea of sharks and whales. You seem to forget that having more capital than your competition can be an 'edge' in and of itself (but, of course,it is one factor in a multi-variate analysis of success). Knowledge capital is also a form of capital. I would agree, however, that in some certain very limited circumstances a retail trader might have an edge in the form of knowledge capital (for example, in a niche area of the market)
  • Could you be a successful hobbyist trader? Yes, and that is probably the most favorable outcome for a retail participant
If you read my posts. I agree that, statistically, a very very tiny percentage of traders succeed. Of these, a smaller percentage do so consistently and over a long period of time. Of these, perhaps an even smaller percentage would be better off than a tradesman.

The premise is that, there are other better 'trades' out there if you are truly a trader and apply a pure trader's mindset to the game. In other words, a real trader would not day trade like a retail client he would 'trade' other trades.
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