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

speedo said:
I use three time frames, from top down in terms of importance. Each plays a role in defining my setups.
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I understand, I imagine this plays a big part in reducing the noise on your smaller timeframe chart and an extra confirmation for the setup.

Makes sense and thanks.
 
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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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
You don't understand the difference between a trader and a fund manager. Jet Ski mechanic or rental
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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As you don't know the difference between a trader or the nature of trading and managing a fund, renting or repairing jet ski's might suit you.
 
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cityboy12 said:
That was in the 1940s (also he had a high IQ) As another example, the Baby Boomer generation of the 1960s left school with a high school diploma and bought a cheap property. Often had a job for life and a defined benefit pension. You cannot use the same paradigm of success in 2019 as they did in 1960.

Welcome to 2019. A number of reasons (including progressive credentialism, global competition for jobs, shortage of quality jobs due to outsourcing, federally created asset bubble, student loan bubble, the Baby Boomers pyramiding off of the young etc) means that you need a much much higher level of skill and credentials than the past. Some sectors of financial services are mature markets now with high levels of competition. The mistake people make is that they point at people from the 1980s or 1990s as examples (in your case 1940s) ...the market was completely different then. George Soros established his fund where there were almost no funds around in competition. This is 2019. A lot of the 'market wizards' who people quote as legends established their operations/careers in far less competitive times and would fail today (in fact, a lot have).

Read the job adverts for top hedge funds again and my post. I never said that it was impossible, I just said that the odds of success are greatly diminished if you do not fit a profile to the point that it isn't a good trade.
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Last time I checked, Steve Job dropped out of college.
 
cityboy12 said:
I have read some of your posts in other threads and value your opinion immensely (particularly what you advised regarding prop shops in other threads).

However, I would argue you are of the Baby Boomer generation and your experiences were in a different time/easier environment. When you traded, the internet was still in its infancy or not around even. I would argue that you would find the game much more competitive now for a new entrant. What worked for you then is unlikely to work for you in 2019. You will see by the job ads I posted as to what level of skill funds ask for.

An example of this was a post I read on ET of a guy who was successful in 2006 in a prop environment. He gave all sorts of advice as to what worked for him. However, his advice became less and less applicable due to structural changes in the industry and, in fact, the prop model has all but ended (apart from selling training or making money from overnight financing). It did not happen overnight but happened slowly. What worked for him 10 years ago, does not work now and could be quite dangerous to your net worth. You will find a lot of people giving outdated advice from less competitive times (a lot of mentors and gurus fall into that category).

Try speaking to a top hedge fund with your MBA and Fortran skills today. Very difficult. Actually, even your NYU MBA could be regarded as elite to an extent. I did a quick Google search and fees are $100k plus. Probably you paid a lot less, in real terms, when you did it back then (there has been a student loan bubble since then). Even so, I would argue, it would still not be enough today, in my opinion, unless you had a very very solid quant and programming background as well as a high level of intelligence. Sales, however, is more forgiving.

My overall point being that a lot of viewers here are totally unaware of the level of competition at the top. They are often misled as to what is possible. They think a $7500 course and a 'I can work harder than anyone' attitude will suffice. Then, just like the film Limitless...they will get noticed, raise capital and set up a fund. It might have done even a few years ago, but not now. Or rather, the chance have decreased significantly since then to make it highly improbable. They have to be aware of just how high a level you have to be to have even a good chance to play at the table and who the competition are.

The best way is to study the bios of the top players. You will see elite degrees, high level presentation skills and usually very rich family backgrounds and connections. Also, a certain racial, social and height bias. Once in a while somebody gets there who is different, but that is very rare

On a positive note....once you truly see the game you can play it this way

1. Get qualified - if money is tight and you can't afford a six figure degree- CFA CAIA FRM etc
2. Get connected - the the right geographical nodes
3. Present yourself well and learn to sell, negotiate etc. Learn to conform to certain social classes
4. Work for the right people
5. Get some quant and programming skills

It will increase your chances.
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It will increase your chances only if this whole mindset mirrors yourself.
The fact that a lot of viewers here do not know against whom they will compete does not preserve them from being successful from day one. To maintain this success will require long work, study, adjusting oneself to the market flow. In any event, the market, regulated market, will take care of ones failure and success almost in proportion with ego dominator and devotion.
You can not drive a car if you think that all drivers are Formula One pilots with the intention to put you in car accident, you can not ski if you think about all who died while skiing.
Your approach is probably very helpful for people of your type.
But there are those who are taking risks, starting with little and going up. Look on the competitions that CME groups are organizing - it is happening over and over.
 
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.
More...


You’re doing a great job at arguing for your limitations. Given the title of your thread, you are indeed right.

Congrats on saving time and money on something that is not for you.

You have a plan, now go work your plan!
 
zenostiffler said:
I agree that Citiboy12 has some useful things to say. And some of the other intelligent and moderate people here. But the quality as a whole on ET is very low indeed.....
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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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