Wall Street = Casino. Minus Sum Game.

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Old Jan 14, 2010, 11:57pm   #61
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread I see - so by stating the obvious, that the massive financial services industry (including this site) exists to suck money from investors and NOT to give them a return, I am somehow attempting to make myself superior ?

As for 'actions speak louder' - what actions can you actually take on a forum other than actually posting ?

Let's consider another industry - the Bodybuilding industry.

- Magazines telling people how to get huuuuge with the latest workout/super supplement
- Crappy ebooks & courses on how to get the ripped bod you always wanted
- A whole industry selling products that don't work - pills, powders & creams that do nothing
- Internet forums attracting skinny little twinks and selling advertising space, with lots of skinny twinks posing as experts advising other skinny twinks.
- conferences, training courses, personal trainers

All of this & very rarely do you hear the straightforward fact that the huge guy on stage at the Mr O takes a sh1tload of drugs and is blessed with a good genetic response to those drugs.

Why don't we hear that? Because the magazines, the supplement companies, the personal trainers, the ebook sellers and the forums wouldn't make a cent if everyone realised what was actually going on.

Are any parallels evident here?
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Old Jan 15, 2010, 12:02am   #62
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread BTW - at this point, it may be wise to point out that a vendor was 99% responsible for making me profitable...

The other 1% was me listening & practising.
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Old Jan 15, 2010, 11:50am   #63
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post
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 ??
Hi DT,
I've paid for various courses, some good and some bad. I won't go into detail as I've posted my views on the subject many times and at great length and don't want to repeat myself here. Websites are too numerous to mention. However, there's only ever been one that I look at most days - and that's T2W (before I started working here). I concluded years ago that my best bet was to get to know one site and its members really well and, gradually, try to work out who walks the walk, as opposed to just talking the talk. I understand just how difficult this task is, especially for newbies. This is part of my motivation to do the job I'm doing here, to help new members filter the massive quantities of threads and seperate the wheat from the chaff. As for books, a similar story. My 'library' has abround 45 titles, most (but not all) of the big name titles are included.

Quote:
Originally Posted by DionysusToast View Post
Can you now tell us which of those made you profitable?
I'm not making any claims of consistent profitability which is (or will be), I presume, your point. I had a period of profitability in the early days and it went to my head and I blew up, fairly spectacularly. I then went back to 'school', reading and learning what I could from the sources mentioned above. This resulted in me trading full time for a year in 2008. It ended in me being just the right side of B/E before commissions and the wrong side of it after commissions, (some USD $2,740.00). However, I got lucky with the USD/GBP rate and I ended the year net positive. Last year, I didn't trade at all and went back to square one. This year, I'm starting over, so it's a little too soon to tell how successful - or otherwise - I'll be.

Your point, no doubt, is that T2W, the courses and the books haven't got me very far. I would disagree. I maintain that it's through the knowledge that I've gained from them that I'm still in the game. I believe that I'll be able to trade for a long time and it will cost me less than most people spend on their hobbies. Not that I think of trading as a hobby you understand! Without them, I would have either given up or blown my account long ago. The other point is, I am just one trader. Even if I blow my entire account tomorrow, it doesn't invalidate this place or the books or the courses. We know this because there are people who have gone down the same path as me who are now making consistent gains from their trading.

I agree with most of the other points in your post and that's among the reasons I've switched from trading U.S. stocks to the YM e-mini futures contract. Many of the issues you mention are removed in an instant!
Tim.
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Old Jan 15, 2010, 4:12pm   #64
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread I understand what you are saying Timsk - one unprofitable trader learning from books/internet does not prove that you can't learn to trade from books/internet.

The thing is - where are all the people who did get profitable that way ? I know I didn't. I know that the advice from those who helped me was not in any of the 50 or so books I read.

I can reverse the logic of trading special situations.

Lets say one of the situations occurs where the outcome is tradeable. A pure TA guy would not trade on that information because it is not yet built into the price. On the other hand, a pure TA guy may be in a trade and blissfully unware that something is happening that will impact the price of the instrument he is trading. How can a TA purist ignore such things ?

In fact, I would say that a TA purist should be looking or these things when analysing why a trade failed. Let's say you are long a stock and it gaps down through your stop. As a TA purist would it be right to just write it off OR would the right thing be to look at why it gapped down so much and learn from it ?

This is why I think pure TA or pure FA is a dangerous thing to do. You should assimilate all information regardless of how it is categorised in order to make the best decision.

Earnings season and dividend dates for stocks are some of the most obvious things that come to mind. They can blow a pure TA trade out of the water.

Despite this, there is a pure TA mantra with very little evidence that pure TA can make you consistent profits. In fact - if you take someone making money from pure TA and ask them why they pass on certain setups that look good - you'll probably find that discretion is actually a large part of their method.
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Old Jan 15, 2010, 5:10pm   #65
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Re: Wall Street = Casino. Minus Sum Game.

Hi DT,
It sounds to me as if you've been around the block a few times and, like anyone who's been trading for more that five minutes, has found a bunch of things that don't work. For you. But, that's not to say they don't work for everyone else. Although you haven't said it explicitly, you sound like you're of the school of thought that says unless a trader can prove to your 100% satisfaction that they're profitable (e.g. by providing audited and verified broker statements) - then you assume that they're not. I guess I'm more trusting than you and will accept a much lower threshold of evidence of a trader's proficiency!

It's horses for courses at the end of the day. And, although I subscribe to the basic premise of your thread, I'm much more aligned to Xeno's school of thought that says the little guy can beat Wall St at it's own game. I've met enough people on here who have proved to me that it's entirely possible, using little more than pretty basic TA, trend and S&R etc. Examples? Off the top of my head: Newtron Bomb, Mr. Charts, trader_dante, Naz, bbmac and Captain Currency. And then there's the pro's who grace us with their presence who, doubtless, use more sophisticated tools, such as TWI and GammerJammer.

In spite of all that the pro's have going for them, the veeeeery deep pockets, state of the art kit and Mensa intellects etc., they can still make a complete pigs ear of things occasionally. Last year's banking fiasco is proof of that. While it cost us all billions, it nonetheless puts a wry smile on the face of minnows like me. Wall St isn't infallible. Beating it isn't easy, it certainly isn't get rich quick, but I'm totally convinced that it is very possible.
Tim.
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Old Jan 15, 2010, 5:57pm   #66
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread Look at Dante's most recent thread.

He details in there how his methods don't work on some markets. He had decided not to trade those markets - that's the discretionary part making the final decision.

I think you will find Mr Charts does the same thing.

I think Captain Currency spends his time sending out spam emails to sell his ebooks.

In my opinion - it's the discretion that makes the $$$ and that is what everyone that isn't making money does not want to hear.

It is, after all, much easier to have a cookie cutter, mechanical approach and much more daunting to look at a situation and try to read meaning into it. This is why most people are being sold a cookie cutter approach.

In any case - JPM made over $2bn this quarter.

The financial services industry is a casino and until Wall St has a losing quarter (where the govt doesn't bail them out), I can't see how anyone can say that the odds are not tipped in their favour.
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Old Jan 15, 2010, 6:23pm   #67
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Re: Wall Street = Casino. Minus Sum Game.

DT,
I don't disagree with you about the discretionary aspect at all. For me, that means knowing when to obey one's indicators and when to ignore them. By indicators, I don't just mean EMA's and Bolly Bands etc., I mean any tool or analysis technique which helps you determine which direction to trade in and, indeed, whether to take a trade at all. The problem of course, is that this is an unquantifiable variable. So, if one's trading goes off piste, it will be next to impossible to identify where the mistakes were made and what needs to be done to put them right. For this reason, talking personally, while I want to include a discretionary element in my trading, I want to keep it pretty small.

Like you, I noted trader_dante's comments about dropping unprofitable markets. I had the same thing when trading stocks in 2008. A couple of stocks I did really well on compared to some others that I did very badly on. No rhyme or reason for it that I could see. In fact, the one I did best on (POT) was a lot more erratic, often with a wide spread, compared to the one I did badly on (AAPL). The exact opposite of what one might expect. Anyway, I'm happy for you that you've found your niche and are doing well.

Btw, Captain Currency's e-book is free!

Tim.
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Old Jan 15, 2010, 6:38pm   #68
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post
Look at Dante's most recent thread.

He details in there how his methods don't work on some markets. He had decided not to trade those markets - that's the discretionary part making the final decision.

I think you will find Mr Charts does the same thing.

I think Captain Currency spends his time sending out spam emails to sell his ebooks.

In my opinion - it's the discretion that makes the $$$ and that is what everyone that isn't making money does not want to hear.

It is, after all, much easier to have a cookie cutter, mechanical approach and much more daunting to look at a situation and try to read meaning into it. This is why most people are being sold a cookie cutter approach.

In any case - JPM made over $2bn this quarter.

The financial services industry is a casino and until Wall St has a losing quarter (where the govt doesn't bail them out), I can't see how anyone can say that the odds are not tipped in their favour.
Hi DionysusToast,
Regarding your posts and thoughts. I have a slightly different angle on it that doesnt often come up when people talk about markets and making a profit.

Most people are looking for a "strategy" or "system" or my least favourite term, an "edge".

But I think people should look to "provide a service", only then will you be likely to make the minus sum game into a positive sum game (in my humble opinion).

So, for example, spreadbetting firms provide a service, and take 2 pips (or whatever per trade), thanks very much, profit. Banks run a similar setup. They are middle men in the most part and make a handsome profit providing that service.

So how do traders provide a service?

Well, some traders buy when things are priced incorrectly (the warren buffett's of this world take the long term, swing traders the short term). Some traders provide liquidity (scalpers)... some traders trap animals (bears / bulls), some traders provide momentum (big swinging diks)... etc etc. i am definitely of the thinking that you have to provide a service. Otherwise you are just another guy plugging dollars into the banks / spreadbetters / profitable traders pockets.

So question to ask yourself.... what service does my trading provide the market?
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Old Jan 15, 2010, 6:40pm   #69
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread Timsk - Captain Currencies ebook is a fluff piece created to collect your email addy & spam you the sales pitch for the ebook with the REAL secrets in it (not to mention the mentorships).

As for keeping the discretionary/fundamental part small - I think if you expanded this, you would have more succesful trades.

Events move the markets, not technicals.

A Goldman Sachs upgrade will move price a lot more than any whizz bang MACD, Stochastics, pin bar or support and resistance ever will.

Of course, Wall St will benefir from anyone who refuses to believe this as the TA mantra is all part of the house edge.
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Old Jan 15, 2010, 6:46pm   #70
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread
Quote:
Originally Posted by D70 View Post
Hi DionysusToast,
Regarding your posts and thoughts. I have a slightly different angle on it that doesnt often come up when people talk about markets and making a profit.

Most people are looking for a "strategy" or "system" or my least favourite term, an "edge".

But I think people should look to "provide a service", only then will you be likely to make the minus sum game into a positive sum game (in my humble opinion).

So, for example, spreadbetting firms provide a service, and take 2 pips (or whatever per trade), thanks very much, profit. Banks run a similar setup. They are middle men in the most part and make a handsome profit providing that service.

So how do traders provide a service?

Well, some traders buy when things are priced incorrectly (the warren buffett's of this world take the long term, swing traders the short term). Some traders provide liquidity (scalpers)... some traders trap animals (bears / bulls), some traders provide momentum (big swinging diks)... etc etc. i am definitely of the thinking that you have to provide a service. Otherwise you are just another guy plugging dollars into the banks / spreadbetters / profitable traders pockets.

So question to ask yourself.... what service does my trading provide the market?
That's a very interesting way of looking at things.

One of the things I look at now, which occurs every few weeks would be the provision of a service too. That's me buying things from institutions that didn't want those things in the first place. They just got saddled with them.

This sounds like a poor service to provide but it's actually a decent trade.
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