Why A Lot Of Traders Fail

Quote from kut2k2:

....The skills required to win at trading are mathematical: pattern detection, Kelly sizing.
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It makes me laugh when traders turn their noses down on poker players and other pro gamblers. Poker is a game of skill...just like trading...only a minute few succeed in poker just like in trading...in fact there are likely more successful professional gamblers than successful traders....we are no different than poker players
 
Poker is a game of skill...just like trading...we are no different than poker players
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Quite true my friend.

In trading just like in Poker, we simply take money from less educated/experienced traders.
 
Most traders fail because they cannot beat the spread or/and commissions/fees, case closed and end of story, don't let anybody tell you otherwise.

Trading is a mathematical game, if you can beat the spread and the commissions, in the long run you will make money, simple as that.

In other words, you need to have a statistical edge or you WILL get crushed, slowly but surely.
 
Quote from xelite777:

Trading IS gambling ?!?!

Who told you that lie?

Just curious.
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Reality. And the dictionary.
gam·ble (gmbl)
v. gam·bled, gam·bling, gam·bles
v.intr.
1.
a. To bet on an uncertain outcome, as of a contest.
b. To play a game of chance for stakes.
2. To take a risk in the hope of gaining an advantage or a benefit.
3. To engage in reckless or hazardous behavior: You are gambling with your health by continuing to smoke.
v.tr.
1. To put up as a stake in gambling; wager.
2. To expose to hazard; risk: gambled their lives in a dangerous rescue mission.
n.
1. A bet, wager, or other gambling venture.
2. An act or undertaking of uncertain outcome; a risk: I took a gamble that stock prices would rise.
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You are correct about the deep symmetry between poker and trading. And both are gambling.
 
Quote from SplawnDarts:

Reality. And the dictionary.
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Really?

Take a look at the chart of the Dow Jones Industrial Average for example (since 1902) and dare to tell us the up trend is just due to luck and random events, like in Poker or Roulette.

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Quote from xelite777:

Really?

Take a look at the chart of the Dow Jones Industrial Average for example (since 1902) and dare to tell us the up trend is just due to luck and random events, like in Poker or Roulette.
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First off, post the inflation adjusted chart and we'll talk about that.

Second, if your goal in trading is to capture beta, well, you won't have to be making many trades. That's not what I (or most speculative traders) are intending to do.

Trading is, and always will be, gambling. And that's OK, because gambling can be very profitable if you have the right skills.
 
Quote from SplawnDarts:

Similar to the article, you exhibit a poor understanding of gambling.

For starters, Kelly Criterion was created for and initially applied to gambling in the conventional sense (horse betting, etc). It's applicable to trading only because trading IS gambling. "Pattern detection" is hardly a skill in the conventional sense, but to the extent it is then it is at least as applicable in casino betting as in trading. An exploitable pattern is sports lines or weakness in a blackjack shuffle procedure is a "pattern" just as much as some trading setup is.

Second, you don't get to re-define gambling just because you'd like to. Gambling includes both the losing behavior you describe, and winning behavior. It always has been, and it always will be. And speculative traders, whether winners or losers, will always be gamblers.

Your assertion that winning gamblers call themselves "gamers" is absurd. I am one and know many of them. We refer to ourselves as gamblers, "professional gamblers", or occasionally as "advantage players" although that usage is all but dead. I have never heard a single person who wins at gambling refer to themselves as a gamer unless they were playing a video game.
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And you don't get to redefine trading as just another form of gambling just because you'd like to.

Gambling is rigid and confined, trading is open ended. The Kelly criterion for gambling is simple, the Kelly criterion for trading is much more complicated.

Different trend traders can all be profitable entering the same trend at different times and exiting at different times. Try doing that with a horse race or a hand of poker.

Gambling is confined to a single time frame. Traders can operate in a half dozen different time frames simultaneously.

You exhibit a poor understanding of trading.
 
Quote from SplawnDarts:

Reality. And the dictionary.
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Your absolute faith in the dictionary is comical.

The dictionary defines a god as a deity. The dictionary also defines a deity as a god.

Common sense calls this a circular definition. The dictionary doesn't know any better.

Most human activities worth doing involve some risks. Should we label all of them as gambling? Common sense says no, your dictionary says yes.
 
Shhhhhh.....

It's better to let the gambler think that trading is like gambling. Every gambler dream of becoming a trader. But no trader dreams of becoming a gambler.

I've seen a lot of professional gambler come into the world of trading and fail. Gambling is where the dumb people go to manipulate money.

The only thing gambling has that is related to trading is money management.

I'm a trader but I do not enjoy gambling. I rarely if ever play poker or go to a casino.
 
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