there is no career in trading - quote

[cruisecontrol]

Momentum trading isn’t about price discovery. It’s about front running whales. And that is negative to the real economy: whether it be bear raids or it be creating instability in commodity prices or taking money from people who are buying for cashflow and value (and not for price).

I think this is a misconception. If you are trading on public information then it's not front running. If there is a distressed seller (whale) getting out then buyers will compete on their discount to fair value to provide to the whale. Momentum trading into that will not be profitable unless you are faster than everyone else in understanding the fair price -- in which case you are indeed doing price discovery. If you shorted at the price where buyers were providing liquidity to the whale then you'll just lose when price reverts to fair value.

I think you are trying to create a moral component to trading when there isn’t one. You can easily say: who cares if I contribute. I’m having fun, earning and not hurting anyone directly. You will be amazed at how many people say that on a bank trading floor.

Wait, I'm creating a moral component or were you paraphrasing what I said about you? You have to distinguish which types of trading are beneficial. I'm glad you agree that market makers are beneficial, but that is just one facet of the liquidity ecosystem.

 

[robmachine]

No one here talks about the opportunities on the side if you are an experienced trader. Many out there earn money for example through social media activities, selling trading tools, backtesting strategies or teach others...

So there is much you can do as a trader than just trading and these things can also be seen as part of your career as a trader.

 

[VicBee]

I agree trading isn’t zero sum in that a liquid market inflates asset prices and that incentivizes real capital to be invested. It is largely zero sum in that there is a winner and a loser as real wealth isn’t produced (like building an airplane or providing a real service). It’s value is a secondary derivative.

Do you want the sum of your productive life to be a minnow in that phenomenon?

obviously there’s no right answer. It’s all based on our own value system and full disclosure I’m struggling with it myself.

It sounds to me that you're finding your true self versus expected self. For some, making money is a ridiculous endeavor, a true waste of one's life, that should only be a byproduct of a meaningful activity. In your case, it seems that you're fed up with abstractions and need a practical activity. Become a doctor, build a business that makes things, invent something useful. Life is short and it's important to find meaning while time permits.

 

[TheDawn]

Real investors own assets for their cashflow where the current price is the present value of that cashflow. It's very different than a trader who is looking for a change in price.

So why can't you look at that "change in price" as the present value of the cashflow in the timeframe that the trader is trading in? Who gave that "cashflow" the information regarding its future value if there was no market and no traders trading it? You think that "value" just dropped out of the sky or was bestowed upon us by the Value God or in some countries at one point in time, determined in a whim by some autocratic rulers? It's traders, no matter how small that gave that "cashflow" the information about its future value because a transaction happened, a trade look place. Without traders, how do you know that how much "cashflow" is worth at any given time? The information of a "value" of something comes about whenever a buy/sell transaction takes place whether it's in a public market or in a private one-on-on exchange. And then whenever the value of that same thing needs to be appraised and determined, they look at the most recent buy/sell transactions undertaken by traders to get an approximate estimation of the value but the real value still won't be established until that actual asset is traded, by you guessed it, traders!

I find the reason why people don't realize the value of traders' work is because they really don't have a correct idea of what is a trader. When people think of a trader, they either have an image of those floor traders, shouting and spitting at each other on the floors of those exchanges, or somebody hobbled over a telephone negotiating transactions while looking at a terminal with fast-moving numbers or charts or some losers, sometimes living with his parents, staring at several different computer screens, analyzing charts and then put in trades thinking their prices are too "low" or too "high" and then lose money. These are very stereotypical notions of traders. And according to these stereotypical notions of traders, they form biased opinions including value judgment of traders' work and traders themselves and that's the problem.

 

[TheDawn]

What products are produced by financial trading? I don't understand your first part of the post.

See my previous post above and my post from the Sunday past at 5:XX PM.

 

[TheDawn]

Momentum trading isn’t about price discovery. It’s about front running whales. And that is negative to the real economy: whether it be bear raids or it be creating instability in commodity prices or taking money from people who are buying for cashflow and value (and not for price).

I think you are trying to create a moral component to trading when there isn’t one. You can easily say: who cares if I contribute. I’m having fun, earning and not hurting anyone directly. You will be amazed at how many people say that on a bank trading floor.

You have no idea about what's frontrunning. Let's look at the definition of frontrunning, shall we? According to Wikipedia, Front running, also known as tailgating, is the prohibited practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transaction that will influence the price of the underlying security. https://en.wikipedia.org/wiki/Front_running

First of all the information has to be non-public or inside information and how many retail traders which is what you take as traders have access to non-published insider information? Second, the trade has to be ahead of others. How do you know a trader in your mind retail trader has really traded ahead of the "whales" which I take it you mean institutions in the so-called momentum trading? How do you know that by the time the retail trader entered his order, the price has not already been inflated or depressed? So in this case, has the institutions frontrunned retail traders in this case since they are much more able to get insider information? But that's ok in your mind right? If the institutions, the hedge funds, the mutual funds, the "whales" frontrun retail traders, that's correct because their trades are reflecting the "real value" of the assets? And yet when retail traders put in a trade, it's frontrunning and it's not based on "real value" of the assets? LOL

Now I see where your misplaced valuation of a trader and retail trader's work comes from. It comes from the wrongful understanding of some trading practices and the biased hatred of retail traders all because you encountered some floor traders. Floor traders are not representative of all retail traders or even traders; they are just a segment of the traders' profession. You are taking a branch from one tree in the forest and you think you have seen the entire forest. You are forming a judgment about traders according to just a handful of traders that you have seen or known.

 

[TheDawn]

No one here talks about the opportunities on the side if you are an experienced trader. Many out there earn money for example through social media activities, selling trading tools, backtesting strategies or teach others...

So there is much you can do as a trader than just trading and these things can also be seen as part of your career as a trader.

That is very true.

 

[Millionaire]

No one here talks about the opportunities on the side if you are an experienced trader. Many out there earn money for example through social media activities, selling trading tools, backtesting strategies or teach others...

Too many conmen and charlatans in that game. Most of us don't want to be associated with that business.

If I wanted to do it with integrity I would have to give my customers a real verifiable edge to trade, not the BS most vendors sell, but if I did that I would just get ripped off.

 

[tiddlywinks]

Too many conmen and charlatans in that game. Most of us don't want to be associated with that business.

I agree with that sentiment of "vendors".

For a successful trader however, there is at least one other option. Philanthropy for lack of a better word.
- Start a "Pothole Project" in your LOCAL community.
- Take a page from Cantor Fitzgerald and DONATE a day, or a few days, of trading profit throughout the year. Traders choice of where the money goes.
- Be a Secret Santa or buy the groceries of the person behind you in line or similar.
- Give a $1000 tip to a waitress.

Get creative. Create a Legacy. A successful trader can do a lot of good!!

 

[TheDawn]

Too many conmen and charlatans in that game. Most of us don't want to be associated with that business.

If I wanted to do it with integrity I would have to give my customers a real verifiable edge to trade, not the BS most vendors sell, but if I did that I would just get ripped off.

But those creating and providing trading softwares, tools and platforms like eSignal are not conmen nor are data providers. Another service created by traders is tax accountants for traders. They genuinely provide useful and viable services to traders. And even in the trading education category, there are genuine teachers out there who are not snake oil salesmen but really try to teach the various aspects of trading that are helpful especially for beginner traders who are new to trading. Unfortunately few rotten apples really spoil the bunch. It's those unscrupulous idiots who really give the trading education a bad name but that sadly exists in every single profession.