Why Do We Trade? For Real.

[smallStops]

:eek::eek::eek:

Tons of hedge funds fail. ...
surf

I was not expecting that!!!!
Why are they so many to fail : tons of these?
Does it mean tons of their traders trading OPM fail?
Or I am missing something on the reasoning.

 

[newwurldmn]

:eek::eek::eek:

I was not expecting that!!!!
Why are they so many to fail : tons of these?
Does it mean tons of their traders trading OPM fail?
Or I am missing something on the reasoning.

Most emerging hedgefunds fail because they cannot get the critical mass of AUM to generate fees to pay their expenses. They can't get the critical mass because they
1. don't have the marketing savvy to build confidence in their strategies
2. don't have the returns to give investors confidence in their strategies


Once you get to a critical mass, it's harder to fail but more likely than a comparable operating business because your investors can lose confidence in you quickly. If Lumber Liquidators was a hedgefund they would be done by now.

 

[cornix]

For what reasons do people want to believe that all top traders trade OPM?
What is upsetting if some top traders are not interested in OPM?
And what is the rate of failure for HF - where supposedly all top traders are supposed to land?

Maybe there are some who only trade their own money. But among those who are known most definitely trade OPM and failure rate is exactly why.

Beauty of this scheme is there is no need for an edge to make a lot of money.

 

[cornix]

MarketSurfer :

You seem to love the word "fantasy" "impossible" etc...

May I ask : what is the failure rate of HF : just facts please.

"Random Walk Down Wall Street" by Burton Malkiel sheds some light onto the issue.

 

[Blueline]

Totally disagree. 90% of all trading profits are from computer programs. Nothing to do with the button pushers. The market is numbers. Numbers can be quantified. Computers eat numbers. Computers are not made for making charts so humans can see. Wake up.

90% thing has nothing to do with the current discussion.....nor the title of the thread.
So according to you, your "perception" of the markets are nothing but numbers?.....ok.
Then I have a question: Just because you cannot see, does that mean everyone else is in the same position?

 

[WWarrior]

Daytrading is not by definition stressful and risky. Stress depends also from the personality of the trader. Stress depens also from the fact that many tradres have no clue what they should do, and mostly when, if the market moves. if you have a clear trading plan you always know what to day and your stresslevel will be much lower. Same arguments for the risk.

Excellent points, I used to day trade flying by the seat of my pants, chasing price around, now its the complete opposite... price comes to me now and taking trades easy

 

[Blueline]

So your belief is: ability to trade successfully is genetically predefined?

In a sense, if you read between the words, looks like yes.
On the other side of the coin would be limitations. We all have limitations, the question is why?.....again, how deep do we want to go?

Absolutely agree. With one note. People do things differently, because in the first place they know how. Which in the first place has the intention to know how. Coming back to motives in the logical loop.

Yes but this so called ("the intention" to know how) wouldn't be in the initial starting point for most. Its more like a discovery process. So, sort of like a chain event if you like, one leads to another.

Of course. Me and Gates have very different set of unique mental, emotional and physiological abilities, so the outcome would be very different.

Every person, however, can achieve the #1 priority - quality of life, which is somewhat ideal for that particular person. Which I believe is the ultimate success. Everything else is optional attribute of success or failure.

That's why I stopped day trading and switched back to investing/running business/writing/counseling. I realized just having another well-paid job is not exactly what I want in life. Especially such stressful and risky as trading.

Whenever I succeeded in life, I was rather an investor and a manager, not the performer. No wonder some issues showed their head when I tried to shift balance to much weaker side of my personality.

Just an example of such analysis from life quality point of view.

"ultimate success" will vary according to each person based on how they perceive.
On you note of day trading (stressful and risky trading) is just a perception from your perspective based on your understanding. For those who are more advanced, they don't perceive the same way as you do. Maybe you have reached your limitation?

 

[Blueline]

Gates smartly took advantage of an unbelievably lucky series of events but the idea that he couldn't be replaced is utter nonsense.

Luck is nothing but a word, yet, it cannot happen to anyone else. There is no such a thing as luck, this is only looking at the surface.....again, all meant to be.....at the right time, the right place, the right person. (with the right conditions the effects will follow)

 

[i am nobody]

Luck is nothing but a word, yet, it cannot happen to anyone else. There is no such a thing as luck, this is only looking at the surface.....again, all meant to be.....at the right time, the right place, the right person. (with the right conditions the effects will follow)

I learned that people who want to achieve something don't have luck. They do certain things to achieve what they are aiming for. If certain things happen that favor him it was part of the expectations that he had. Luck means to me something that happens but that was opposite of what was intended to be achieved or to happen.
An example is: I was long and prices went extremely quickly short. I wanted to double my position, but hit by accident the button to close my position. That was luck because I had no intention at all to close my position.

Only bad luck exist. Bad luck is when you intentionally do something and then things go wrong.
An example is: I go short Swiss franc and then the opposite happened. My intention was to make money going short, but I lost hugely because the market did the opposite of what I expected.

 

[marketsurfer]

90% thing has nothing to do with the current discussion.....nor the title of the thread.
So according to you, your "perception" of the markets are nothing but numbers?.....ok.
Then I have a question: Just because you cannot see, does that mean everyone else is in the same position?

There is a difference between reality and perception. I speak of reality and you only see what you want to see.