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Retail traders vs professional traders
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Retail traders vs professional traders

  #11 (permalink)
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Fat Tails View Post
But at least, with Roulette everybody has the same losing probability.

And there is a best strategy to play Roulette. Only play once and put in everything you own. If you win, you have doubled up and leave the casino. Well, if you lose, you are left with nothing. But this is what is going to happen anyway, if you play all evening.

With a game like Roulette the best option is not to play, unless you do not play to win but for entertainment.

How many traders trade for entertainment only, and how many really focus on winning the game?

When I was young I fell in love with a french girl on a vacation. One night I went to the casino with my friends, she was not with us, so I told her to think about the number 7 exactly at 1.00 a.m. She did it, and the number 7 came out three times in a row at 1.00 a.m. exactly. I betted all the three times, and then I exited the casino and waited for my friends on the street, to avoid to give back the money I won ;-)

That was very entertaining, even if I won.

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  #12 (permalink)
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jagui View Post
When I was young I fell in love with a french girl on a vacation. One night I went to the casino with my friends, she was not with us, so I told her to think about the number 7 exactly at 1.00 a.m. She did it, and the number 7 came out three times in a row at 1.00 a.m. exactly. I betted all the three times, and then I exited the casino and waited for my friends on the street, to avoid to give back the money I won ;-)

That was very entertaining, even if I won.

So did you love her more after the 7 appeared 3x in a row? If she was a smart babe, she'd have told you her vibes made those spins happen and you would most likely be broke now if you continued to ask her to think about numbers. Love is blind and perhaps just as hazardous as gambling without a mathematical edge in your favor.

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  #13 (permalink)
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jonc View Post
Some questions which I were thinking about.

I am thinking for every $100 that enters the market, how many percent belongs to the 95% and how many belongs to the 5%?

Do the 5% manipulate the market to get their money or they are just smarter with their trading? If the 5% moves the market; eg to run all our stops, they must have a larger percentage of every $100 which enter the market? If they are the majority of the money entering the market will not there be less and harder for them take out of the market?

I recently read an article in reuters' site that said some 70% of equity market volume is executed by those "algobots", be it through stat.arb. strategies, front running w/ their sub-pennys, or flash trading that makes the slippage on your stops a wee bit more painful so, besides being better capitalized, i would not say THEY are "smarter" but do have a definite advantage on some aspects of trading, especially in equities ( i know there is no sub-pennying futures' contracts but anyone know if flash orders are affecting the futures' market orders? i am guessing not so much on the uber liquid ones like ES, perhaps CL as it also has tighter tick increments?)
beyond that, i am guessing that the solitary key punching "professionals" that are making coin are trading a lot more volume/capital, on average, than the average retail trader and oftentimes, or so i've heard, they are just looking to average a penny of profit per share. no doubt it would be even less for the algorithms. that said, it seems such a small amount of $ to take out of the market but i reckon still enough to keep 95% losing money.
of course, it doesn't mean you can't make money at the game and i really believe a lot of folks on futures.io (formerly BMT) are or soon will be in that 5%, just takes persistence, a bit of emotional control and enough capital (or sense to SIM trade) to pay for your trading education

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  #14 (permalink)
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Required Reading For all the Professional Gamblers

Required Reading For all the Professional Gamblers:


Amazon.com: Beat the Dealer: A Winning Strategy for the Game of Twenty-One (9780394703107): Edward O. Thorp: Books

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  #15 (permalink)
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I had been reading and following many threads in a number of trading forums which I think are the best place to understand traders and their behaviors, In doing so I hope that it will help to improve my own trading.

Occasionally I will come across someone who seems have success in trading and they will to an extent share the general concept of their trading method.

It occurred to me these few individual's methods are not something new. The methods always revolve around following the trend, buying on pull back, looking out for double top/bottom, take note of pivots and S/R etc etc. I will say about everyone uses these methods.

On the hindsight; looking the charts these methods do work. But when we try out these methods on our own, we failed miserably. And everyone will tell you it because you have bad risk and money management, you need to work on your discipline and psychology.

I come to concur the methods that work are open secrets and it is the individual executing these method that determine the success.

We tried those proven methods on sim and we so often get it right but that one time we take a live trade, the method did not work. How many time have the market stop you out only to go back and hit your intended profit target. These are common experiences, do many feels that if someone had taken a consistently opposite position from you every time he would be an extremely rich man?

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  #16 (permalink)
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jonc View Post

It occurred to me these few individual's methods are not something new. The methods always revolve around following the trend, buying on pull back, looking out for double top/bottom, take note of pivots and S/R etc etc. I will say about everyone uses these methods.

On the hindsight; looking the charts these methods do work. But when we try out these methods on our own, we failed miserably. And everyone will tell you it because you have bad risk and money management, you need to work on your discipline and psychology.

I come to concur the methods that work are open secrets and it is the individual executing these method that determine the success.

We tried those proven methods on sim and we so often get it right but that one time we take a live trade, the method did not work. How many time have the market stop you out only to go back and hit your intended profit target. These are common experiences, do many feels that if someone had taken a consistently opposite position from you every time he would be an extremely rich man?

definitely have those days when if someone faded every move i made, they would have had an extremely profitable day.
Surely, the rudiments of the methods that can work are out there, I reckon it is just a matter of, as you say, the individuals executing (and fine tuning) that particular method.
Personally, I don't SIM trade due to my psychological inadequacy to truly treat it as if it were real which would give rise to a habit of undue slack and with that, potential financial undoing. Instead, when trying out something new, I use small size and see how it goes in real time with real money. As it seems as if most folks are futures people here and one contract can be more than "small size" (sheesh, one CL can brutalize your account in 1 minute if you are on the wrong side of 10:30 Wednesdays), if you can trade equities, try out 100 USO when testing crude moves or 100 shares of SPY, IWM, QQQQ, DIA instead of 1 ES, TF, NQ, YM contract. Or, if you can emotionally treat your SIM account as if it is your very own blood, sweat and tears produced life sustaining cash, hit your trading systems with that SIM account.

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  #17 (permalink)
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Zoethecus View Post
So did you love her more after the 7 appeared 3x in a row? If she was a smart babe, she'd have told you her vibes made those spins happen and you would most likely be broke now if you continued to ask her to think about numbers. Love is blind and perhaps just as hazardous as gambling without a mathematical edge in your favor.

It was just the fun of one night. I'm a statistician so I knew the odds of roulette, that's why I left the casino when I was still holding the money in my hands! We laughed at this, but we were very "happy" together, we felt that something unusual existed between us... If I think about it, I still love her after 20 years! Please don't tell it to my girlfriend ;-)

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  #18 (permalink)
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http://www.tradingpitblog.com/2010/11/conversation-with-local.html

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  #19 (permalink)
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Metal,

That was some funny shit! I have to show it to my wife because all her friends have said the same thing. And I say "F**k" them.

Ryan

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