No rich person I know would ever in their wildest dream consider the risk of a 50% loss for a 100% gain. You have a completely wrong impression of the risk tolerance of an average wealthy individual.
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Why most pro traders are gamblers, and why risk control prevents success with OPM
- Thread starter Ghost of Cutten
- Start date
Quote from intradaybill:
Which fund do you prefer and why?
(1) +100% for the first year and - 50% for the second
(2) +15% for the first and +15% for the second
To give you a hint,
50% of 10 million is 5 million, still a lot of money. You can buy that luxury house and maybe two sports cars.
50% of 5k is 2.5K, now you can't even buy that old used car.
This should be enough to understand why your thinking is wrong. You are thinking like a poor man.
This is 100% correct. Well stated! There are many wealthy who like taking chances with millions just like the common man enjoys casinos. It's all relative. Obviously I am talking about real wealth , not rich dad poor dad idiotic opinions created to sell book by making the poor feel better.
Quote from Butterball:
No rich person I know would ever in their wildest dream consider the risk of a 50% loss for a 100% gain. You have a completely wrong impression of the risk tolerance of an average wealthy individual.
Huh?
How else do you make a 100% return without taking large risk ? I wish I knew this secret.
Why do you reply if you didn't take the time digesting my post. Where did I say it was feasible to achieve high returns without taking large risks?Quote from marketsurfer:
How else do you make a 100% return without taking large risk ?
Once again: The average wealthy person (that I know anyways) would rarely if ever be interested in a high risk/high reward type investment, betting the farm on a single idea.
this thread went from pro traders to how rich people get rich.. guess what.. rich people most of them are pretty smart and they watch their money like a hawk.. seriouslyyou might think it would be the opposite because you don't usually pay attention to something you have a lot of.. once you start paying 7 figures in taxes... for all of you hard work.. you tend to try and look for ways to give the government a haircut by lowering your taxes..
anyway.. most rich/wealthy people.. do it with a solid business. they can make 30 $ 50 % heck 100% return a year while building a business that could one day be sold...
think of how many pretty well off business owners there are?
How many do you know? I am sure a few.
Now traders.. pro or not.. how many wealthy traders do you know? none to not many.. why.. because it is an extremely difficult game and business...
The more money you have the easier this trading game becomes and the pros have almost endless amounts.. the arm chair home traders.. are typically underfunded and overleveraged..
I worked/traded my own book at Generic Trading and saw first hand how guys never made money at the end of each month..
Seriously.. these are guys who really thought they knew what they were doing.. the electronic screens have taken away the big B/A spread edge that floor and locals used to have.. thats why when you see the movie FLOORED you see guys who made big money.. it wasn't because of the great trading prowess.. the floor guys had clear edges that were definable.
goodluck trading.. I have been good at it for years (not great) and I am still not even close to rich.. I could have made way more money owning a cleaning business, a plumbing business, an extermination business etc.
Why do I do it.. for the thrill of it all..
anyway.. most rich/wealthy people.. do it with a solid business. they can make 30 $ 50 % heck 100% return a year while building a business that could one day be sold...
think of how many pretty well off business owners there are?
How many do you know? I am sure a few.
Now traders.. pro or not.. how many wealthy traders do you know? none to not many.. why.. because it is an extremely difficult game and business...
The more money you have the easier this trading game becomes and the pros have almost endless amounts.. the arm chair home traders.. are typically underfunded and overleveraged..
I worked/traded my own book at Generic Trading and saw first hand how guys never made money at the end of each month..
Seriously.. these are guys who really thought they knew what they were doing.. the electronic screens have taken away the big B/A spread edge that floor and locals used to have.. thats why when you see the movie FLOORED you see guys who made big money.. it wasn't because of the great trading prowess.. the floor guys had clear edges that were definable.
goodluck trading.. I have been good at it for years (not great) and I am still not even close to rich.. I could have made way more money owning a cleaning business, a plumbing business, an extermination business etc.
Why do I do it.. for the thrill of it all..
Quote from Totalizator:
Why do I do it.. for the thrill of it all..
Maybe that's why you aren't rich. Not that I am, but I approach trading like a business. I don't gamble and I don't trade for thrills. I do it to make money and I make a nice supplemental income from trading in my spare time. Rather than spend this money I am growing my account. It may not make me rich, that's not my goal, but it is growing my wealth. And the more money I have the more risk averse I am.