My first post; some observations on trading.

Quote from TimothySykes:

Wow man, you need to read some trading books, I don't even know where to begin, your conclusions are almost all off
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I take back my bow :)

Although I do read some books I prefer to use my real life experience and my observations of others around me to form opinions.

After all I am assuming that's how some of these books you refer to were written in the first place, excluding those which are fictional of course.

abc1
 
Quote from Biog:

abc1 has started a very interesting discussion.

Here is my take from the perspective of a fulltime trader. I've been trading for 10 years (broke even first 2 years and have made at least six figures every year of the last 8 years).

The first couple years ... But over the longer run, I'm more confident in my 'ability' to generate income.
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Thank you, especially for putting forward opposite (-ish) opinion to mine with out bashing me; it's appreciated.

abc1
 
I find it offensive that you believe my livelihood and all that i have worked for is based on pure chance and that i am just one of the lucky 5 out of 100,000 people to turn heads more times than tails. The fact is that there are edges, just as you admit to in your first post, in order to take advantage of many of them requires large amounts of capital, hence the leverage that is necessary to consistently make money by either providing liquidity to the market or taking advantage of the inefficiencies of the market. The market will never be totally efficient, and in providing liquidity, or helping to make the market more efficient there is no need to flip a coin, pick a direction, or guess anything. Oppurtunities abound in all markets, with low risk of drawdown, while using much more than 4x leverage... how else would specialists or market makers consistently take money from the markets? I would agree though that from the perspective of trading retail, i was not successful, but failed miserably, many times, and it did seem as though I might as well go to the roulette wheel and bet it all on black. I see the thoughts in all of your statements, but I believe that your observations are your opinions based on what you know about the markets, which is obviously something you do not have a full grasp of.
 
Quote from sjd231:

I find it offensive that you believe my livelihood and all that i have worked for is based on pure chance and that i am just one of the lucky 5 out of 100,000 people to turn heads more times than tails. The fact is that there are edges, just as you admit to in your first post, in order to take advantage of many of them requires large amounts of capital, hence the leverage that is necessary to consistently make money by either providing liquidity to the market or taking advantage of the inefficiencies of the market. The market will never be totally efficient, and in providing liquidity, or helping to make the market more efficient there is no need to flip a coin, pick a direction, or guess anything. Oppurtunities abound in all markets, with low risk of drawdown, while using much more than 4x leverage... how else would specialists or market makers consistently take money from the markets? I would agree though that from the perspective of trading retail, i was not successful, but failed miserably, many times, and it did seem as though I might as well go to the roulette wheel and bet it all on black. I see the thoughts in all of your statements, but I believe that your observations are your opinions based on what you know about the markets, which is obviously something you do not have a full grasp of.
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I agree with alot of your post. To be fair I doubt anyone has a full grasp of the market. Far too much going on for one person to know that.

What I am suggesting is that yes once the trade is on there is too much out of most people's control (stops/limits aside) for reasons I have listed above.

However I do acknowledge that as opposed to flipping a coin, there is a lot of information available which can help to make a decision to place a trade. So I appreciate that it's more than flipping a coin and that there is a decent amount of knowledge that should really be absorbed before trading; just that outcome wise and from a philosophical point of view the results of both mirror each other.

This is because you either win or lose (head or tail.) Obviously you can bet (invest) different amounts on each outcome which can change the results you have more one way or the other.

Generally speaking, while one person can use all the tools available to them to open a position is it therefore skill when 1000s of others are determining the movement of the stock/index etc from the time you hold it to the time you release it.

An informed gamble I am happy with but skill seems too big a word for trading in my eyes.

abc1
 
Quote from FXTraderWill:

Dude you're a dumbass if you've spent a year lurking on ET and concluding this. In the time you spent that year lurking on ET, I spent the time learning how to read human psychology and how to find predictable patterns - I also was taught how to trade some real edges. They're not that hard to find if you watch price. You're stupid and you haven't watched price and you would rather "be right" with your beliefs you learned from ET than make money with beliefs learned from experience with price. It would be a service to the world that you also spend the next year of your life not posting on ET, and perhaps a service to you to stop reading it, since it's a waste of time. Why would you read ET continuously if you're not a trader interested in learning how to trade or a an experienced trader going here out of boredom? If you spent the last year of your life also intending to learn how to trade, you wasted it. I can define for you 10 real "edges" that work consistently, requiring varying degrees of judgement and intuition - from none at all and fully automatable to requiring lots of experience and even emotional feel for the market (a good trader can feel his own emotions and use that as an indicator of how the crowd feels and trade in the right direction, or use the feel of the other traders around him if in a trading room - this alone is kind of an edge, heh). Some edges were just plain "obvious" to me and I don't think I'm special and have a magical gift for seeing market edges... I just watch price and sometimes it's really fucking obvious).

Why am I not RAKING money in?
Because I don't have good enough emotional control skills, which is what I"m working on. I gamble, revenge trade, get frustrated, take shots, trade in sub-optimal states of mind, fight stocks, and even trade AGAINST what I KNOW is the right thing to do. When I don't do those things, I constantly make new records. I make huge donations though and lose money doing dumb shit, like trading news, and get in my own way generally.

Despite this, I gross (unfortunately my comm structure is a ripoff and I don't net that much) $10-20k/month + consistently, within 9 months of trading, over tens of thousands of trades - yes tens of thousands, huge sample sizes. I have adopted to many different market conditions and seen constant change in my 9 months - but I've been able to stay on top and more and more one step ahead because it's not that complicated - price is not complicated - it's human emotion and intention and reaction to uncertainty and even sometimes anxiety and fear and greed. It's a cool game. THe variables don't change, and the market always gives clues, because price doesn't move from some computer program that generates random walks - it moves from human emotional patterns, which constantly repeat, thus there are always "edges" to exploit them - every real trader on this board who read your post knows this, but people don't even bother to try to explain to people as stupid as you what is actually a very simple concept.
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No FXTrader, you're the one who should not post on ET if you can't be polite.
 
Quote from abc1:

Think of it like this.

Call the toss of a coin 1 years worth of trading. A head is an up year, a tail a down year.

Now say 100,000 people toss the coin 10 times. You would expect 5 of each head and tails for the majority. At the extremes are 10 up years or 10 down years, both of which are very unlikely combinations.

Also, every toin coss costs money (for comission, living cost etc)so skew the results accordingly.

I hope you can see the point I am trying to make.

abc1
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Your point is that trading results(profits) will be distributed in a random bell curve pattern.....that in the 2nd and 3rd standard deviations are the ones making money....( would fit the idea that only 5% of people make money).

I could agree with that....The difference is that that 5% percent group of winners are not random ,in fact most of them stay in the tails and the rest of the traders ,old and new, get chopped up between the mean and 1 standard deviation.

What is your deviation?
 
Trading is ten percent luck,
Twenty percent skill
Fifteen percent concentrated power of will,
Five percent pleasure,
Fifty percent pain
And a 100% reason to remember it’s a game!


Thanks to Fort Minor for this one!
 
Quote from jdizzle:

No FXTrader, you're the one who should not post on ET if you can't be polite.
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I was rude because the OP comes across to me as the worst kind of dumbass - the kind of dumbass who thinks he's really smart. He's just speaking ignorantly. He has no concept of the natural inefficiency of the market, and is unwilling to believe that price naturally gives clues to where it's going - he doesn't belive that, with thousands of participans all making decisions for their own reasons, the net effect on price can actually consisently be predictible. It just so clearly is to me and all the [experienced] traders I know, and the fact that the OP is standing there screaming that price alone isn't enough information to make money off of.... well, it makes him stupid... because he's not even open to that point of view. If he said "I think price doesn't give enough information to extract money from the markets consistently, but if someone can show me that their results are so probabalistically unlikely that their consistency is a 10 sigma event then I may be willing to reconsider... but it just seems too chaotic to me," I would explain why he is wrong, offer plenty of indisputable proof that would be about as close to scientifically valid as can offered - hell, I'd even teach the guy about my strategies (if you search through my posts, I'm always willing to help people and share my experiences and opinions). But the dude here is just standing there telling people the sky is orange when it's not. He's talking about the composition of the atmosphere, the way light reflects, and despite being shown photos of a blue sky and being made to look up, he still insists it's blue. He's reasonably articulate and more expressive than the average man, so I had to call him out on being a dumbass because an unsuspecting reader who knows little about trading might become convinced he's someone worth listening to.

abc: I'm only being "rude" and "insulting" because you seem to have a totally closed mind. I'm as positive markets are inefficient (and will always be) as I am sure the sky is blue, and I'd be willing to teach you why if you want to listen... I can prove it mathematically, I can teach you about edges that are just so common sensical that there is no need for any theoretical academic disputes about whether or not they are "edges" because the concepts are based on simple, timeless, repeating human behavioral patterns.

I'm so sure of this because I trade different stocks every day, and I trade purely off of price - I don't know shit about most the companies I trade, and I don't have to. Frequently I don't even know the sector of a stock and still make money in it. Anyway... markets are more inefficient if people believe they're efficient, so believe what you want... but to those who think money can't consistently be made with low risk and insurance against devastating losses from black swan evens, well dases - you're 100% wrong.
 
I will not argue that you never know where a trade will end up, that's where the "skill" lies. The entry is the easy part, getting out is what makes trading so difficult. I will never be able to predict outcomes, no one will. I can however "trade" the markets. Contrary to what many people here believe, "trading" is not buying a stock, putting a stop on it and hoping it doesn't get hit. Trading is playing the game that you describe in your posts. Sure, there is a gamble, but i test the waters, hit the other sides bids and offers, find the depth of the market, and "trade". There are not stop losses, and if you have a bunch of money, you can average down or put yor contingency hedge on and trade from red to green. Contrary to popular belief, professionals average in, not doing so would be picking a direction. So stating that trading is not a skill is stating that it can't be learned, and you are dead wrong on that one. The uncertainty part, picking a direction, you got dialed. Hopefully you'll lose some of your other opinions and exploit what the market presents.
 
Quote from FXTraderWill:

I was rude because the OP comes across to me as the worst kind of dumbass - the kind of dumbass who thinks he's really smart. He's just speaking ignorantly. He has no concept of the natural inefficiency of the market, and is unwilling to believe that price naturally gives clues to where it's going - he doesn't belive that, with thousands of participans all making decisions for their own reasons, the net effect on price can actually consisently be predictible. It just so clearly is to me and all the [experienced] traders I know, and the fact that the OP is standing there screaming that price alone isn't enough information to make money off of.... well, it makes him stupid... because he's not even open to that point of view. If he said "I think price doesn't give enough information to extract money from the markets consistently, but if someone can show me that their results are so probabalistically unlikely that their consistency is a 10 sigma event then I may be willing to reconsider... but it just seems too chaotic to me," I would explain why he is wrong, offer plenty of indisputable proof that would be about as close to scientifically valid as can offered - hell, I'd even teach the guy about my strategies (if you search through my posts, I'm always willing to help people and share my experiences and opinions). But the dude here is just standing there telling people the sky is orange when it's not. He's talking about the composition of the atmosphere, the way light reflects, and despite being shown photos of a blue sky and being made to look up, he still insists it's blue. He's reasonably articulate and more expressive than the average man, so I had to call him out on being a dumbass because an unsuspecting reader who knows little about trading might become convinced he's someone worth listening to.

abc: I'm only being "rude" and "insulting" because you seem to have a totally closed mind. I'm as positive markets are inefficient (and will always be) as I am sure the sky is blue, and I'd be willing to teach you why if you want to listen... I can prove it mathematically, I can teach you about edges that are just so common sensical that there is no need for any theoretical academic disputes about whether or not they are "edges" because the concepts are based on simple, timeless, repeating human behavioral patterns.

I'm so sure of this because I trade different stocks every day, and I trade purely off of price - I don't know shit about most the companies I trade, and I don't have to. Frequently I don't even know the sector of a stock and still make money in it. Anyway... markets are more inefficient if people believe they're efficient, so believe what you want... but to those who think money can't consistently be made with low risk and insurance against devastating losses from black swan evens, well dases - you're 100% wrong.
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Okay but dumbass is a little harsh. Perhaps ignorant or naive (in the literal way; not as a slam).

You use volume too I'm assuming.

Be interested to know what you consider your edge(s). Don't have to be specific but a general idea would be interesting to hear.
 
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