alufejuli
10-21-2015,
(DISCLAIMER :This is my opinion. I am still learning.)
…Bad traders bleed quickly, and a very small number of traders make any money at all, substantially less than that make good money.
”90% of traders fail” is something everyone comes across at multiples while they’re learning about the markets, but obviously not something that most take too seriously. It is probably the same thing that makes people buy lottery tickets. The idea that “I know the odds are really against me, like super against me, but I am special. I am unique. My life’s story has to work out because hey, I’m the protagonist.” While nobody will usually readily admit it, we all secretively believe God/Fate holds us in just a little bit better favor than everyone else.
If you go back through all the old forum posts over the years here, basically every two to three years it is a completely different group of people. While it’s possible they just got bored with these forums, or made so much money that they moved to the Bahamas and retired, most likely they lost, or made so little when push-came-to -shove, that they just moved on to some other way of making their money work for them. Why is everyone selling trading ideas? Why does everyone have a book? If they were reeeaaalllyyyy doing well at trading, they would offer these things for free because they had that kind of time on their hands. Most likely, they know enough to make a little money, but they still need something to supplement their income and they know there is always a new group of people with a few thousand bucks coming up to the plate with dollar signs shining in their eyes.
I’m never usually the dumbest person in the room but I’m also never the smartest, which is what concerns me the most about trading. If it was about intelligence, those much smarter than me would have already figured out how to beat it, whether through mathematical probabilities or deep psychological comprehension, they would own the markets.
Somebody has to be buying high while everyone else is selling. This by itself implies that a new group of suckers is not only a logical conclusion to draw, but a necessity for markets to function. Everyone believes they will take advantage of the movements of the herd, when in reality, just by attempting to do this, they become the herd.
All this leads me to believe that the market is not at all in favor of retail-investors. In-fact, if it is in favor of anything, it is of taking retail investors money. If trading was your best bet, then why do brokers get into business. Obviously, they have decided that not through trading, but facilitating the trading of others is a more lucrative way to profit from exchanges.
Much like common pump-and-dumps of small-caps, larger-cap stocks must function in a similar way. While this is an oversimplification, my guess is; big institutional money moves the markets, retail follows, and institutional investors eventually leave retail holding the bag. Just like a casino, it doesn’t always work this way, but overall the numbers work in the favor of institutions. While it is guaranteed more complicated than this, overall this idea is what I think works against retail investors. Basically, we are the mark. No matter how smart or educated a sucker may be, he is still a sucker. We are all playing the hands we have been dealt, just the reality is; it’s a bad hand.
Without realizing this, rather than using our money as capital, we might as well write Wall Street a check.
Any opinion on this from some more experienced traders?
…Bad traders bleed quickly, and a very small number of traders make any money at all, substantially less than that make good money.
”90% of traders fail” is something everyone comes across at multiples while they’re learning about the markets, but obviously not something that most take too seriously. It is probably the same thing that makes people buy lottery tickets. The idea that “I know the odds are really against me, like super against me, but I am special. I am unique. My life’s story has to work out because hey, I’m the protagonist.” While nobody will usually readily admit it, we all secretively believe God/Fate holds us in just a little bit better favor than everyone else.
If you go back through all the old forum posts over the years here, basically every two to three years it is a completely different group of people. While it’s possible they just got bored with these forums, or made so much money that they moved to the Bahamas and retired, most likely they lost, or made so little when push-came-to -shove, that they just moved on to some other way of making their money work for them. Why is everyone selling trading ideas? Why does everyone have a book? If they were reeeaaalllyyyy doing well at trading, they would offer these things for free because they had that kind of time on their hands. Most likely, they know enough to make a little money, but they still need something to supplement their income and they know there is always a new group of people with a few thousand bucks coming up to the plate with dollar signs shining in their eyes.
I’m never usually the dumbest person in the room but I’m also never the smartest, which is what concerns me the most about trading. If it was about intelligence, those much smarter than me would have already figured out how to beat it, whether through mathematical probabilities or deep psychological comprehension, they would own the markets.
Somebody has to be buying high while everyone else is selling. This by itself implies that a new group of suckers is not only a logical conclusion to draw, but a necessity for markets to function. Everyone believes they will take advantage of the movements of the herd, when in reality, just by attempting to do this, they become the herd.
All this leads me to believe that the market is not at all in favor of retail-investors. In-fact, if it is in favor of anything, it is of taking retail investors money. If trading was your best bet, then why do brokers get into business. Obviously, they have decided that not through trading, but facilitating the trading of others is a more lucrative way to profit from exchanges.
Much like common pump-and-dumps of small-caps, larger-cap stocks must function in a similar way. While this is an oversimplification, my guess is; big institutional money moves the markets, retail follows, and institutional investors eventually leave retail holding the bag. Just like a casino, it doesn’t always work this way, but overall the numbers work in the favor of institutions. While it is guaranteed more complicated than this, overall this idea is what I think works against retail investors. Basically, we are the mark. No matter how smart or educated a sucker may be, he is still a sucker. We are all playing the hands we have been dealt, just the reality is; it’s a bad hand.
Without realizing this, rather than using our money as capital, we might as well write Wall Street a check.
Any opinion on this from some more experienced traders?