Of course this may be wrong thinking on my part. If I were perfectly right all the time you would see me on the top of Forbes list and not Bill Gates or Carlos Slim.
I was speaking for the 40 years experience, many at a firm that was a NYSE specialist for over 80 years.
I was looking from a different set of views. Trust me, the institutions we dealt with never sold because one of the senior partners needed to get some cash to pick up milk for the wife.
Our firm only interviewed from the top 5 business schools in the US. Did we miss some talent? Of course.
Were we always right? No.
Of course, since you were not applying for a position with our firm, you could say the boss is wrong, LOL.
But if one were competing with a top grad from Wharton for a job that started at $160,000 per year, the guy who told the chairman that the thinking of an 80 year firm was totally wrong, probably would not get the job.
Then again, the rejected candidate could always go out on his or her own and start a firm from scratch and make $20 Million.
My opinions are just that: opinions. And sometimes a person new to trading might want to know what one or two Billion dollar funds are thinking.
I am always willing to learn. If anyone wants to pick me up in their Gulfstream, land at Teterboro, and teach a few things, I listen.
One of the exercises at the place I used to work at, for new traders, was to come up with 5 reasons why someone might want to fade a trade. Of course, someone could quit that $160,000 job and say it was a stupid exercise.
Here is another tidbit. NEVER SELL A TRADE if you think it is going higher!
I know it is common to say, "But what if I want to take partial profits?" Sounds good. Makes sense.
Imagine running $100 Million, you are in charge of $10 Million. Your trade (in anything) is up 27 ticks or points. You sell $300,000 at x.
Your boss asks why? You say "to take some off the table." He asks why x. Do you think it is going higher?"
You say yes.
You better be prepared to answer why you did not try to sell at x + 3, or 5 or 11.
A trader at home sitting in his briefs can do whatever he wants. When accountability is there questions are asked.
A cool little show is Billions. If your boss is Bobby Axelrod and you sell, you better tell him why?
And he wants to know who you are trading against.
For most people, my thinking is absolutely wrong. Then again, 90% of traders lose money most of the time.
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The market was dropping. All of a sudden it stops and rallies 70 points.
Now maybe someone out there thinks their Fibonacci trading program that they bought online for $499.00 picked it up, and went long.
That is nice.
I hate to tell you guys but that other guy who goes around in a Gulf Stream might have a slightly better system for trading.
We should not say the system is rigged, but there are a hell of a lot of traders out there who hardly ever lose.
Please don't ask for names. No one will ever come to my Christmas parties, LOL.
Just don't be so trusting. Understand why some people struggle to make a few ticks and some are sitting around grabbing Millions of Dollars.
It just makes me sad to see so many innocent people out there buying books and thinking they can conquer the markets sitting at home by themselves.
Even though I no longer work on Wall Street, and yes I have actively seen the examples of the public getting fleeced, I still do not trade unless I know where some of the, we will graciously call them "the smart money" is going in.
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Just a suggestion as your understanding of retail trading is.. a bit behind the state of the art?
These days several on FIO trade within the larger context and are profitable. Nearly all of the useful journals are Elite as its a PITA having free members who don't care if they get banned being rude or failing to engage brain before putting mouth in gear. The nice thing about this site is its civilised.
You might find the ES Spoos thread valuable for example.
I really like the expression "failing to engage brain before putting mouth in gear".
That reminds me of my cousin. He really wanted (for some unknown psychological reasons) to make people believe he was an IT expert at coding, although he had actually never written a single line of code.
So whenever somebody talked about a certain OS aspect or perhaps a special feature on a new piece of hardware he'd go "yes, this sounds like it is a new feature but it was actually present on systems from 10 years ago". When you pressed him for specifics, he would go all vague.
His main pyschological drive was to sound like he was an "old school" person, with lots of wisdom to impart on others.
Even when nobody was actually interested.
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