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Profit Guilt


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Profit Guilt

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  #1 (permalink)
 dark pool 
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Posts: 18 since Mar 2015

Hi all,

I am a new trader who has been trading in the green for about a month now. I believe I have a solid understanding of this game's fundamentals, different views that people have on what function the markets provide. We are buying and selling fictional assets that have no inherent value except the psychological value people place in it, based on the corresponding psychological price levels we give importance to depending on the numbers that we interpret from the availability of fundamental resources to drive *hopefully growing demand. On one level, investors provide capital to finance ventures to accrue more resources(oil, gold, commodities in general)-which build infrastructure and allow for more specialization(through diverse specialized companies)towards the optimization of our resource gathering/efficiency. On another level, traders speculate and drive prices within certain "projection zones"-which may or may not have a fundamental basis as it is a PROJECTION on continued growth, or decline. Bubbles could not happen if this was not the case.

Now the industry itself: as I understand it, the industry does NOT have my best interests at heart. Brokerages make money off of commission and sell/use retail information they gather. Institutions take advantage of information edge, news driving and large capital to mow down retailers. High frequency traders try to scalp everyone...

This led me to adopt a psychology of "being a market sociopath". I had to accept the fact that for me to make money, someone out there was "losing money". I thought that most successful traders were "tricking" their morality in order to make money.

But this, as it turns out, is a path to loading yourself down with guilt over taking profit lol. Upon further reflection, I realized that anybody who enters the market is essentially a gambler. Once that money leaves their pocket and is in the market-it's no longer any individual's money. It is the markets money, and being made up of all our psychologies/fears/greeds-it will do what it does. I am merely an account operator who lends money to gamblers to play the game they love. Anything I'm missing?

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  #3 (permalink)
 Fat Tails 
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@dark pool: I like your post and I think you are mostly rright.

Traders are not allowed to print money, so if you wish to make a living from trading, you need to transfer OPM (other people's money) to your own pocket. You don't need to feel guilt, if you make profits. Your profits come at a risk, which is the risk of losing your own money.

And yes, I agree with some of your conclusions:

-> Trading is a variation of gambling: Professional gamblers only play, when they have an edge. You have an edge, when the expectancy of your returns is positive.
-> Trading is essentially a zero sum game, with commissions, slippage and operational cost deducted afterwards. This means that the expectancy for all traders is negative.
-> There is a huge industry selling mostly useless, sometimes useful services to traders. The expectancy for the industry is positive.
-> As with the gambling industry traders do not only want to make money. They also seek thrill, entertainment and ego boosting.

Society has developed various ways of recycling money. One is taxation. Trading and gambling is different from taxation because it does not serve any purposes other than self-enrichment or entertainment. And the participation is not mandatory. If you feel guilt, or if you don't like it you can stay off trading and spend your spare-time otherwise. You can invest your money in collecting stamps or doing other crazy things...

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  #4 (permalink)
 dark pool 
detroit+mi/usa
 
 
Posts: 18 since Mar 2015

Hah, I actually left the banking industry back in 2007 because I couldn't lie to people's faces anymore. This was before the crash obviously, so I'd like to think I called that. :P National City(bank I used to work for)got reamed proper, and I had the last laugh. Trading for myself is vastly different-I do not have to lie to people, I just have to see through their intentions. It actually helps that I know that everyone is out to get me because it lets me perform free of unnecessary emotion. I've also been educating myself further on what it is exactly the Federal Reserve does...for so long I'd accepted the banker's gospel that I'd forgotten to think for myself. The results...are quite disturbing to say the least lol.

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  #5 (permalink)
 MacroNinja 
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Out of curiosity, if you only sold put options to earn the premium to act as an insurance company, do you feel the same profit guilt and "market socialpath" feelings that you described?

(Obviously that's not a good long term strategy, but I'm just trying to get a better understanding of how your emotions play out in different situations).

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  #6 (permalink)
 artemiso 
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Contrary to @Fat Tails, I disagree with most of what you've said.


dark pool View Post
High frequency traders try to scalp everyone...

That's not true. Electronic market makers are only competing to offer a better price than the next market maker. This means on a whole, all market makers make less and less money over time. Goldman used to make to the tune of $3 billion a year in this business of market making. Now by some estimates, the *entire* electronic market making industry makes $3 billion per year.

It's like how the invention of the internet has helped bring down insurance premiums because now insurance providers have to be more competitive as their pricing becomes more public and transparent. The winners are the users of this risk transfer mechanism, which include retail traders.

What worries me *slightly* about this is not the presence of electronic market makers, but rather that we have too few electronic market makers. We've seen 3 major electronic market makers disappear in the last 3 years. Today, essentially 4 firms trade against almost everyone else in the equity options market. That's like walking down the street and only having a choice of eating from McDonalds, Taco Bell, KFC or Burger King.


dark pool View Post
I am a new trader who has been trading in the green for about a month now. I believe I have a solid understanding of this game's fundamentals, different views that people have on what function the markets provide. We are buying and selling fictional assets that have no inherent value except the psychological value people place in it,

I suppose you are referring to derivatives when you speak of 'fictional assets'. There's nothing fictional about, say, a futures contract in orange juice. If you held it to delivery, you'd see your orange juice in storage facility. That seems to me the same as signing a contract to buy a house, seeing numbers in your bank account or accrual-based accounting. (In accrual-based accounting, your cash 'assets' decrease when you receive a piece of paper demanding for your money.)

Sure there's a metaphysical argument to be made that no one should be giving you a bag of fruit just because you reduced some numbers in your bank account statement, but that has the same level of philosophical circularity as saying that we don't need to wear clothes in public because nudity is a fictional invention of mankind.


dark pool View Post
But this, as it turns out, is a path to loading yourself down with guilt over taking profit lol. Upon further reflection, I realized that anybody who enters the market is essentially a gambler. Once that money leaves their pocket and is in the market-it's no longer any individual's money. It is the markets money, and being made up of all our psychologies/fears/greeds-it will do what it does. I am merely an account operator who lends money to gamblers to play the game they love. Anything I'm missing?

A significant portion of people use the markets for good reason. To invest their retirement assets to overcome inflation risk; to protect their manufacturing or agricultural business from price fluctuations; to ensure they can deliver on a production contract that they had with another company. Risk doesn't go away, it can only be transferred from one party to another. Quite on the contrary, from your description, you're the one who's borrowing money from brokerages.

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  #7 (permalink)
 dark pool 
detroit+mi/usa
 
 
Posts: 18 since Mar 2015


MacroNinja View Post
Out of curiosity, if you only sold put options to earn the premium to act as an insurance company, do you feel the same profit guilt and "market socialpath" feelings that you described?

(Obviously that's not a good long term strategy, but I'm just trying to get a better understanding of how your emotions play out in different situations).

I was making it too personal. I've adjusted my relative reality to see that anyone who puts their money into the market is putting a mark on their back. Anyone who believes that the monetary system is stable and valued properly-has a mark on their back. The warnings are all there, and I don't have to sell anything lol.

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  #8 (permalink)
 dark pool 
detroit+mi/usa
 
 
Posts: 18 since Mar 2015


artemiso View Post
Contrary to @Fat Tails, I disagree with most of what you've said.



That's not true. Electronic market makers are only competing to offer a better price than the next market maker. This means on a whole, all market makers make less and less money over time. Goldman used to make to the tune of $3 billion a year in this business of market making. Now by some estimates, the *entire* electronic market making industry makes $3 billion per year.

It's like how the invention of the internet has helped bring down insurance premiums because now insurance providers have to be more competitive as their pricing becomes more public and transparent. The winners are the users of this risk transfer mechanism, which include retail traders.

What worries me *slightly* about this is not the presence of electronic market makers, but rather that we have too few electronic market makers. We've seen 3 major electronic market makers disappear in the last 3 years. Today, essentially 4 firms trade against almost everyone else in the equity options market. That's like walking down the street and only having a choice of eating from McDonalds, Taco Bell, KFC or Burger King.



I suppose you are referring to derivatives when you speak of 'fictional assets'. There's nothing fictional about, say, a futures contract in orange juice. If you held it to delivery, you'd see your orange juice in storage facility. That seems to me the same as signing a contract to buy a house, seeing numbers in your bank account or accrual-based accounting. (In accrual-based accounting, your cash 'assets' decrease when you receive a piece of paper demanding for your money.)

Sure there's a metaphysical argument to be made that no one should be giving you a bag of fruit just because you reduced some numbers in your bank account statement, but that has the same level of philosophical circularity as saying that we don't need to wear clothes in public because nudity is a fictional invention of mankind.



A significant portion of people use the markets for good reason. To invest their retirement assets to overcome inflation risk; to protect their manufacturing or agricultural business from price fluctuations; to ensure they can deliver on a production contract that they had with another company. Risk doesn't go away, it can only be transferred from one party to another. Quite on the contrary, from your description, you're the one who's borrowing money from brokerages.

So what you're saying is the industry out-botted itself, that a flash freeze won't destroy the entire orange crop and that the Federal Reserve doesn't simply take loans out against itself, then have the American tax payer pay for it. About right?

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  #9 (permalink)
 mattz   is a Vendor
 
 
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Am I on futures.io (formerly BMT) or TS Elliot Forum? Just wanted to be sure.

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  #10 (permalink)
 dark pool 
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mattz View Post
Am I on futures.io (formerly BMT) or TS Elliot Forum? Just wanted to be sure.

Matt

Time to check dat out :P

*Edit. thanks for wasting my time. blocked.

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  #11 (permalink)
 artemiso 
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mattz View Post
Am I on futures.io (formerly BMT) or TS Elliot Forum? Just wanted to be sure.

Matt

Well the threadstarter's point is insightful though, if you slept with a fine woman, you should feel guilty that you're depriving someone else the chance of the same for that night. (I don't mean this with sexist undertones by the way, the ladies on futures.io (formerly BMT) can say the same of sleeping with a fine man.)

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  #12 (permalink)
 Big Mike 
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I've never once had even a single thought of guilt.

One has to look no further than the vendor review section on futures.io (formerly BMT) to know there is a large group of people that deserve to lose their money (deserve for me to take it trading).

Goldman et al take it from me, I take it from the rookies. It's the circle of life. Luckily there are always new rookies entering the market. On good weeks I take it from Goldman too

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  #13 (permalink)
 dark pool 
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Big Mike View Post
I've never once had even a single thought of guilt.

One has to look no further than the vendor review section on futures.io (formerly BMT) to know there is a large group of people that deserve to lose their money (deserve for me to take it).

Goldman et al take it from me, I take it from the rookies. It's the circle of life. Luckily there are always new rookies entering the market. On good weeks I take it from Goldman too

Sent from my phone

I think this was my attempt to make sure rookies understood what they were getting in to...but I think this forum in general does a pretty good job of that. Honestly though, I think the first thing a novice trader should be told is: "They are coming for you." Everything kinda makes sense after that.

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 tturner86 
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When I raced motorcycles I wanted to kill the other riders. In business I will behead a competitor in a heart beat. When I trade I feel no guilt, no remorse. I will gladly take their money and line my pockets with it, because they will do the same.

The market was created for one reason, to fleece the poor and pay the wealthy.

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 Big Mike 
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dark pool View Post
I think this was my attempt to make sure rookies understood what they were getting in to...but I think this forum in general does a pretty good job of that. Honestly though, I think the first thing a novice trader should be told is: "They are coming for you." Everything kinda makes sense after that.

It would mean more if you weren't a rookie yourself. It's really difficult to speak as an authority when you are just a rookie.

There are some things sim traders can still teach others, but seriously "profit guilt". ?? I'm done in this thread

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  #16 (permalink)
 dark pool 
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Big Mike View Post
It would mean more if you weren't a rookie yourself. It's really difficult to speak as an authority when you are just a rookie.

There are some things sim traders can still teach others, but seriously "profit guilt". ?? I'm done in this thread

Sent from my phone

Thanks! That actually lets me know something about the average nature of the trader. A person who does not question the morality/basis of what they do, is blind to certain bigger picture aspects. And a winning psychology needs to be guarded against intrusion of doubt, apparently.

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 asdfasdf 
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Big Mike View Post
I've never once had even a single thought of guilt.

One has to look no further than the vendor review section on futures.io (formerly BMT) to know there is a large group of people that deserve to lose their money (deserve for me to take it trading).

Goldman et al take it from me, I take it from the rookies. It's the circle of life. Luckily there are always new rookies entering the market. On good weeks I take it from Goldman too

Sent from my phone

Are you saying that Goldman, large banks, etc take it from you because of the amount of positions they can control at once, meaning that they in effect control the direction of the market ?

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  #18 (permalink)
 Anagami 
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dark pool View Post

This led me to adopt a psychology of "being a market sociopath". I had to accept the fact that for me to make money, someone out there was "losing money". I thought that most successful traders were "tricking" their morality in order to make money.

But this, as it turns out, is a path to loading yourself down with guilt over taking profit lol. Upon further reflection, I realized that anybody who enters the market is essentially a gambler. Once that money leaves their pocket and is in the market-it's no longer any individual's money. It is the markets money, and being made up of all our psychologies/fears/greeds-it will do what it does. I am merely an account operator who lends money to gamblers to play the game they love. Anything I'm missing?

Are you serious or are you joking?

The fact that both parties agree to every transaction makes the trading absolutely fair AND moral. Not sure why one should feel guilty when everybody is in agreement.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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 Anagami 
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dark pool View Post
Thanks! That actually lets me know something about the average nature of the trader. A person who does not question the morality/basis of what they do, is blind to certain bigger picture aspects. And a winning psychology needs to be guarded against intrusion of doubt, apparently.

Your reply to Big Mike is verging on idiotic.... I suspect that is because of your own subconscious guilt over your past life as you mention in your post.

Done with the thread.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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 Zxeses 
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dark pool View Post
I think this was my attempt to make sure rookies understood what they were getting in to...but I think this forum in general does a pretty good job of that. Honestly though, I think the first thing a novice trader should be told is: "They are coming for you." Everything kinda makes sense after that.

I totally understand where you are coming from, I feel this way every time I go to the local supermarket to buy eggs and milk.

When I was younger I was a farmer, so milk and eggs was a matter of getting my ass out of bed and going to milk the goat and pickup the fresh eggs. No money traded hands, and of course I had no concept of the idea of "work"="money", work was just something you did cause you had to do it. At my younger age, I never made the connection between the reward and the cost, it was just so much of a given there was no reason to think about it.

These days, when I pay ever-increasing prices for eggs and milk, knowing full well that the supermarket is taking 50% profit, that the farmer is doing much less work these days for a dozen eggs then I did, and yet here I am paying X dollars for eggs, what has changed really?

Did the supermarket cheat me by being an easy buy? not really, they are less then 5 minutes down the road.
Did the farmer cheat me by being an easy work load? not really either, he has more customers and production, he needs to make his business as efficient as possible.

So who really has given in here? have I been cheated? no, I appreciate the gift of an easy buy with no farm work, I can now wake up in the morning, fix a BLT (with a runny egg, you must try this!) and be off to work in less time so I can keep up my faster paced life.

When I trade, I keep all these things in mind (maybe it would be better said: all these things influence my view), especially trading futures.

Just because trading (the act) is easy, doesn't mean trading is easy (the risk/strategy) and for every dollar I make, I could have lost -- IF I didn't give it my best knowledge, skill, practice and patience -- which I would summarize as my "work". And just because you check 12 chickens butts at 5am in the morning doesn't mean you have a dozen eggs, it usually meant 2-3 eggs, and 9-10 new smudges of crap on your hand.

Just like trading S&P huh?


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  #21 (permalink)
 dark pool 
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Anagami View Post
Your reply to Big Mike is verging on idiotic.... I suspect that is because of your own subconscious guilt over your past life as you mention in your post.

Done with the thread.

"Sunconscious guilt". I'll take that into consideration. Yep, hide under someone else's shadow buddy. Don't let the door hit you on the way out.

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  #22 (permalink)
 dark pool 
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Zxeses View Post
I totally understand where you are coming from, I feel this way every time I go to the local supermarket to buy eggs and milk.

When I was younger I was a farmer, so milk and eggs was a matter of getting my ass out of bed and going to milk the goat and pickup the fresh eggs. No money traded hands, and of course I had no concept of the idea of "work"="money", work was just something you did cause you had to do it. At my younger age, I never made the connection between the reward and the cost, it was just so much of a given there was no reason to think about it.

These days, when I pay ever-increasing prices for eggs and milk, knowing full well that the supermarket is taking 50% profit, that the farmer is doing much less work these days for a dozen eggs then I did, and yet here I am paying X dollars for eggs, what has changed really?

Did the supermarket cheat me by being an easy buy? not really, they are less then 5 minutes down the road.
Did the farmer cheat me by being an easy work load? not really either, he has more customers and production, he needs to make his business as efficient as possible.

So who really has given in here? have I been cheated? no, I appreciate the gift of an easy buy with no farm work, I can now wake up in the morning, fix a BLT (with a runny egg, you must try this!) and be off to work in less time so I can keep up my faster paced life.

When I trade, I keep all these things in mind (maybe it would be better said: all these things influence my view), especially trading futures.

Just because trading (the act) is easy, doesn't mean trading is easy (the risk/strategy) and for every dollar I make, I could have lost -- IF I didn't give it my best knowledge, skill, practice and patience -- which I would summarize as my "work". And just because you check 12 chickens butts at 5am in the morning doesn't mean you have a dozen eggs, it usually meant 2-3 eggs, and 9-10 new smudges of crap on your hand.

Just like trading S&P huh?


I like that story about the farm. Incidentally I was planning on buying land and growing some of my own food hydroponically/or otherwise. Kind of going the opposite way I suppose-away from the marketing and noise. With your background, do you feel that food is proportionately valued with the rest of this market?

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  #23 (permalink)
 Zxeses 
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Anagami View Post
Are you serious or are you joking?

The fact that both parties agree to every transaction makes the trading absolutely fair AND moral. Not sure why one should feel guilty when everybody is in agreement.

Fair and moral have absolutely no connection. "fair" implies justice. Moral has nothing to do with justice or fairness. Moral is based on Love and is what is best for people, and many times justice and fairness have nothing to do with that. Just because the two co-incite with each-other often enough does not equate equality nor parity.

This may sound like a semantic argument, but definition here is important, there is no morality in capitalism, no matter how fair or just it is.

Trading is nothing more then one mans wisdom against another, regardless of what is exchanged -- money, wives, camels or gold...

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 Itchymoku 
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If you feel guilty then donate to charity. Isn't the money better off donated than in the hands of the super rich?

Trickle down effect doesn't really work as well as economist have thought. So, be the change you wish to see in the world.


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 pipandrun 
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tturner86 View Post
When I raced motorcycles I wanted to kill the other riders.

..such a bad boy you are?

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 pipandrun 
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@dark pool
I know what you mean, but did you ever consider this aspect:

Trading is a bet, a game. The conditions are clear: one side says the market rises, the other side says the market falls.
One will win. Why should the winner feel guilty now? He could be the looser, too. And where is the respect against the one, who has lost? Doesn´t it make it double hard for the one who has lost, if the winner now aditionally loads his feeling of "guilt" on him, too? This is why sportsmen and women shake hands after a game. Until nothing is manipulated and the winner doesn´t start to ridicule the looser, everything is ok, or?

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 dark pool 
detroit+mi/usa
 
 
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System View Post
This probably explains some otherwise great predictors producing low net profits and sometimes even losses. They fail to exit at targets.

I figured out what this guilt thing is about. I've heard so many stories about traders coming in, having a hard time, emotionally struggling-that I expected to do the same. But, as I kept my risk low and let my profits-I began to wonder if this was all there really was to it. I guess I felt guilty over "not paying my dues", and recognizing that something was wrong I scaled back and came here. This was risk control. I do not plan to pay my dues now, or ever. I will also admit that I was afraid of incurring my first drawdown, but I realize when it happens it'll happen and I'll push through it. Happy trading!

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 tturner86 
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..such a bad boy you are?

No love in war...

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  #29 (permalink)
JerseyJim
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@DarkPool:

You really think you have this all figured out, don't you? You're missing a few important chapters of your "here's how it works" fairy tale.

It's really very simple. If you're a trader, you're running a service business. Yes, even as a speculator you are providing a service. That service is price discovery. If you don't understand that then you have no right to even open a trading platform (or even a trading forum unless you're here to ask questions and learn). How do you think any market would work if there was no one willing to take the other side of a contract (or if you had to wait days, weeks or months for that contract to be filled)? Same way any business would work with little or no customers... business would grind to a halt and there would be no economy. I'll stop there because others have already addressed this point in more detail and I choose to help you understand something else.


dark pool View Post

...Upon further reflection, I realized that anybody who enters the market is essentially a gambler. Once that money leaves their pocket and is in the market-it's no longer any individual's money. It is the markets money, and being made up of all our psychologies/fears/greeds-it will do what it does. I am merely an account operator who lends money to gamblers to play the game they love. Anything I'm missing?

Any consistently profitable trader is NOT a gambler. That trader is a business person. Sure, many gamblers come to the market... but most don't stay long... and not just because there aren't any free drinks or .99 cent shrimp cocktail. If you insist on equating what we profitable traders do as "gambling" then maybe this analogy will work better for you; we are not gamblers, we are THE HOUSE. Like a casino, we operate with an edge; and like a casino we exploit that edge (not any particular market participant) over time. And over time the law of large numbers says we will come out winners. As a "new trader" if you don't develop an edge and learn to think this way you will not last. (Thanks for the money by the way ).

Finally, the money I choose to risk IS NOT the market's money, it's MY money. It's working capital that I control. I can hit "buy" or "sell" on my keyboard and have my orders filled almost instantly to open OR close any order because of other traders who are willing to provide that price discovery/liquidity service.

Not trying to come across as an @sshole, just trying to help you understand that you're not doing any deep thinking here... you're just fantasizing and trying to make a story up about what's going on in the markets... and that story fits what you WANT to believe. It's not really that complicated.

If I haven't been helpful to you here and you really do want long-term success in the markets, good luck because you're going to need more than your share for this to work out for you. In fact, here's another psychological project for you to consider... try trading for longer than a few months and then come back and tell us what it feels like to lose everything when your luck runs out.

Jim

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 Itchymoku 
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You guys are also forgetting another thing. When you exit the market with a profit it doesn't mean someone else exited with a loss. It could mean you exited while someone else entered. Even if you did exit with a profit and are matched with someone else that exited it doesn't mean they have a loss either. Their trade could be the other half of a hedged position in another asset.

This is a very rough example so bear with me:
For instance, lets say someone bought x amount of shares of Exxon Mobil but wanted to offset the price of oil affecting their trade so they sell x amount of oil too (this is assuming there's a positive correlation between Oil and Exxon mobil). Exxon Mobil shoots up 10 dollars and oil shoots up 5, so the difference is a net gain of 5. Even though the trader loss some money on their oil trade they're net positive.

That being said, you can't really tell what's going on the other side of a trade or how your trades affect other people in the anonymity of the market. Either way, if you don't take the other side of the trade someone else eventually will be it bot or human.

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 dark pool 
detroit+mi/usa
 
 
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JerseyJim View Post
@DarkPool:

You really think you have this all figured out, don't you? You're missing a few important chapters of your "here's how it works" fairy tale.

It's really very simple. If you're a trader, you're running a service business. Yes, even as a speculator you are providing a service. That service is price discovery. If you don't understand that then you have no right to even open a trading platform (or even a trading forum unless you're here to ask questions and learn). How do you think any market would work if there was no one willing to take the other side of a contract (or if you had to wait days, weeks or months for that contract to be filled)? Same way any business would work with little or no customers... business would grind to a halt and there would be no economy. I'll stop there because others have already addressed this point in more detail and I choose to help you understand something else.



Any consistently profitable trader is NOT a gambler. That trader is a business person. Sure, many gamblers come to the market... but most don't stay long... and not just because there aren't any free drinks or .99 cent shrimp cocktail. If you insist on equating what we profitable traders do as "gambling" then maybe this analogy will work better for you; we are not gamblers, we are THE HOUSE. Like a casino, we operate with an edge; and like a casino we exploit that edge (not any particular market participant) over time. And over time the law of large numbers says we will come out winners. As a "new trader" if you don't develop an edge and learn to think this way you will not last. (Thanks for the money by the way ).

Finally, the money I choose to risk IS NOT the market's money, it's MY money. It's working capital that I control. I can hit "buy" or "sell" on my keyboard and have my orders filled almost instantly to open OR close any order because of other traders who are willing to provide that price discovery/liquidity service.

Not trying to come across as an @sshole, just trying to help you understand that you're not doing any deep thinking here... you're just fantasizing and trying to make a story up about what's going on in the markets... and that story fits what you WANT to believe. It's not really that complicated.

If I haven't been helpful to you here and you really do want long-term success in the markets, good luck because you're going to need more than your share for this to work out for you. In fact, here's another psychological project for you to consider... try trading for longer than a few months and then come back and tell us what it feels like to lose everything when your luck runs out.

Jim

Lol u sound mad. I hope u trade this way xD.

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  #32 (permalink)
 josh 
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JerseyJim View Post
Any consistently profitable trader is NOT a gambler. That trader is a business person. Sure, many gamblers come to the market... but most don't stay long... and not just because there aren't any free drinks or .99 cent shrimp cocktail. If you insist on equating what we profitable traders do as "gambling" then maybe this analogy will work better for you; we are not gamblers, we are THE HOUSE. Like a casino, we operate with an edge; and like a casino we exploit that edge (not any particular market participant) over time. And over time the law of large numbers says we will come out winners.

There are gamblers who are addicted and harm themselves. Then, there are gamblers who play to win, and have an edge against other players. Small business owners gamble in the sense that they take risk. As a speculator, which you are, you are a gambler. If that has a negative connotation to you, then consider what a gambler really is. So much of what we do on a day to day basis is a gamble.

But you are not the house. The house has fixed rules, can change the rules, and can truly exploit the laws of probability because their edge does not change. As a trader, a speculator, you cannot do this.

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 tturner86 
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dark pool View Post
Lol u sound mad. I hope u trade this way xD.

We know how you trade, scared of profit.

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 josh 
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dark pool View Post
Lol u sound mad. I hope u trade this way xD.

I think you probably rub others the wrong way a little bit, because you sound a little bit smug and have a bit of a naive view of certain things. No disrespect from me though, best of luck to you.

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JerseyJim
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dark pool View Post
Lol u sound mad. I hope u trade this way xD.

No, I'm not mad. Just pointing out your obvious misconceptions about marketplace activity. The fact that you think I sound mad is your own preconceived notion, just like your market fairy tale. If you don't learn to overcome these needs to know why everything is happening you will fail.

The markets are not a classroom where we makeup our version of what we think is happening (or what happened in the past) in a research paper. They're a place for buying and selling... and the reasons for that buying and selling are infinite. Any primal emotions attached to that activity (like guilt over profit ) are just a hindrance to you becoming a success. If you were running a store selling sunglasses would you feel guilty every time someone came in and bought a pair? If so, better to go wait tables while you do your deep thinking about markets and leave your money out of it.

As a human it's primal to need to know "the story" about everything. This is a negative trait in trading markets. All you need to know are the basics about how a market works, what price actually is, and how to develop (and exploit) your edge.

Again, think about what I (and others) have said to you and then decide if you even have a reason for feeling guilty about having a profit. And better yet, what emotion are you going to feel when you lose and have to stop. Are you going to be one of the degenerate gamblers who thinks he's figured it out, refuse to listen to experienced professionals, and then come back with more money to lose having learned nothing?

Jim

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JerseyJim
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josh View Post
But you are not the house. The house has fixed rules, can change the rules, and can truly exploit the laws of probability because their edge does not change. As a trader, a speculator, you cannot do this.

Not true. In my own trading I am the ultimate rule maker with total control. Trading begins and ends with me. If the game changes and I don't have an edge anymore I don't play. I find someplace where I do have an edge (or my previous edge will perform) and trade there.

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 gregid 
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JerseyJim
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tturner86 View Post
We know how you trade, scared of profit.

LOL... well said.

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  #39 (permalink)
 dark pool 
detroit+mi/usa
 
 
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JerseyJim View Post
No, I'm not mad. Just pointing out your obvious misconceptions about marketplace activity. The fact that you think I sound mad is your own preconceived notion, just like your market fairy tale. If you don't learn to overcome these needs to know why everything is happening you will fail.

The markets are not a classroom where we makeup our version of what we think is happening (or what happened in the past) in a research paper. They're a place for buying and selling... and the reasons for that buying and selling are infinite. Any primal emotions attached to that activity (like guilt over profit ) are just a hindrance to you becoming a success. If you were running a store selling sunglasses would you feel guilty every time someone came in and bought a pair? If so, better to go wait tables while you do your deep thinking about markets and leave your money out of it.

As a human it's primal to need to know "the story" about everything. This is a negative trait in trading markets. All you need to know are the basics about how a market works, what price actually is, and how to develop (and exploit) your edge.

Again, think about what I (and others) have said to you and then decide if you even have a reason for feeling guilty about having a profit. And better yet, what emotion are you going to feel when you lose and have to stop. Are you going to be one of the degenerate gamblers who thinks he's figured it out, refuse to listen to experienced professionals, and then come back with more money to lose having learned nothing?

Jim

Yes, the price is always correct. As a projection of what human beings THINK is the value of a certain item. That value is RELATIVE to the changing world. So the projection is not always "correct". The market does not always have the correct information. You could even argue that the market NEVER has the correct information-that it is it's BEST GUESS. Price bubbles could not occur if this was not the case. Does that clarify the nature of price for you, my friend?

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  #40 (permalink)
JerseyJim
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dark pool View Post
Yes, the price is always correct. As a projection of what human beings THINK is the value of a certain item. That value is RELATIVE to the changing world. So the projection is not always "correct". The market does not always have the correct information. You could even argue that the market NEVER has the correct information-that it is it's BEST GUESS. Price bubbles could not occur if this was not the case. Does that clarify the nature of price for you, my friend?

First of all, I'd like you to point out in my posts to you where I said ANY of the things you said above. Take your time, you're going to need a lot of it because they don't exist.

Once again you are trying to make up a story about why I said what I said instead of reading what was actually said. Seriously, you have a major character flaw (as far as trading is concerned).

Sorry to have tried to help you... best of luck to you.

Jim

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 dark pool 
detroit+mi/usa
 
 
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josh View Post
I think you probably rub others the wrong way a little bit, because you sound a little bit smug and have a bit of a naive view of certain things. No disrespect from me though, best of luck to you.

Thanks. I believe having a holistic, empirically derived INDIVIDUAL world view is absolutely necessary to being able to make rational decisions. Everyone has a reality, and they would like to believe that reality is THE reality-and when things come up that don't match up with that reality, the emotions start. That's why I look at everything from an intent standpoint. What does this person stand to gain from making this statement, what is he/she communicating about their emotional mental state. I believe this is all translated into market behavior, and that it is reflected in our instruments.

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 Big Mike 
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That guy was clearly here only to troll, and is now banned.

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JerseyJim
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Big Mike View Post
That guy was clearly here only to troll, and is now banned.

Sent from my phone

Yeah, sorry to feed him. Really thought I was trying to help him til the last post.

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 josh 
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JerseyJim View Post
Not true. In my own trading I am the ultimate rule maker with total control. Trading begins and ends with me. If the game changes and I don't have an edge anymore I don't play. I find someplace where I do have an edge (or my previous edge will perform) and trade there.

"The house" is always open for business. It doesn't have to find new places to do business. It has no human emotions to interfere with probabilities. It puts money at risk with a guarantee of a positive return, given a sufficient time horizon and proper capitalization. It designs the game, and sets the edge it holds in each game.

You may, as you said, have to suspend business if your edge is not present. You have human emotions that interfere with your edge. You have no guarantee of a positive expectancy, because, while you can choose which game to play and how much to risk, you do not define or control the game, and thus your edge is variable.

You have total control over yourself, but you have zero control over the game. You are not "the house."

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  #45 (permalink)
 tigertrader 
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Big Mike View Post
That guy was clearly here only to troll, and is now banned.

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op's moniker was an obvoious misnomer; should have been "dark stool"!

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JerseyJim
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josh View Post
"The house" is always open for business. It doesn't have to find new places to do business. It has no human emotions to interfere with probabilities. It puts money at risk with a guarantee of a positive return, given a sufficient time horizon and proper capitalization. It designs the game, and sets the edge it holds in each game.

You may, as you said, have to suspend business if your edge is not present. You have human emotions that interfere with your edge. You have no guarantee of a positive expectancy, because, while you can choose which game to play and how much to risk, you do not define or control the game, and thus your edge is variable.

You have total control over yourself, but you have zero control over the game. You are not "the house."

Again, untrue. In the past 10 years I have never been closed. Yes the possibility is there but it is also there for any other "house". Would you like a list of casinos that have permanently closed their doors? Casinos do close due to being unprofitable. BTW they also have human emotions in the form of the people that own and are employed by them. Their probabilities are not completely guaranteed... that's why they spend so much money on security. They also don't get to completely control their game... they have state and federal regulators that can change the rules at any time. There are variables in every business including the gaming industry.

I design my game(s) and have just as much of a guarantee of positive expectancy as any casino does as long as I'm playing. In fact, the longer I play the game the closer I get to those values (just like the house). Every part of my "game" is researched and systematized, including my risk. I can tell you exactly how much I expect to make (on average) for every trade placed. Over the past 8 years these numbers have been eerily correct.

I don't expect you to agree with me because for whatever reason you have your own beliefs about this, but I hope you can see that my analogy of being the house is a lot closer to truth than not.

I am the house.

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emini2000
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That guy was clearly here only to troll, and is now banned.

Seriously. Profit guilt? Now I've heard everything.

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 Anagami 
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Fair and moral have absolutely no connection. "fair" implies justice. Moral has nothing to do with justice or fairness. Moral is based on Love and is what is best for people, and many times justice and fairness have nothing to do with that. Just because the two co-incite with each-other often enough does not equate equality nor parity.

This may sound like a semantic argument, but definition here is important, there is no morality in capitalism, no matter how fair or just it is.

Trading is nothing more then one mans wisdom against another, regardless of what is exchanged -- money, wives, camels or gold...

LMAO Morality is most definitely NOT based on love. Ethics is a matter of utility (the Utilitarian theory i.e. John Stuart Mill) or respect for reflexive rationality (i.e. Kant's deontology), or simply a matter of functional virtue (i.e. Aristotle and the Greeks).

Stop embarrassing yourself.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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 tigertrader 
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JerseyJim View Post
Again, untrue. In the past 10 years I have never been closed. Yes the possibility is there but it is also there for any other "house". Would you like a list of casinos that have permanently closed their doors? Casinos do close due to being unprofitable. BTW they also have human emotions in the form of the people that own and are employed by them. Their probabilities are not completely guaranteed... that's why they spend so much money on security. They also don't get to completely control their game... they have state and federal regulators that can change the rules at any time. There are variables in every business including the gaming industry.

I design my game(s) and have just as much of a guarantee of positive expectancy as any casino does as long as I'm playing. In fact, the longer I play the game the closer I get to those values (just like the house). Every part of my "game" is researched and systematized, including my risk. I can tell you exactly how much I expect to make (on average) for every trade placed. Over the past 8 years these numbers have been eerily correct.

I don't expect you to agree with me because for whatever reason you have your own beliefs about this, but I hope you can see that my analogy of being the house is a lot closer to truth than not.

I am the house.

one of the most specious arguments, i have ever read; although i do like your subs. just because you claim to be a player that has built positive expectation into his game, doesn't make you the house. and, it certainly doesn't mean that you possess an edge, certainly not in the literal sense. all it means is that unlike the majority of other traders, (who are their own worst enemy) you have developed a reason based approach to trading that is not driven by emotion and bias. that certainly does not qualify you to claim to be the house. you are just a player who is a willing winner, who occasionally loses. the minute you think you think you have an edge over the market, or you are even on a level playing field with market, the closer you are to ruin. eight years is a drop in the bucket in the life of a trader, especially ones who does not recognize that humility is the most powerful currency to prevent the house from collecting a larger toll than you should pay. the market will eventually evolve from it's current state to another vastly different form, and it is you, the player, who will have to adjust. the market is the house.

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 Zxeses 
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Anagami View Post
LMAO Morality is most definitely NOT based on love. Ethics is a matter of utility (the Utilitarian theory i.e. John Stuart Mill) or respect for reflexive rationality (i.e. Kant's deontology), or simply a matter of functional virtue (i.e. Aristotle and the Greeks).

Stop embarrassing yourself.

Ack! You spit out Athiesm as if it were fact, that perverts like Aristotle even know what love is, much less the origin of morality. This is clearly off topic, so my only direct reply to your insult is... I love you.

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JerseyJim
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one of the most specious arguments, i have ever read; although i do like your subs. just because you claim to be a player that has built positive expectation into his game, doesn't make you the house. and, it certainly doesn't mean that you possess an edge, certainly not in the literal sense. all it means is that unlike the majority of other traders, (who are their own worst enemy) you have developed a reason based approach to trading that is not driven by emotion and bias. that certainly does not qualify you to claim to be the house. you are just a player who is a willing winner, who occasionally loses. the minute you think you think you have an edge over the market, or you are even on a level playing field with market, the closer you are to ruin. eight years is a drop in the bucket in the life of a trader, especially ones who does not recognize that humility is the most powerful currency to prevent the house from collecting a larger toll than you should pay. the market will eventually evolve from it's current state to another vastly different form, and it is you, the player, who will have to adjust. the market is the house.

I appreciate your concern and attempt to help me see the “error of my ways”, but believe me it’s unnecessary. I am more than aware of the pitfalls of this business, even after “only” a decade.

I learned to embrace uncertainty a long time ago, well before pursuing trading as even a part-time vocation. I am the humblest person you’ve (n)ever met. I have no ego and know that everything can be taken away. I worked in an industry for 25 years where even the top performers were “churned and burned”. After 25 years I couldn’t take the motion sickness or salve for the burns anymore, so I “semi-retired”. I see you’re from the Philly area too… I don’t know how long you’ve lived here but maybe someday I can buy you a beer (Dos Equis I presume) and we can chat about it.

As far as my argument being specious, you’re entitled to your opinion but I’m not here to argue with anyone (and shouldn’t have to). This issue is really black and white with no shades of grey.

People believe “the market” is a lot of things. Most of these beliefs are not true, just bogeymen created to scare new participants into either staying away or acting in a certain manner if they choose to proceed. The market is not a bogeyman, it’s not a thief, it’s not a bully, and it certainly is NOT the house. Unless by “house” you mean the figurative place where traders gather to trade, and we both know that’s not the terminology being used here.

The market is just a facilitator with absolutely no interest in the game. Not only does the market not have the ultimate edge, the market has absolutely no discernible edge except for the participants who choose to trade without one… therefore the market can not be the house. Yes, I do have an edge over “the market” because the market is only a collection of buyers and sellers; and if I didn’t think I had an edge over at least some of them then there is no reason for me to trade.

At best the market is a landlord that collects a rent from traders who choose to trade. How much rent you pay depends upon how good (or bad) of a trader you are. There is certain “rent” paid by everyone, and some choose to pay more by losing more than they should. Some of those participants do it on purpose, like commercial hedgers whose profits are collected outside of the market in their own industry, and some do it over the long run by not having an edge.

If you know you have an edge and can exploit that edge over the long term, then like me, you are the house… just like a casino. If you can’t tell me what your edge is then you don’t have one and you are a gambler playing a game with negative expectation over time… like a gambler inside a casino. The market doesn’t decide either of these paths… only the individual trader can.

The fact that I even get a small amount of pushback from any professionals over this is very baffling to me. I guess I can just consider it another part of my edge.

No matter how you feel about my analogy the offer of the beer stands…

Jim

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 tigertrader 
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the lone trader does his analysis and doesn't worry about being taken because he is just one guy trying to make a few trades. and then his setup happens and he takes his position…and the market does exactly the thing that will cause him the biggest loss. how can this be? he thinks. He is just one clown trying to clip a few ticks or points, here and there, not worthy of being a target. But he starts to suspect that maybe he is just one of a thousand clowns, or ten thousand, who are all doing exactly the same analysis at precisely the same time and taking the same positions, which are exploited by a better algo in a co-located box somewhere with huge backing. this "thousandth clown theory" starts to gnaw at him, makes him doubt - quoted from vic tor niederhoffer

a trader puts on a bond position only to learn later that day that the minutes of the fomc were released secretly to 100 politicians and bank officials, on a "need-to-know basis, and they were acting on it 10 hours before the release.

you're trade opm and you are long up the wazoo, and the market is against you. the floor governors at the cme are well aware of this fact, and fade your position, right before they raise margins, and force you out of your position.

the market exacts a toll from your every action. you take less risk, there is a premium you must pay to the market, in reduced profits. the fact that you can eerily predict your average return and that your returns are not "lumpy" implies that very scenario. you are paying a premium to the market to ensure that your profits conform to an average, at the expense of potential larger profits.

you have no control over the market environment, only yourself. but, to a great degree the market does exert an influence over the way you approach and trade it.

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 US Bond Trader 
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JerseyJim View Post

If you know you have an edge and can exploit that edge over the long term, then like me, you are the house… just like a casino. If you can’t tell me what your edge is then you don’t have one and you are a gambler playing a game with negative expectation over time… like a gambler inside a casino. The market doesn’t decide either of these paths… only the individual trader can.

I don't necessarily think that having an edge makes you the house. A card counter can get an edge in blackjack but that doesn't make him the house. A commodity producer may have an edge over most people because the have information that most people don't have access to, but that doesn't make them the house. Not unless you are involved in every single hand the way the casino is. A trader, or a gambler for that matter, may have a positive expectancy though.



JerseyJim View Post

No matter how you feel about my analogy the offer of the beer stands…

What is this about free beer?

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 tturner86 
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If the exhange is the house, brokers are dealers, and the game is the product you trade. What does that make the trader...

One of the biggest illusion we cast upon ourselves is that we are in control.


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 josh 
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tturner86 View Post
What does that make the trader...

Haven't you heard? The trader, positive expectancy firmly in hand (and receiving hard earned and well deserved attaboys for this accomplishment), repeats the phrase "I am the house," defying logic and good reason, and it is so.

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JacLau
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If the exhange is the house, brokers are dealers, and the game is the product you trade. What does that make the trader...

The market is the house/casino, the exchange is the tax collector, brokers are junkets that bring in the players. the game is the product you trade. Traders play the game, either as the dealer or gambler.

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 Big Mike 
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I would say the Exchanges are the house.

Mike

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JerseyJim
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Big Mike View Post
I would say the Exchanges are the house.

Mike

Most do, but I don’t.

To operate as the house (as this original analogy began, as a traditional casino full of negative expectation games) an exchange would have to actually be in the game. In my view the exchange doesn’t qualify because it is just a facilitator… another cost of doing business to get to the actual game.

An exchange might be the house who takes the rake in a poker room or a vig on a sports book, but not in a traditional casino where the house plays the game alongside the gambler, albeit with an edge.

When trading you have three choices… trade with an edge like a pro (house), trade without an edge like most retail (gamblers), or hedge (bet minimally to collect your comps).

One more thing to be perfectly clear… a pro can have an edge with ANY method… I’m not limiting the method from where this edge can come… fundamentals, technical, discretionary, mechanical, etc… It’s just tougher to define an edge with some methods than others and therefore harder to be sure you actually have one.

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JerseyJim
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Traders play the game, either as the dealer or gambler.

Exactly. And the dealers are a rep of whom? Or maybe the casinos you play in allow their dealers to play by their own rules.

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JerseyJim
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US Bond Trader View Post
What is this about free beer?

If you’re ever in the Philly area let me know… always willing to raise a glass with a fellow trader.

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JerseyJim
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tigertrader View Post
the lone trader does his analysis and doesn't worry about being taken because he is just one guy trying to make a few trades. and then his setup happens and he takes his position…and the market does exactly the thing that will cause him the biggest loss. how can this be? he thinks. He is just one clown trying to clip a few ticks or points, here and there, not worthy of being a target. But he starts to suspect that maybe he is just one of a thousand clowns, or ten thousand, who are all doing exactly the same analysis at precisely the same time and taking the same positions, which are exploited by a better algo in a co-located box somewhere with huge backing. this "thousandth clown theory" starts to gnaw at him, makes him doubt - quoted from vic tor niederhoffer

a trader puts on a bond position only to learn later that day that the minutes of the fomc were released secretly to 100 politicians and bank officials, on a "need-to-know basis, and they were acting on it 10 hours before the release.

you're trade opm and you are long up the wazoo, and the market is against you. the floor governors at the cme are well aware of this fact, and fade your position, right before they raise margins, and force you out of your position.

the market exacts a toll from your every action. you take less risk, there is a premium you must pay to the market, in reduced profits. the fact that you can eerily predict your average return and that your returns are not "lumpy" implies that very scenario. you are paying a premium to the market to ensure that your profits conform to an average, at the expense of potential larger profits.

you have no control over the market environment, only yourself. but, to a great degree the market does exert an influence over the way you approach and trade it.

A Victor Niederhoffer quote… thanks for the laugh! I find it very ironic that you chose to lecture me on humility in your first post and then use a quote from quite possibly the most pompous ass to ever place a trade. A man who went on full tilt, trading in areas where he himself admitted he had no reason being, causing him to blow up not once but twice in less than a decade and losing over $100 million of OPM the first time… and we don’t really know how much the second time because he only managed “off shore clients”. Plus the quote you selected is the best! Do you think he donned a rainbow wig, red nose and big floppy shoes when he said it? But enough about Victor “everyone who doesn’t think/trade like me is a clown” Niederhoffer… let’s get to the real point; your musings on my trading and risk management.

Exactly where/when did I say I don’t have lumpy returns? If you’ll take the time to read what I actually wrote you’ll see I said the numbers were eerily correct AFTER 8 years, not DURING the 8 years. I would think referring to the law of large numbers would make that clear, but to make it even easier for you to understand it means having 8 years worth of live trading data (all at once) to compare to the original models’ 30 year historical data set. I never said my returns were smooth. They are lumpy as hell. That's why most people can't do what I do... not because I'm some sort of market genius but because I can stand the pain and believe in my methods.

Good job inferring what I’m probably doing wrong to fit your viewpoint though. Should I call your comments the most specious argument I’ve ever read and then advise you to check your ego at the door? Not just because I don’t agree with an analogy but because they really are flat out wrong?

Look… I know I’ve only been trading for a decade and I haven’t had the opportunity to really prove myself by losing who knows how many millions or billions of OPM, but maybe there’s the most minuscule chance you should consider some friendly advice from me.

The next time you decide to “help” someone, please take the time to comprehend what they actually said, or at least ask for clarification instead of “inferring” what they are “implying”. I prefer to call it what it actually is, rushing to judgment without the facts. It’s probably never the best idea to use crystal balls, tea leaves or chicken bones to conjure up your images. Perhaps you should spend some time reflecting on your need to do this. (Even a big ol’ jungle cat market veteran like yourself can still develop and learn, can’t he?).

Since you like quotes from money managers here's one of my favorites:

It’s OK to be wrong… it’s not OK to stay wrong. – Barry Ritholtz

Jim

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 josh 
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Look… I know I’ve only been trading for a decade and I haven’t had the opportunity to really prove myself by losing who knows how many millions or billions of OPM, but maybe there’s the most minuscule chance you should consider some friendly advice from me.

Gary has been trading for 40 years, and routinely makes more in a few weeks (and chronicles it here on this forum, as it happens--see his $250K spoos trade earlier this year for an example) than most decent traders do in a year.

You can call vic whatever you like, but aren't you a little above your pay grade to be insulting anyone who has been as successful as vic, despite having blown up more than once? I mean, if you make as much money as he did, and can then not blow up, then you'd have room to point fingers. But I doubt you've made anywhere near what he did, or traded anywhere near the size that he trades, even now, as an "old guy." Isn't that worth some level of respect, regardless of other factors, at the very least to not call someone who has no idea who you even are, a "pompous ass"?

Isn't that a bit like a pinch hitter who consistently has 40 ABs a year, with a .280 average, calling out an all star who plays every day and routinely hits .300, but has a few down years, hitting .250, a "has been," when he is a "never was"?

Do you realize that you're insulting people who were actually meaningfully big players in their heyday (Gary has turned over a couple hundred million daily in stocks back when he wasn't such an old fogey, now he only leverages a few million in notional per day), when you're calling yourself "the house," despite your presence in the market not being a significant factor in any way?

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 tturner86 
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josh View Post
Gary has been trading for 40 years, and routinely makes more in a few weeks (and chronicles it here on this forum, as it happens--see his $250K spoos trade earlier this year for an example) than most decent traders do in a year.

You can call vic whatever you like, but aren't you a little above your pay grade to be insulting anyone who has been as successful as vic, despite having blown up more than once? I mean, if you make as much money as he did, and can then not blow up, then you'd have room to point fingers. But I doubt you've made anywhere near what he did, or traded anywhere near the size that he trades, even now, as an "old guy." Isn't that worth some level of respect, regardless of other factors, at the very least to not call someone who has no idea who you even are, a "pompous ass"?

Isn't that a bit like a pinch hitter who consistently has 40 ABs a year, with a .280 average, calling out an all star who plays every day and routinely hits .300, but has a few down years, hitting .250, a "has been," when he is a "never was"?

Do you realize that you're insulting people who were actually meaningfully big players in their heyday (Gary has turned over a couple hundred million daily in stocks back when he wasn't such an old fogey, now he only leverages a few million in notional per day), when you're calling yourself "the house," despite your presence in the market not being a significant factor in any way?

Vic and Gary have lost more then some of us will ever see...

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 Big Mike 
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@JerseyJim,

I see you list your favorite instrument as "forex"....

Still, before you start insulting others, why don't you show us your real-time trades (no delay BS) as well as share your wisdom on the macro view of markets -- and show us just how much better you are than the guy you insult. @tigertrader does that nearly every day for years. Whereas you've been here for all of five minutes. If you want to make it to ten minutes, then you'll need an attitude adjustment.

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 zander931 
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Big Mike View Post
I would say the Exchanges are the house.

Mike

The thread has now shifted from this topic a bit (perhaps I should let it lie...), but I just noticed your comment, Mike, and I completely agree (here's the house).

The entity that controls the play & sets the rules of any game should be considered the house.

It sounds like some are erroneously confusing the house with the house edge that casinos build into many of their games.

As the two aren't synonymous, a lone trader suggesting that he/she is the house is a bit ridiculous.

Of course, all of this talk is just anecdotal crap.

**Edit: An argument could perhaps be made for the CFTC / SEC, as well (something to think about, at least).

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 tigertrader 
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zander931 View Post
The thread has now shifted from this topic a bit (perhaps I should let it lie...), but I just noticed your comment, Mike, and I completely agree (here's the house).

The entity that controls the play & sets the rules of any game should be considered the house.

It sounds like some are erroneously confusing the house with the house edge that casinos build into many of their games.

As the two aren't synonymous, a lone trader suggesting that he/she is the house is a bit ridiculous.

Of course, all of this talk is just anecdotal crap.

**Edit: An argument could perhaps be made for the CFTC / SEC, as well (something to think about, at least).

exactly alex,

the house makes the rules, sets the odds to it's own advantage, and controls the distribution of returns of the game and the game's players; and, if, by some wrinkle of skill or fate the gambler wins consistently, the house will summarily eject him from the game as a cheat. the player has no control over the game itself, nor any of it's players other than himself, and does not control the distribution of returns of the game. a trader only has full control over his own destiny, but must still pay a vig to the market; real work involves friction.

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 tturner86 
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zander931 View Post
The thread has now shifted from this topic a bit (perhaps I should let it lie...), but I just noticed your comment, Mike, and I completely agree (here's the house).

The entity that controls the play & sets the rules of any game should be considered the house.

It sounds like some are erroneously confusing the house with the house edge that casinos build into many of their games.

As the two aren't synonymous, a lone trader suggesting that he/she is the house is a bit ridiculous.

Of course, all of this talk is just anecdotal crap.

**Edit: An argument could perhaps be made for the CFTC / SEC, as well (something to think about, at least).

The OP topic was too stupid to continue... so it morphed into something worth talking about...

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 tigertrader 
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JerseyJim View Post
A Victor Niederhoffer quote… thanks for the laugh! I find it very ironic that you chose to lecture me on humility in your first post and then use a quote from quite possibly the most pompous ass to ever place a trade. A man who went on full tilt, trading in areas where he himself admitted he had no reason being, causing him to blow up not once but twice in less than a decade and losing over $100 million of OPM the first time… and we don’t really know how much the second time because he only managed “off shore clients”. Plus the quote you selected is the best! Do you think he donned a rainbow wig, red nose and big floppy shoes when he said it? But enough about Victor “everyone who doesn’t think/trade like me is a clown” Niederhoffer… let’s get to the real point; your musings on my trading and risk management.
Jim

what i don't find ironic, but completely predictable instead, is that in lieu of using logic in your argument, you are instead, resorting to ad hominem attacks against a person you have never met, and who is not there to defend himself. victor is probably the most humble, self-effacing, and gracious human beings i have ever met. he is also one of the most successful and brilliant individuals i know. so, please allow me to return the favor in kind, which i don't believe anybody who has read your posts would find fault with; and in your case, there is no need to qualify the statement with "quite possibly"; because, it is definitely YOU, who is the most pompous ass to ever place a trade.

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 tigertrader 
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Big Mike View Post
I would say the Exchanges are the house.

Mike


FORTUNE -- Something about the Hunt brothers just doesn't inspire public sympathy. After taking a financial drubbing in their recent struggle to hang on to $4 billion worth of silver, both Nelson Bunker and brother William Herbert cried foul before congressional committees. They charged the New York Commodity Exchange's Board of Governors with "manipulative actions" that had crippled them. Stoically, both Congress and public managed to suppress any tiny quiver of compassion.
The Hunts' accusations were nevertheless quite pertinent and accurate. The chummy board members of the Comex -- as the New York exchange is called -- make up a club that had a powerful, personal, and collective interest in sending the price of silver into a tumble. They are still trying hard to mask their role as double agents-as governors and traders; rulers and ruled-in the seething Comex arena. All through silver's upward flight, they had stubbornly clung to their own short positions, binding them to being sellers at fixed future prices; and the carrying charges had come close to ruining them. But they found their remedy-by putting on their governors' robes in the exchange boardroom, switching regulations on their own trading, and neatly turning a misbegotten gamble into an assured success.


https://www.usatoday.com/story/money/business/2014/04/14/high-frequency-trading-cme-lawsuit/7708019/

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