Niederhoffer Asks What is a Trader?

Discussion in 'Psychology' started by marketsurfer, Mar 27, 2015.

  1. I personally think this comment by Jeff Watson is fantastic:

    1. 48.

      What are the odds of playing Texas hold'em, getting a pat straight flush on the flop and losing to a higher straight flush? What are the odds of driving a new car out of the car dealer's lot and having it totaled by a truck? What are the odds of your wife, who has never made a bet in her life, sweeping nine trifectas in a row(3 of them paid four figures) at the dog track? What are the odds of seeing four people get bitten by sharks within thirty minutes while surfing at New Smyrna Beach? What are the odds of playing the best golf game of your life with a hole in one, three eagles, two birdies, yet still losing by a stroke? What are the odds of both grandmothers dying exactly a year to the day apart, same time of day, in the same hospital room? What are the odds of losing forty two copper trades in a row? What are the odds of standing in line to buy a scratch off lotto ticket, and the person ahead bought the same ticket the wife requested and it paid $120,000. What are the odds of going to Publix, and within ninety minutes, running into three people from different periods of your past? What are the odds of running into a guy from first grade while waiting for a train in Morocco? What are the odds of winning two first prizes in two separate drawings at the grand opening of a mall?

      None of this is good luck, bad luck, or is unusual because people beat long odds all the time and it's easy enough to explain. Life presents thousands of opportunities/happenings/events every day. Multiply that by thousands of days, and there are millions and millions of opportunities/happenings/events every lifetime, and the total distribution will show a number that could be described as long shots.

      One's chance of facing and beating long odds(for better or worse) in one way or another during a lifetime is near 100%. Repeating the mantra that beating odds is not always favorable, as failure has odds too.

      The markets offer the player all kinds of odds, changing all the time, all day long, every trading day of the year. For every few thousand 3:2 plays, there will be some that offer 50:1, 100:1, 1,000:1 or maybe more. It is likely that the participant will stumble across many of these long odds scenarios in a career. Looking at the chart where an option traded for a quarter, it is important to remember that someone bought that option which immediately went to $85, and somebody also bought beans at $6.00 that doubled. Conversely, someone sold that option, and sold the beans which possibly caused them great harm.

      All in all, it's important for the spec to develop good skills and learn to handicap everything in life and the markets. Although cliche, it's necessary to expect the unexpected. Keep to the high ground when the 100 year flood shows, and don't get cocky when three inches of gold unexpectedly rain down on the street.

      (submitted by Jeff Watson)

     
  2. Another good one from Sushil Kedia

    59.

    @sushilkedia

    A trader is that economic agent who hazards the future most fearlessly and who also gives the most attention to history. Balancing these two large vectors over stretches of time, the trader is also therefore the economic agent who responds to the present moment with the highest alacrity.

    A trader is that economic agent who minimizes differences in prices over different places and over different times. Therefore, a trader is that economic agent whose profits come, not at the expense of others, but truly by creating utility of time and utility of place.

    A trader is that social agent whose goal is to steer clear of opinion and place his bets on expected facts. Trading activity has the largest incentives arising from anticipation and therefore a trader is that social agent whose responsibility it is to anticipate better than everyone else, including the governments.

    A trader is that thinker and that doer, whose mandate is to not allow his train of thoughts to execute actions at a positive relative velocity to reality. A trader's mandate is to reach the least possible relative velocity to reality. Therefore traders are those economic agents whose incentives arrive from achieving the least distortion perception of reality. Trading therefore, is a profession exercised by those who reflect reality sooner and better than all other social and economic agents.

    A trader is one who can despite the credentials to live in ivory towers, chooses to hobble down on a cane when all others have broken theirs.

    A trader is the one who knows better than all other economic agents when to hold them and when to fold them, whether playing cards or economic bets.

    A trader is the one who pays least price by way of humiliation brought about by adverse economic events, since a trader has learnt already that the most powerful currency is humility even in environs that are favourable.

    A trader is that rare scientist who is most conscious of and regularly experiences the changing velocity of time.

    A trader is that artist who envisions form in formlessness and formlessness in form.

    A trader is the one who despite all of these rare skills and attitudes as enlisted hereabove, is still a human being that makes mistakes and learns from them.
     
    TooOldForThis likes this.
  3. You should be the winner. With all the experiences, knowledge and unlimited wisdom you (pretend to) have, you would have no competition.

    Or maybe Niederhoffer excluded you from participating to give other people also a chance to win.
     
  4. Blueline

    Blueline

    No. 18 is very "deep" and "rarely" seen!.....truly hard to understand, never mind "know".
     
  5. qxr1011

    qxr1011

    IMHO, trader is someone who is making a living trading his own money.
     
  6. dealmaker

    dealmaker

    even better, trader is someone making a living trading.
     
  7. qxr1011

    qxr1011

    no only if he trades his money
     
  8. kut2k2

    kut2k2

    Trading is an IQ test.

    A trader is someone who has passed that test.