Why are you proud to be a trader?

Bighog- the bellies still functioned. You may be right, commercials left first, but my point is the market still existed.

Question: Does the housing market require short term specs to function? I'm not talking about about speculative builders, I'm talking about the flippers who don't even touch the property.


Don't misunderstand, I'm not saying trading should be done away with. I like being honest about my place in the world.
 
Yes, but you keep prices around true value.

Because of that, distorted prices aren't sent to the marketplace. Which, if acted upon, would result in global mal-investment into unnecessary capacity, or expensive substitutes. So, in reality, you're ensuring the world saves a shit load of money. Which is one reason why it pays well...
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There is no such thing as absolute 'true value'. If there was, then Marx was right.

There is only perceived value, which is a very emphermal psychological variable that can change suddenly and whimsically.

Brings up a great question: You claim that traders help price discovery which may be true under some circumstances, but can't traders also distort pricing? Flash crash? Hunt Bros. anyone?

Exe: Can you tell me what the true value is for the Dec 2011 Corn futures contract? A crop that hasn't even been planted yet.
 
btw, I have found pride in my own work to be useless for myself. I do take satisfaction in a job well done or in this case, the game well played. It's hard to feel proud clicking a mouse for a living... I guess, it's just me, so have a blast and be proud.
 
Quote from Mav88:

Bighog- the bellies still functioned. You may be right, commercials left first, but my point is the market still existed.

Question: Does the housing market require short term specs to function? I'm not talking about about speculative builders, I'm talking about the flippers who don't even touch the property.


Don't misunderstand, I'm not saying trading should be done away with. I like being honest about my place in the world.
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Mav, your place in the world is really meaningless in the big picture. We are all consumers and are conditioned by our system to do just that.....CONSUME, consume to grease the skids for business to make a profit and hopefully share the wealth created with society. (that is a whole different can of worms that we will pass on in this discussion).

Our parents get us started, our starting point is where our parents stand in society, some give us a golden spoon some give us negative failure to overcome.

Trading is a choice, it is legit, casinos are legit, if preferred we can pass on both. Italians might want to steal for a living, Jewish might want to buy everything at wholesale, choices, many choices.

I have no problem with trading at all, i do have a problem with how the "street" conducts it's operations at times, corp ceo's are in general KING BS"ers to peddle their wares, thats how things are..........you and i are not going to change it. So we do what we can with what we have. Trading is a profession, being a crook is a profession, choices, life itself is a choice. Deal with it.

Sidenote: People can make change if they ever got together. In USA we are wussies, we are brainwashed and puppets of the big monied interests. We allow Unions to be smashed but sit back and watch the corps steal us to poverty and never lift a finger. How can anyone sleep at night as they watch workers get shafted while watching corp execs walk away with 30 million a year. Who is the fool in that picture?

On one hand we say teachers are treasures for the kids, on the other hand lets destroy their voice and take away their bennies and lower their pay. It all boils down to Union busting, that means greed on the monied interests side. When all workers are smashed down to poverty and a few have all the wealth....would you really want to stay in America?

HOG OUT!! have a good week trading. SPRING has Sprung..........soon chicks in shorts :)
 
Quote from Mav88:

It is different for 2 reasons:
1) You didn't take their money. Applying for a job is not equal to playing the trading game. A more accurate analogy would be be that you all got the job but only you made money while the others actually had to pay.

2) when you get the job you might have a shot at making something of value to someone else
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Your objection 1 is only true IF the other 9 applicants are able to get another job which pays equal to the one I got over them. If they are forced to take a job for less money than the one I got pays, they have absolutely had to pay (there are also other costs like the time and effort to apply to more jobs on the part of the other applicants). What if they have to take a job which pays $5K less, which then becomes the base for all subsequent salary increases and bonuses over a 30 year career? Losing out on that job to me ends up costing them over $150K, so, you need to look at the entire span of the person's career and the impact. What I'm saying is that trading, while perhaps a more "in your face" kind of competition, is nonetheless no different from other forms of competition where scarce resources like money are being allocated.

Objection 2 is different from your original point, which was that the losing side in a trade is somehow different from losing in other areas of a competitive economy, which is what I was addressing. Objection 2 assumes your conclusion about trading vs. other jobs is true, without actually proving it, which isn't really a strong way to argue (in fact, you don't argue) your point.

Even if we took your idea that trading is completely zero-sum and my gain is another trader's loss and vice versa to its logical extreme, the tax code makes trading positive-sum to society overall, since taxes on all gains are due in the current tax year while tax deductions on losses are likely to be spread over multiple years, due to the limitation on loss claims. So, even at the most extreme end of the argument, where none of the other value claims that can be made for trading are legitimate, successful traders still generate some social value.
 
I'm inclined to side with hog, throw up my arms and say wtf

I'll wrestle with you a little more logic.

Your objection 1 is only true IF the other 9 applicants are able to get another job which pays equal to the one I got over them. If they are forced to take a job for less money than the one I got pays, they have absolutely had to pay (there are also other costs like the time and effort to apply to more jobs on the part of the other applicants). What if they have to take a job which pays $5K less, which then becomes the base for all subsequent salary increases and bonuses over a 30 year career? Losing out on that job to me ends up costing them over $150K, so, you need to look at the entire span of the person's career and the impact. What I'm saying is that trading, while perhaps a more "in your face" kind of competition, is nonetheless no different from other forms of competition where scarce resources like money are being allocated.
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I was limiting myself to you and the universe of other traders, that's where your cash comes from. You can't simply say the losers can get another job because you need them for your paycheck. That is opposed to wealth creating activities where you can have everyone win in the act of trading and competing. Not saying they all do, but it is at least possible. Competing in trading destroys all the losers financially, but job competition doesn't have to be so. Competing is business creates wealth at least sometimes, competing in trading redistributes money.


You have confusion between money and wealth. Money is simply a piece of paper with legal backing, it is not a scarce resource. Bernanke can print as much as he wishes. True wealth is a good or service that someone else values. It can be resource limited but doesn't have to be (like software or services). Bottom line is that swapping money MAY help with financial allocation, but ultimately somebody somewhere needs to create real wealth or all our money games are meaningless.



Objection 2 is different from your original point, which was that the losing side in a trade is somehow different from losing in other areas of a competitive economy, which is what I was addressing. Objection 2 assumes your conclusion about trading vs. other jobs is true, without actually proving it, which isn't really a strong way to argue (in fact, you don't argue) your point.

Even if we took your idea that trading is completely zero-sum and my gain is another trader's loss and vice versa to its logical extreme, the tax code makes trading positive-sum to society overall, since taxes on all gains are due in the current tax year while tax deductions on losses are likely to be spread over multiple years, due to the limitation on loss claims. So, even at the most extreme end of the argument, where none of the other value claims that can be made for trading are legitimate, successful traders still generate some social value.
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ok, so swapping money creates tax revenue and trading can help with the money flows to perhaps productive ends by someone else (that's a stretch). It doesn't change the fact that generally there must be losers in the markets and that where at least some of your money comes from.

Is your value added greater than the losers loss? I hope so
Do the computers doing HFT add value? hard to buy..

good day for biking, c ya
 
Quote from Mav88:

I'm inclined to side with hog, throw up my arms and say wtf

I'll wrestle with you a little more logic.

I was limiting myself to you and the universe of other traders, that's where your cash comes from. You can't simply say the losers can get another job because you need them for your paycheck. That is opposed to wealth creating activities where you can have everyone win in the act of trading and competing. Not saying they all do, but it is at least possible. Competing in trading destroys all the losers financially, but job competition doesn't have to be so. Competing is business creates wealth at least sometimes, competing in trading redistributes money.


You have confusion between money and wealth. Money is simply a piece of paper with legal backing, it is not a scarce resource. Bernanke can print as much as he wishes. True wealth is a good or service that someone else values. It can be resource limited but doesn't have to be (like software or services). Bottom line is that swapping money MAY help with financial allocation, but ultimately somebody somewhere needs to create real wealth or all our money games are meaningless.


ok, so swapping money creates tax revenue and trading can help with the money flows to perhaps productive ends by someone else (that's a stretch). It doesn't change the fact that generally there must be losers in the markets and that where at least some of your money comes from.

Is your value added greater than the losers loss? I hope so
Do the computers doing HFT add value? hard to buy..

good day for biking, c ya
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I could have easily said "wealth" instead of "money" in the employment example. As an employee of a company, I have a claim on some of the wealth it creates, typically in the form of money (yes, money's value fluctuates, but presumably my claim of the proportion of my employer's monetary cash flow remains relatively constant over time, all things being equal. Even in hyperinflationary situations, workers wages rise. We can debate whether or not those raises keep up with inflation but that's a completely different topic). So, while your nitpick was technically correct, you missed the context.

Secondly, you are missing the fact that as participants in a competitive economy, we are all traders all the time. In the employment example, I am trying to best align my "offer" with the employer's "bid", as are others. That the others can later align their offer with a different employers' bid is immaterial. So too can a trader whose trade with me is a loser go on to trade with another and have a winner. Yes, the person who loses a $100K job to me and takes a $95K job is still doing OK, but he took that $95K job from someone who now has to take a $90K job, so on down the line until there is someone with no job whatsoever because he can't find an employer to take his offer. There's the person analogous to your losing trader, although, as I pointed out, each of the other people who competed against me for the job have also "lost" to some extent, insofar as we each wanted the same job originally.

Your focus is too narrow. Trading is the quintessential human activity. There is simply no way around it. What you're really complaining about is the separation of the trader from the producer. Well, that's just the division of labor working its magic. Some produce and some trade and both end up better off due to comparative advantage. If this was not the case, trading would have disappeared by now.
 
Quote from Mav88:

There is no such thing as absolute 'true value'. If there was, then Marx was right.

There is only perceived value, which is a very emphermal psychological variable that can change suddenly and whimsically.

Brings up a great question: You claim that traders help price discovery which may be true under some circumstances, but can't traders also distort pricing? Flash crash? Hunt Bros. anyone?

Exe: Can you tell me what the true value is for the Dec 2011 Corn futures contract? A crop that hasn't even been planted yet.
More...

I didn't say "true value".

I said around true value. Big difference.

And the perception of value is nowhere near as whismical or specious as you claim. Which explains why crude oil or google doesn't jump in 50 dollar handles, all over the book. Rather, price discovery is methodical, trending up and down in a relatively orderly fashion. Yes, traders can distort prices sometimes. But again, it's a relative distinction. Distortion and manipulation is far more prevalent in non-speculative markets. So we opt for the best solution available to us at the time, and that's non-commercial participation in markets. Hunt Brothers is definitely the rare exception. And they nearly lost their shirt. The flash crash is more a technical and regulatory failure, than a market one. Notice, futures were exceptionally orderly while Fortune 100 company's like P&G traded to 1 penny. If HFT manipulation, quote stuffing and front-running was banned, that never would have happened. Which explains why sound companies never dropped to zero before HFT. And if they did, it was short-lasted black swan event.

As far as Dec 2011 corn, again, your understanding is incorrect. There is no absolute true value. There is however a range of true values that represents the collective market intelligence at any moment in time that discounts all current and future conditions: current prices, anticipated future demand, substitute crop acreage and demand, anticipated weather conditions etc. As time marches closer to delivery, the multitude of variables are increasingly established and priced-in accordingly. Like a telescope which slowly comes into focus over time. The pro's have a much better idea of what those variables are, how best to measure them, and push the market to those ranges, accordingly. This is not some roulette wheel mechanism where close prices are randomly picked out of a hat, or just "end up" there, through panic buying or selling. 2$ a bushel one month and 20$ a bushel the next. This is why price levels remain close between intervals. Because conditions don't change that much from one moment in time, to the next, and therefore, is reflected as such through similar adjacent prices.

What you're attempting to do is deconstruct an argument using outliers. Outliers exist in every proven theory and behavior. It proves very little. Economists and academics are decided on the matter that non commercial participation aids price discovery, mitigates risk, adds liquidity, thwarts manipulation, rewards great companies, punishes wealth destroyers etc, as well as contributing a host of other benefits on the marketplace. Perhaps you can explain in detail why each of those tenants is incorrect?
 
To the op,

Of couse traders are a proud bunch. I've not met a profitable trader that are not as cocky as shit. they may not say so but as you get to know them, you can sense it.

Come back to this thread when you start making some $.
 
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