The rich and the right...

[qxr1011]

But if you're elite enough, let the bag holders worry about that.

wrong

if one is elite enough his most worries should uncontrollable risk, and there are plenty of it in bitcoin trading

 

[Surprise]

Instead, we have people arguing how crypto is or is not not Windows 98.

Windows 95

 

[ironchef]

This is going to be a rant. If you don't like rants, flee now. Also, I am sure it's TLDR

Its been a recurrent theme on this forum lately. Arguments go in circles and eventually devolve into a few boys trading insults. Nobody cares about the truth, it's about being right. For fuck sake, this is not a political debate.We should only care about making money. That is what differentiates a trader from the sales people, trading advice sellers, consultants, talking heads and so on. The buck stops with us. A few interesting examples to discuss are right below.

Part 1. "You are all idiots"

Trading is a business of making mistakes and learning from these mistakes. Accept what just happened ("oops, that was expensive"), draw the right conclusions and move one. If you have missed the bitcoin rally, don't go around trying to explain to other how they are wrong and will be losing all of it shortly. Bitcoin rally is the reality, there is little you can do about it (well, maybe you can find Satoshi Nakamoto, stick a soldering iron up his arse and force him to dump his million coins to cause a massive down spiral in price). If you still have a strong bearish view and have the appropriate risk tolerance, figure out a way to short it. If you have changed your mind, buy it.

There is huge value in figuring out why your view was, apparently, wrong at least up to this point. Ideally, that's what this forum is all about - yes, let's discuss this. But there is no value in going around insulting others just to make yourself feel better about your mistake. Case in point is yours truly. Last December I made a decision to sell about half of my personal equity holdings because I was expecting a selloff. Wanted to have my power dry, Trump looked scary etc. Well, I was wrong. Can the market sell-off 60% from these levels? Yes, probably. Does it change the fact that I was wrong about this rally? Nope, not at all. It's a fact. I did some post-mortem on my thought process and hopefully will avoid making the same error again. I certainly do not go around insulting people that have been long over this year and you don't see me making a prophecy for annihilation of the equity market come tomorrow.

Part 2. "I know better"

Trading is also a business where being wrong for free is a wonderful thing. If you make a statement or express an idea and someone shoots it down, it's worth listening no matter how it makes you feel. Ego sinks hedge funds and blows up portfolios.

I will repeat it again, it's better to be wrong and rich (it appears that Bill Ackman thinks otherwise, sadly). There are people here who know a lot about specific subjects. It's worth listening to them, the world of finance is vast and nobody knows everything. Shit, I've been in the business professionally for 20 years, worked in a few top institutions and yet I find blind spots in my knowledge set all the time.

PS. I was not sure if this belongs in Trading, Forum or Psychology, but I think the problem is general enough to talk about it here

And yet some questioned me for asking too many questions and admitting I was no expert. I have been trading my own home grown system full time since 2010 and joined ET to see what is out there and how do professionals trade.

I became a much better trader the last two years, thanks to coaching from folks like you, among others.

Thanks.

 

[sle]

And yet some questioned me for asking too many questions and admitting I was no expert.

I think I have questioned you about saying "thank you" at some point, but otherwise asking questions is the most welcome trait.

The point I am trying to make is that making money is hard enough as is. Once you add the cognitive biases (take any, from ambiguity bias to zero-sum bias) it gets even harder.

 

[fordewind]

I think I have questioned you about saying "thank you" at some point, but otherwise asking questions is the most welcome trait.

The point I am trying to make is that making money is hard enough as is. Once you add the cognitive biases (take any, from ambiguity bias to zero-sum bias) it gets even harder.

Having biases is no good.Just do what market tells you.

 

[sle]

I offloaded all my tech on the trump win only to reverse my decision 48 hrs later.

48 Hours? Smart man. I moved firms and that money is still stuck in cash so whatever I made on bitcoin this year (smart mistake), I did not make on holding equities (stupid mistake)

 

[Gambit]

48 Hours? Smart man. I moved firms and that money is still stuck in cash so whatever I made on bitcoin this year (smart mistake), I did not make on holding equities (stupid mistake)

Was there a reason you didn't put a collar on equities and ride things out? I thought that was the standard method of risk management for hnw individuals who didn't want to sell immediately. Just curious.

 

[sle]

Was there a reason you didn't put a collar on equities and ride things out? I thought that was the standard method of risk management for hnw individuals who didn't want to sell immediately. Just curious.

Because I was being a cocky moron. I was not looking to preserve capital, I was predicting a crash and thought I’d get long at the bottom. Well, at least I did not unload it all, just about half of it.

PS. Watch now as people show up and say “but dude, it was clear the market was going up!”

 

[piezoe]

Was there a reason you didn't put a collar on equities and ride things out? I thought that was the standard method of risk management for hnw individuals who didn't want to sell immediately. Just curious.

Getting out or staying in are both superior to trying to hedge. There is a purpose for hedging. It is to preserve a gain when you can't get out, at a cost of course. (This seldom applies to traders). In the main, hedging is a tool encouraged by brokers so as to take more money from their clients. I found reading Soros was very helpful, it gave me a much better grasp of why the the market does what it does and I became more patient and less likely to exit prematurely.