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 timsk DT, . . . if all these 'conventional' places are next to useless and little more ...

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Old Jan 14, 2010, 4:35pm   #51
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by timsk View Post
DT,
. . . if all these 'conventional' places are next to useless and little more than a trap to lure (wannabe) traders into a holding pen for the 'house' to then pick off at their leisure, what are the alternatives? Where do you suggest people go - and what should they do - to avoid this inevitable fate of being parted from their money? What would you recommend to an aspiring retail trader?
Tim
Depends what you mean by 'aspiring trader'.

If you mean a guy with $2,000 with hopes of turning it into $1,000,000 and starting with position sizes way too big for his account. I'd advise buying lottery tickets.

If you mean a guy with $25,000. I'd advise buying a property.

If you mean a guy with a few properties and no skills with which to start their own business - I'd advise avoiding training.

For anyone left, I'd not advise anything - they obviously don't listen to me anyway
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Old Jan 14, 2010, 5:53pm   #52
 
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Re: Wall Street = Casino. Minus Sum Game.

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What would you recommend to an aspiring retail trader?
What would you reccomend, and why ?
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Old Jan 14, 2010, 5:59pm   #53
 
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Re: Wall Street = Casino. Minus Sum Game.

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What would you reccomend, and why ?
Why would you recommend and when?
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Old Jan 14, 2010, 6:05pm   #54
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by zupcon View Post
What would you reccomend, and why ?
Hi zup',
All the things that DT advises against, for two reasons:
1. I'm not aware of any other alternatives (excluding things like getting a position with a good IB or prop firm etc.)
2. I don't share DT's views that books, sites like T2W and (some) courses etc. are a waste of time.
How about you?
TIm.
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Old Jan 14, 2010, 6:11pm   #55
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by timsk View Post
Hi DionysusToast,
Broadly speaking, i agree with your 'in the round' view. However, Xeno's point - as I understand it - is that as individual retail traders, we have the potential to be the thorn in the thigh of the Wall St Casino and beat the 'house'. You're macro and Xeno is micro, so both of you are correct, I think. Be that as it may, having painted this somewhat gloomy picture, other than to suggest that we give up the game, I trust that you're going to provide some clear direction so that we can all avoid being fodder for the Wall St casino?

Tim.
Good section in Street Smarts covers this...I think DT has got the DTs... Is it me, or do I notice a pattern were so many of the *new* posters always arrive like Malificent from Snow White; giving it large, telling every one 'how it is' and how we're all "doing it wrong" to then do a flounce off a bit later on..?

Last edited by Black Swan; Jan 14, 2010 at 6:40pm.
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Old Jan 14, 2010, 7:09pm   #56
 
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Re: Wall Street = Casino. Minus Sum Game.

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How about you?
I'm Broadly with DT. Its not that there's an absense of information, everything you need is probably out there, but noise is a big problem. In the complete absense of any information then anything that a book or forum, or system or mentor provides that can be evaluated, and gets people immersed in the process (even if its complete nonsense) is probably useful to a limited extent.

Unfortunately even the very best advice is context sensitve, and it can therefore be counter productive.

My advice to people would be that you need a full time committment. I've never met anyone who was able to achieve consistant profitability from part time study, although that doesnt mean it cant be done. I'd strongly advise against focussing on trade entries. I'd advise brushing up on basic statistics and probability theory. I'd advise getting some programming and data analysis skills. I'd advise people start by trading a system with a random entry, with an exit after X bars (where X is determined by personal psychology, tempered by market reality). I'd advise the retrospective analysis of all trades, and the development of appropriate metrics for the classification of "good" and "bad" trades. I'd advice gaining an understanding of the importance of trend. I'd advise gaining an understanding of basic TA, price action etc and how that might be used to modify reward and risk. I'd advise against reading anything writen after around 1930 ! I may even advise buying a few books and systems. I'd strongly advise people to keep a diary. I'd advise people to set realistic expecations.

I'd strongly advise against collabarative projects

Thats the problem though, my advice is possibly perfect for anyone who shares similar traits to me. I reckon I could put a training program together that would have them up and running within 18 months, and that they'd be totally self sufficient. The problem is that the majority of people dont share my traits, and therefore they wont benefit from the process. They need a different path, and possibly a path thats diametrically opposite what I would reccommend.

they tell me that there's more than one way to skin a cat
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Old Jan 14, 2010, 7:54pm   #57
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread Timsk - I'm not sure how many books you've read, sites you've visited or courses you've taken.
Could you perhaps provide us with an estimate of that ?
Can you now tell us which of those made you profitable ?

My opinion is that 'situational' investing on stocks is one of the few ways to become profitable. By that, I mean looking for real-world situations that are likely to see a move in an instrument/sector/industry.

I also think that you have to have a good grasp of the structure of the markets, in particular what a Market Maker/Specialist does, what the company owners do and how they get rewarded, what stock analysts are there for, what institutional ownership can do (what they hold, what they wont hold, when they may dump), what dividend payments do to price, how fund managers and brokers earn commissions etc. etc.

I believe that you need not seperate fundamentals and technicals. It's all just information you can use to build a picture of the current situation.

I believe you need to use discretion and not have some technical, rule-based entry. Your short MA may have crossed over your long MA but if the CEO has just been found to be best mates with Bernie Madoff, you might want to stay well away.

It appears that most people want a set of mechanical rules and fear trading that involves discretion. I think this is what causes most people to fail.

Of course - I am sure there are people that will disagree with all of this & still be profitable. For me though - it's the discretion that's the icing on the cake.
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Old Jan 14, 2010, 8:34pm   #58
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Black Swan View Post
Good section in Street Smarts covers this...I think DT has got the DTs... Is it me, or do I notice a pattern were so many of the *new* posters always arrive like Malificent from Snow White; giving it large, telling every one 'how it is' and how we're all "doing it wrong" to then do a flounce off a bit later on..?
Well - if you keep looking for repeatable patterns in everything, you are bound to find some evidence of repitition just through sheer luck
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Old Jan 14, 2010, 10:34pm   #59
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Black Swan View Post
Good section in Street Smarts covers this...I think DT has got the DTs... Is it me, or do I notice a pattern were so many of the *new* posters always arrive like Malificent from Snow White; giving it large, telling every one 'how it is' and how we're all "doing it wrong" to then do a flounce off a bit later on..?
http://en.wikipedia.org/wiki/Dunning-Kruger_effect
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Old Jan 14, 2010, 10:59pm   #60
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Re: Wall Street = Casino. Minus Sum Game.

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Thanks for that, great link, actions speak louder etc... Some good links on that wiki entry highly relevant to trading and the opinions constantly offered up; self serving bias, illusory superiority and my particular *favourite* imposter syndrome...
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