Why do they do it?

This is a discussion on Why do they do it? within the General Trading Chat forums, part of the Reception category; Originally Posted by trader_dante How about... Trade 1: You are a successful trader. Last year you made £260,000. (£5,000 each ...

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Old Jan 25, 2011, 1:47pm   #41
 
DionysusToast's Avatar
Joined Dec 2009
Re: Why do they do it?

Quote:
Originally Posted by trader_dante View Post
How about...

Trade 1:

You are a successful trader. Last year you made £260,000. (£5,000 each week on average) You earn a whole lot more than your university chums who all went into being Doctors and Lawyers. Everyone knows you are a success and you feel proud about that but you are also almost burnt out. You used to think that one day you would find a system, and then sit on a yacht with a laptop. Infact the first question you asked when you joined a trading firm early in your career was "Why is that guy at the back who makes £200k a week the first one in and the last one out??"

At any rate, you're earning well but you're working every hour watching the market because you realise that's what it takes. A day off? Yes, you took your Porsche for a spin down to the local Sainsburys last weekend. But you could only afford an hour because it was Non-Farm Payrolls later on and you need to feel the rhythm constantly when you are discretionary and not systematic.

Lately, your life has been a bit more stressful than usual and you struggle to stay constantly on the ball. You knew what you were letting yourself in for as soon as you realised that the professionals don't trade 5m pin bars when the RSI is at an extreme, with a nice little 2:1 R and a fixed stop loss in place - ad infinitum. Instead you know it requires constant focus, discipline, and decisiveness to make reactionary and discretionary decisions in the flow of a constantly changing price (and P&L)

The problem is, you haven't had any proper sleep for days (the new baby is crying all night) and you had a few losses last month. You usually never talk about losses but you were tired and you let these ones get to you and your wife started saying "what if it all went wrong one day..." when you told her.

Your three kids are at private school which is costing you £30k per term, the mortgage payments on your £2m house in Chiswick are about to get raised and your trader friends at JPMorgan think it's acceptable to do £1,900 on a bender at the weekend.

You think about all this but then you tell yourself, it shouldn't bother you because you have an edge, you've been profitable for 5 years straight now...you're a successful trader!!

Trade 2:

You are the guy above. You made it. But secretly you dream of cutting back, risking less and taking the pressure off a little. You are no longer 24 years old with your whole life ahead of you. You are late thirties now and you have responsibilities. Of course you are never going to stop trading. Why would you when you have a proven edge that works? But the risk is always there and you want to minimise that. At the same time you want your LIFE back. You don't want to be working all hours worrying about missing that one trade that might mean the difference between a winning and a losing month.

You figure you might be able to teach some people to do what you do. You actually quite like the thought of this. You weigh up the pros and cons. The cons are that it takes time to run a business like that and it also might affect your trading having to explain trades to others. The pros are that you get a supplemental income, risk free. Anyway, you try it out and you charge £150 per month for traders to shadow you. Before you know it, your skills speak for yourselves and you have 100 people in the room.

Now your Uni chums - they whisper to each other that you have lost your skills. And the last time you logged into T2W to do some marketing you found a post that said "those that can do, those that can't teach". It upset you a little. But then you check your bank at the end of the month and the £15,000 sitting in there cheers you up again. You are now making £180,000 a year.

You decide to start a website and you put all your informational material on it for those that can't spend all day in your trading room. A few months later you've got 212 people in there paying a further £99 a month. At the end of the year this has brought in £251,000 and combined with the room you're now getting on for making more each year than you made as a professional trader and taken absolutely zero risk to do so.

Your best friend that is the Director in a bank got a 20% wage increase last year. You took him out for a few drinks to celebrate, hardly daring to tell him that you got a 60% wage increase.

You still don't have much of a life, so you use some of your vast profits to pass all the maintenance onto a friend and then you start to sit back...Infact, you actually went out for dinner with your wife last week because your trading room shuts at the normal time of 5pm!!

Who is competent here?

Like trading, life is about risk versus reward.
Says the man who sleeps on the sofa next to his trading PC.
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Old Jan 25, 2011, 2:13pm   #42
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Re: Why do they do it?

I have to say vendors defending vendors isn't going to convince anyone.
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Old Jan 25, 2011, 2:21pm   #43
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Re: Why do they do it?

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Originally Posted by pboyles View Post
I have to say vendors defending vendors isn't going to convince anyone.
They'll be forming a vendors union next
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Old Jan 25, 2011, 2:25pm   #44
 
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Re: Why do they do it?

Quote:
Originally Posted by DionysusToast View Post
Says the man who sleeps on the sofa next to his trading PC.
LOL, I know...that essay above is not about me! I have no life whatsoever and I don't earn those sums of money for the privilege.

I'm just saying, all is not black and white.

The biggest mistake in thinking about trading is that "if you are a great trader you should be able to make millions".

People that think this are complete beginners.
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Old Jan 25, 2011, 2:28pm   #45
 
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Re: Why do they do it?

Quote:
Originally Posted by pboyles View Post
I have to say vendors defending vendors isn't going to convince anyone.
If that is aimed at me, I'm not defending anyone.

I'm sure there are way more scammers than trustworthy vendors. I'd bet everything I own on that.

I'm just saying that blanket statements are for the ignorant.

I try not to fall in that category.
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Old Jan 25, 2011, 3:08pm   #46
 
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Re: Why do they do it?

Quote:
Originally Posted by trader_dante View Post
The biggest mistake in thinking about trading is that "if you are a great trader you should be able to make millions".

People that think this are complete beginners.
Educate us mere mortals why a great trader can't make large sums of money.
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Old Jan 25, 2011, 3:10pm   #47
Joined Jan 2011
Re: Why do they do it?

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Originally Posted by Masquerade View Post
Educate us mere mortals why a great trader can't make large sums of money.
do you even trade?
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Old Jan 25, 2011, 3:25pm   #48
 
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Re: Why do they do it?

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Originally Posted by DashRiprock View Post
do you even trade?
No, I spend my life on T2W trying to sell courses. Why?

What's the answer to my question?
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Old Jan 25, 2011, 3:30pm   #49
Joined Jan 2011
Re: Why do they do it?

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Originally Posted by DashRiprock View Post
do you even trade?
sorry i did not mean that in a nasty way

but you said things like "a trade either being wright or wrong and" and "nobody that coaches can be a good trader cos if they were they be on a yacht with babes instead of helping soemone else" and "all successful traders are millionaires" and really this is not what i have seen in trading at all

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Old Jan 25, 2011, 3:32pm   #50
 
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Re: Why do they do it?

Quote:
Originally Posted by Masquerade View Post
Educate us mere mortals why a great trader can't make large sums of money.
Lack of courage to handle huge equity swings?

If I inherited £10M tomorrow I would not hesitate to deposit it all and bet my usual 5-10% per trade. I have no qualms about taking large losers because I cannot stand to have a large edge and not really go for the jugular. I always have had the confidence to bounce back no matter what. Thats my personality, which is probably the exception not the rule.

Presupposing that you have a similarly good edge (which you most likely dont) could you say the same?

One things for sure, I know overly cautious traders like Dante or Dion certainly couldn't. Which is why they will never be making millions from trading. So they will be confined to the realms of pnl mediocrity, despite being good traders. Thats ok i guess, making £40k a year whilst sitting at home as your own boss is cool. Not everyone is willing to risk it all to try to become the next Soros..
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