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Who do you trade against?
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Who do you trade against?

  #21 (permalink)
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Rory View Post
An interesting choice of quote . Regrettably the writings of a phenomenally damaged woman who died alone.. so big old grain of salt. There was a real attempt to create Rand's "Galt's Gulch" in Chile where the best of humanity could live apart from the grubby and tyrannical in an idealised pure-capitalism utopia. It did not work out so well as you might expect in the real world. Ayn Rand's Capitalist Paradise Is Now a Greedy Land-Grabbing Shitstorm

Without this getting into too much of a philosophical/political debate , who she was doesn't automatically discredit the quote or her views. Any text should be considered and credited based on the writing itself before its simply thrown aside.

Regardless! I just find her view about people acting as "traders" as a virtue quite interesting. In essence there is a difference between equality and fairness that sometimes is lost.

Myself its helped me with losing trades as to not simply blame others or the market. The friction about trading against people all the time instead of seeing what we do (the act of a trade) is something to be valued and considered moral (versus that of taking without asking or on a basis of deception). The markets are pretty transparent place to conduct business so its a environment that i consider somewhat fair on that basis.

(i debated whether or not to even put her name just to see what people actually thought of the text without the association to a controversial author)

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  #22 (permalink)
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RielA View Post
Without this getting into too much of a philosophical/political debate , who she was doesn't automatically discredit the quote or her views. Any text should be considered and credited based on the writing itself before its simply thrown aside.

Regardless! I just find her view about people acting as "traders" as a virtue quite interesting. In essence there is a difference between equality and fairness that sometimes is lost.

Myself its helped me with losing trades as to not simply blame others or the market. The friction about trading against people all the time instead of seeing what we do (the act of a trade) is something to be valued and considered moral (versus that of taking without asking or on a basis of deception). The markets are pretty transparent place to conduct business so its a environment that i consider somewhat fair on that basis.

(i debated whether or not to even put her name just to see what people actually thought of the text without the association to a controversial author)

Of course and all credit to you if what you have works it works 'It is the mark of an educated mind to be able to entertain a thought without accepting it.' - Aristotle. To be honest, I recognised it's source instantly.

I guess I know a bit about the daughters/granddaughters (skips a generation sometimes) of psychopaths, one of my friends is one to start with. Females are different to males is my observation. She is fortunate in that her nice mum and extreme beauty has meant few don't give her what she wants, she has never needed to channel her darker nature so seems light and fluffy to all. Rand did not have that but shares the honesty males can lack.

For me I can't separate the source from the author though the ideas have intellectual value to me. Some thoughts from larger minds are like disease samples necessary for research. Like a certain billionaire (not a larger mind but..) we hear a lot from lately who is somehow the voice of the 'ordinary person', scores of trading 'gurus' who have never successfully traded their systems... Rand was not capable of accurately understanding the complete emphatic human so her model required removing the best from the world and letting the mundane to rot. You may recall the Who is John Galt? answer. https://www.youtube.com/watch?v=zN6JV2GXyvg

Regardless, Just my view which I would change given fresh insight. But certainly its those who seek to work in co-operation than against have the better time in trading and life I firmly agree.


Last edited by Rory; July 24th, 2016 at 04:27 PM. Reason: Typo
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  #23 (permalink)
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Its important to distinguish when critiquing Ayn Rand, are we speaking of her philosophy or her novels. Something I thought of much when reading through Atlas Shrugged was "yea great but what about the average joe?".

Ayn Rand on Esthetics sees Romanticism as the "highest" form of art, and therefore she wrote her novels in that styling. So thats why the characters in her books are so black and white with no real grey areas making it hard to see the real world views of her philosophy when only going by her novels. Also why its viewed as so extreme.

Basically the way i see it is that Objectivism views human life as scared in all regards. Any interactions between people should be voluntary and never forced. When referring to "moochers and looters" a moocher is one who asks with no intention to ever repay the favor and a looter is one who takes without asking. This is not just a view on material goods but social exchanges as well (relationships etc).


Quoting 
Rand was not capable of accurately understanding the complete emphatic human so her model required removing the best from the world and letting the mundane to rot

Her views had much emphasis on competence. She said that a person of virtue is one who wants to achieve as much as they can to the best of their ability. Simply, "win/lose do your best". Not everyone is a John Galt or a Hank Rearden but its the principle behind them that they value that can be attributed to everyone.

Given her respect for human life I dont believe she ever wanted the mundane to rot. Achievement of all kinds/levels are to be valued and is the best source of true self-esteem. Another way to relate that to trading is the same way we grade ourselves not on how much money we made or lost but our ability to execute and perform while in the markets. The better we do, the more success we have in those regards the higher our self-esteem and confidence and the better we trade.

Sorry im not able to go into much detail and some of this may be a little all over the place, im currently at work and jumping in and out writing this haha.

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  #24 (permalink)
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RielA View Post
Sorry im not able to go into much detail and some of this may be a little all over the place, im currently at work and jumping in and out writing this haha.

Refreshing diversion from trading chat, interesting and I understand your distraction haha, I'm in the same boat today. I'm helping design a sound studio in a community center. I am currently in what was the most violent part of "the murder capital of the world" 20+ years ago. Time passes and things change, usually for the better.

I shall however re-check my assumptions as its been a long time, ~26 years since I read Rand (seen the movies since of course). My first girlfriend's mum owned a US defense corporation, she advised me (I was 17, she 19) that to understand her mother I should read Ayn Rand's novels haha. Hard to believe the contrast between mother and daughter.

I have always interpreted the Galt's Gulch utopia as the classic psychopath fantasy. Winning does not matter as much as others losing (their hope taken away) and really knowing they have lost and are powerless. As they are detached they can give a good satellite viewpoint on humanity and if intelligent seem deeply wise and insightful (but its acting, emulation to better control).

I shall however look again at the philosophy side, sincere thanks for your thoughts on this


Last edited by Rory; July 24th, 2016 at 06:50 PM.
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  #25 (permalink)
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I find it refreshing as well, and usually i find more insight into my trading when discussing topics that are abstractly related. But its been quite a switch from the OP question haha!


Quoting 
I have always interpreted the Galt's Gulch utopia as the classic psychopath fantasy. Winning does not matter as much as others losing (their hope taken away) and really knowing they have lost and are powerless. As they are detached they can give a good satellite viewpoint on humanity and if intelligent seem deeply wise and insightful (but its acting, emulation to better control).

I however find it very hard to turn away from a good conversation and of course wouldnt mind continuing the conversation from this point here or PM!

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  #26 (permalink)
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Indeed and apologies to the OP

I'm on my way home but as the thread idea was "who do you trade against?"... I'm not obsessed with psychopaths but if you've ever been the target of one it is wise to understand them. It may be too late before you realise what your dealing with and the game your (involuntarily) playing. Afterwards you will likely see them coming a long way off. As a retail trader your safely in your home not a trading firm which is maybe a good thing

I read this interesting 2011 study last year that I just dug out. http://trace.tennessee.edu/cgi/viewcontent.cgi?article=1033&context=catalyst

Basically they tested three groups in a non-zero sum game. Bank stock brokers/traders, confirmed criminal psychopaths in prison and 'community' normal people.

If I remember it, the bank stock brokers were worse than the criminal psychopaths. Overall however, though individual gains were least for the 'community' traders their overall gain was the largest.

Edit: Just to add as it does not warrant a new post. When I trade I see the market as 'it' for all practical purposes. I don't think along lines of with or against people except maybe associating things with a large group and retail/commercial activities. Just a chart that has behaviors I have learned to predict the flow of.


Last edited by Rory; July 25th, 2016 at 07:36 AM.
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  #27 (permalink)
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You trade against someone who has an opposite view and/or opposing interest to you (hedger, commercial, etc).
The exchange brought you together so you can each capitalize according to your interest at that specific point in time.
As time progress once you are in the trade, others interact in a similar fashion where they exchange trades based on their own individual interests.

Those who took the opposite of your trade manage the trade just like you, and those who are experienced manage it better in my opinion. To an extent, your success of your individual trade is simply a reflection of your experience.
External factors of large trades, news, surprise announcements, etc. will affect your trading, but all participants are exposed to the same factors.

Your individual success depends on your ability to withstand losses, level of risk capital, and again in my opinion depends much more on your individual skills as oppose to constantly thinking if "others" manipulate your ability to trade.

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  #28 (permalink)
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How about using the term 'trading with" instead of against? After all you need the counter party to complete your trade, without him there is no trade. When you are selling your used car, and that is also a trade, you need someone to trade with, you don't say "I traded my used car against Jack."

Trading against kind of implies that the market is nothing but a big game of the bigger fool, the one who eventually will hold the bag. It is quite possible that both sides make money in the trade (or both sides eventually lose money) so there is usually no clear winner in 1 particular trade at the time of the trade....

That being said trading is like surfing, you are surfing with the waves/tides (or against the waves, if counter trend), but not against one particular water molecule....

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  #29 (permalink)
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This thread has taken a life of its own.

I thought I was teaching something with my 40 years in this business. I think I am learning more than I teach LOL.

I still trade and when I am about to take a position, one of the last things I think about is not so much whom I am trading against, as in "am I afraid of this person" but just to remember that I AM PLACING A BET AGAINST SOMEONE else.

Is there any reason why the other guy wants to go long if I am about to go short, for example?

One of the first things one of my mentors did a long time ago is make me flip a coin and buy 1,000 shares of a stock. He ran the post so there was no commission involved.

Now I had to manage the trade. If I was long by chance and the market "obviously" was going down I would get out immediately. Amazing how many times the stock would go up after I got out.

What he tried to get me to realize, and this guy Mark Douglas later wrote in a book was that every trade starts with ACCEPTING THE RISK in the market.

It is the SURE THING trades that kill you.

Don't want to tell stories out of school but I know people who lost when they had "inside information," you know, lawyers were at the board meetings. By the time the trade was being done one of the companies got cold feet. Guy lost $2.5 Million.

I saw a video by one web site about sure thing trades that can ruin a trader. Quite interesting.

So I guess I am saying that if we approach every trade as if the other side knows more than we do THIS TIME, we never get into the This trade cant lose syndrome.

The toughest thing for me has been holding the winners. Maybe it is because I like to find the "next good trade." LOL

TB

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  #30 (permalink)
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TheBenefactor View Post

if we approach every trade as if the other side knows more than we do THIS TIME,

There is a problem with this type of reasoning, namely, there is no way we can know why the other side took the trade. Maybe he is getting out with a huge profit holding the instrument for weeks, maybe he is hedging another position. Or maybe he just flipped a coin, and that told him to get out. Also both traders can be right, they might be just looking at different timeframes and different targets. Hell, maybe he needed cash and that is why he is selling, not because he is convinced the stock would tank...

Not to mention the facts that the other side of the trade is often times WRONG. So without knowing the reason and their skill set, there is absolutely no reason to assume they know more (well, unless you are a newbie) than you do.

Look at the whole current and not what the individual water droplets do...

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