Wall Street = Casino. Minus Sum Game.

This is a discussion on Wall Street = Casino. Minus Sum Game. within the General Trading Chat forums, part of the Reception category; Originally Posted by montmorencyt2w Yes, it's probably not surprising that spreadbetting companies are falling over themselves to provide clients with ...

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Old Jan 18, 2010, 1:10am   #101
 
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Re: Wall Street = Casino. Minus Sum Game.

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Quote:
Originally Posted by montmorencyt2w View Post
Yes, it's probably not surprising that spreadbetting companies are falling over themselves to provide clients with information and training about TA, and more indicators than you can shake a stick at.

I imagine they do not do this out of a sense of philanthropy, but I could of course be mistaken.
Spot on !

It makes people trade more for one thing and does little to get them on the right side of the trade.

All the time - the SB company captures the spread. I would wager that most don't need to lay off the bets as most punters would get stopped out by the 'wiggle' even if they got the direction right.

Also - let's not forget that money can be made without predicting the direction too, yet the whole industry focuses most on giving people crystal balls.
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Old Jan 18, 2010, 4:41pm   #102
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast - What is your point about earnings ?
I watch them and evaluate them for the stocks i'm watching, but i don't see any particular profit in the trading of the actual earnings - The institutions and the people that care have better connections and algorithms to react to that news too quick for the retail traders, earnings and there effects are very very efficient; usually it happens overnight too which makes it even harder.

So; You believe earnings are important to watch ? But for what purpose ? To identify a stock that, having had good earnings and gapping up has the POTENTIAL for momentum.

I'm just wondering the context of what you are saying; i totally agree with you as of yet, and i try to follow a lot of what you have said in my own trading - But are we talking about using fundamentals to identify potential movers for the days trading in trading INDIVIDUAL STOCKS OR to get a guage of sentiment OR to establish a fundamental trend for longer term trading of a market ?

What particular topic are you talking about ? - Day trading stocks and how you need fundamental filters to find movers for the day .... Or futures and how you need news to give sentiment and to identify the weight of a move or ?

Cheers.

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Old Jan 18, 2010, 4:48pm   #103
 
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Re: Wall Street = Casino. Minus Sum Game.

Dionysus, methinks you're wasting your time, most don't wanna be told
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Old Jan 18, 2010, 5:08pm   #104
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by arabianights View Post
Dionysus, methinks you're wasting your time, most don't wanna be told
Isn't she lovely.

Because being random, is ok.

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Old Jan 18, 2010, 5:26pm   #105
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by GladiatorX View Post
Isn't she lovely.

Because being random, is ok.

Not you old boy, I think you can be told
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Old Jan 18, 2010, 5:32pm   #106
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by arabianights View Post
Not you old boy, I think you can be told
I was just being random; nothing to do with the context of the thread.

(Hopefully this sticks... although so far it doesn't seem too cool)

(OMG HE WINKED AT ME )
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Old Jan 18, 2010, 10:52pm   #107
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread
Quote:
Originally Posted by GladiatorX View Post
DionysusToast - What is your point about earnings ?
I watch them and evaluate them for the stocks i'm watching, but i don't see any particular profit in the trading of the actual earnings - The institutions and the people that care have better connections and algorithms to react to that news too quick for the retail traders, earnings and there effects are very very efficient; usually it happens overnight too which makes it even harder.

So; You believe earnings are important to watch ? But for what purpose ? To identify a stock that, having had good earnings and gapping up has the POTENTIAL for momentum.

I'm just wondering the context of what you are saying; i totally agree with you as of yet, and i try to follow a lot of what you have said in my own trading - But are we talking about using fundamentals to identify potential movers for the days trading in trading INDIVIDUAL STOCKS OR to get a guage of sentiment OR to establish a fundamental trend for longer term trading of a market ?

What particular topic are you talking about ? - Day trading stocks and how you need fundamental filters to find movers for the day .... Or futures and how you need news to give sentiment and to identify the weight of a move or ?

Cheers.

I used earnings as an example.

- Earnings are one of many things you should watch.
- The guidance that comes alongside those earnings is more interesting.
- Market makers/specialists do mark earnings stocks up/down at the open so that if they do become seller/buyer of last resort, then they do so at a price that doesn't get them kiled. Note that they only become best bid/ask if no-one else does. When they become inside bid/ask, they control the price
- if an MM/specialist does become buyer/seller of last resort - they will try to make their losses back
- Algos do nothing to stop you making money from a move, even an earnings move - check out Mr Charts thread
- Earnings can be used in a number of ways - swing traders may want to avoid an entry around earnings time.

Earnings is just an example of 1 predictable thing that can affect price. Understanding the markets will show you that there are many such things.

How you use such information - day trading, swing trading is up to you.

Not using it can cause you losses that you could have foreseen.
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Old Jan 20, 2010, 1:20am   #108
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread From another thread but quoted because it is put so eloquently

Quote:
Originally Posted by montmorencyt2w View Post
As they say:
"A million here, a million there, and pretty soon you're talking about real money.”

(Widely quoted, e.g. in the article linked below)


Offshore Asset Protection BLOG - Bob Bauman: Millions, Billions, Trillions - You're Talking Real Money


According to Gary Norden ("Technical Analysis and the Active Trader") the reason technical traders are always going on about their psychology is that TA is so unreliable. The majority of retail traders (and especially newer traders) are trading technically. Most trading "education" (especially that pushed by the brokers) is in technical trading. People are encouraged to believe that everything they need to know about the market is contained within the price. They come to believe, and are not discouraged in this belief, that technical analysis has been "proved" scientifically. (He quotes several studies which tend to disprove this). Since the majority of (especially new) traders lose, and since the majority are using TA, and since they have been told that TA "works", they think to themselves "It must be me who's at fault. My psychology is all wrong. I need to get into the zone ..." (or whatever).

As I've said elsewhere, I think he somewhat overstates his case (not all technical traders are alike; not all technical traders use the indicators or particular patterns he is so critical of; etc). Nevertheless it gives one pause for thought.
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Old Jan 21, 2010, 10:26am   #109
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
the reason technical traders are always going on about their psychology is that TA is so unreliable.
I don't think anyone is denying that TA is hyped and people are encouraged to use it etc, but people need to be clear about things. TA itself is not unreliable. It is what it is, and what it tells you is true. What is unreliable is using TA to trade when you have no confidence that your system has an edge. In that case, or if you don't even know what an edge is, yes, it really is psychology to blame (with apologies to those people whose psychology is fine but they're just stupid ;-)
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Old Jan 21, 2010, 11:15am   #110
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Xeno View Post
I don't think anyone is denying that TA is hyped and people are encouraged to use it etc, but people need to be clear about things. TA itself is not unreliable. It is what it is, and what it tells you is true. What is unreliable is using TA to trade when you have no confidence that your system has an edge. In that case, or if you don't even know what an edge is, yes, it really is psychology to blame (with apologies to those people whose psychology is fine but they're just stupid ;-)
I disagee.

TA tells you what has happened so far. It does not tell you what will happen.
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