Correct. My apologies. I suppose I meant a billion is 0.001 of a trillion, which is indeed 0.1% as you noted. I don't often get to talk about trillions, you see. All those zeroes make me heady. On the plus side, my initial number was 10 times closer to the correct answer than Pipsgalore's. I take comfort in that. Mahras2, we have been humbled. But only a tenth as much as Pipsgalore. (0.1 or 10%.)
Well, Dan Zanger apparently turned $11,000 into $18 million in something like three years, with results verified by Fortune. Ed Seykota had accounts with 250,000 percent returns over 16 years. Warren Buffett's net worth essentially doubled in his sixties, and could theoretically double again were he not in the stratosphere. There's a lot that can happen over a 30 or 40 year trading career. The number isn't really all that important. What's interesting to me is the elite trader ethos. I asked the question to sort of highlight the evidence of that ethos in a single thread. Which has been successfully done, I think. So many of the answers here have the same flavor. There is such an overwhelming focus on one type of trading... the type that involves staring at the screen. The notion of X percent per day. The holy grail of huge returns and 45 degree angle consistency at the same time (a nut that Jim Simons and a few others appear to have cracked, but only with an army of PhDs and a large dose of good luck, as Simons readily admits). The site is called elite 'trader.' There are many different styles of trading, and no indication that Baron chose one general style of trading to promote above all others. Yet one niche has clearly dominated. If the different trading methodologies and mindsets were religions, you might say Elite Trader is 80-90% Roman Catholic (or Jehovah's Witness, or Zoroastrian, or...) From a cultural / sociological standpoint, I wonder why this has happened. My tentative theory is that it's the unintended result of hopes and incentives, that the dominant ET trading religion has 'won' because it provides the most appealing package for the widest array of folks. In their happiness and fulfillment daydreams, most people want three things from trading: 1) big money 2) sleep-at-night stability 3) no need to think (or minimal need to think) The only trading methodology that really combines these three attributes effectively is the one that focuses on staring at the screen (X percent per day etc.). The big money is the few hundred percent per year quest (rather than a more realistic percent per year on a compounding base with no meaningful strategy limits). The sleep at night part comes from the stability of X percent every single day that people want so badly. And the no-need-to-think part is less subtle, but there in terms of treating trading like a sport, rather than an intellectual exercise. Like dodgeball, or kickboxing, act-react dozens or hundreds of times a day, with a bell to ring at the end of each day. Other methodologies just aren't as effective at capturing this trio of desires. Longer holding periods require more patience, a more philosophical approach to risk, and worst of all, more uncertainty and more need to think. When there is no bell to ring at the end of the day, when convictions are required that play out for longer periods of time, when the game starts to get less like dodgeball and more like chess, the appeal drops off significantly for many. The you-can-do-it, eye-of-the-tiger emotional overlay also meshes more affectively with the trading as kickboxing approach. Perhaps the hidden wish of many ET'ers is for trading success to be deductive, rather than inductive. Meaning, "whatever I need to succeed at trading is already here. It is within my emotional mindset, within the trading books on my shelf, within the patterns I see on my trading screen. All I have to do is find the needles in the haystack, this haystack which sits before me." To view trading success as inductive, rather than deductive, paints a less pleasing picture. If trading is inductive, then the trader does not have pieces of the holy grail hidden in the corners of his little world like easter eggs. It becomes less about tearing through a haystack and more about roaming the land in search of wisdom and truth. The inductive trader only has clues, starting points, trails that he must follow into the wider world. Some of those trails will be useful, but the majority will be dead ends, and some will lead to quicksand or swamps. The realities of challenge and uncertainty suddenly become harder to brush off. I'm attracted to the notion of trading as inductive, rather than deductive, mostly because I think it is more accurate, but also because the inductive view is unappealing to most and a much tougher nut to crack. These characteristics would also explain why incredible profit opportunities exist -- those profits might be accessible to the average man, but then again they might not, and whoever would successfully take them, barring temporary luck, must become extraordinary themselves in the process. So why is the already within you / deductive view so popular? In my opinion, the deductive notion of trading successfully propagates itself because it is the natural conclusion to come to if one is led by a priori desires, as many are, and if one is willing to dismiss the red flag of something for nothing, or rather something for little, as many are. (An enthusiasm for girding up one's loins with confident self-talk is not nothing, but it is definitely little.) Metaphorically speaking, we all walk around with mental eyeglasses of our own construction. These glasses shape and distort one's view of reality in ways both subtle and not so subtle. The less committed a person is to the ideal of objective truth, the harder it is to tell which features of the landscape are real and which features are exaggerated / minimized / self-created. Especially for those who don't even realize they are wearing glasses at all. Certain questions reveal the distortion field via descriptions or assumptions in the answer given. Sorry. Just felt like messing with folks' heads a little. Feel free to consider me a jerk. As for the $100 million thing, it really is possible, no question there whatsoever. Whether important / appropriate / meaningful is another debate entirely, and one without a fixed answer.
Hahaha. Wow no more posting after getting up for me. I thought Bit was saying that a thousandth was 0.1 .
Also never forget the 'carrot effect' in this game. Sure it's possible to make $100m just as it is to make $200m but trading always dangles that carrot out in front of you. There's always a fortune to be made, the potential never disappears but the donkey (99% of people) can never reach that lovely carrot but it's there everyday, in fact it's there when you go to bed and in your dreams...............
True -- but it's only a carrot if you choose to make it one. It's uncanny how people assume helplessness in the face of desires or perspectives they have total control over, and yet expend great energy trying to control or change that which can't be controlled or changed at all.
I am impressed, as always, with the lucidity and thoroughness of your analysis. And while I agree with most of your analysis, I do not agree with all of your conclusions. I imagine that this discrepancy in conclusion is attributed to the point you outlined in your second to last paragraph. I think that thoughtful people approach the markets from their understanding of, and experience with, the markets and what they believe to be their strengths in exploiting those markets. It also comes down to the perception of risk and the stomach for it. In my case, I have found that I am much better at calling (and leveraging) very short term movement and riding it than I am at calling longer term moves with confidence. And where longer term moves are concerned, I personally (and probably inappropriately) view confidence as complacency. And I act in accordance with my beliefs and personal experience. We are all the product of our past, at least in part. I started trading the markets from a position/swing trading perspective and ended net negative. I remember well the sleepless nights of prices moving against me while I tried to be "confident" in the "bigger picture." Perhaps if I had known then what I know now it might have been different. Perhaps if I had started as a complete greenhorn trading intraday and had gotten burned badly, I might have been more receptive to holding on longer term today. Who knows? I am aware of my bias, but despite my introspection, it remains. This is how I see the world. And while I am now reasonably confident in trading the markets that I participate in, I regard the market as a big and somewhat unruly dog that is best kept on a fairly tight leash. Sleep is important to me, and while I like money as much as the next guy, I also value quality of life (as I define it for myself). Perhaps one day, I will look outside of myself and have an epiphany that will give me a completely altered view of the world and the markets. But until that time, this is my working model. And while I may not look to specifically make x% per day, it is nevertheless the sum of daily performance that results in annual performance. At this point, I don't know if my post just rambles or if it makes some sense to anyone. I am just too tired to review and amend it if necessary. So, I will just press "Submit Reply" and hope for the best...
Makes sense to me... ain't nothing wrong with going home flat. Didn't mean to imply there was. My comments were more oriented to the starry-eyed dreamers of this board... and nothing necessarily wrong with starry-eyed dreams, either. We all have to get our rocket fuel from somewhere. My conviction grows that self awareness is one of the highest order traits, and one of the most useful things we can cultivate. I am strangely motivated to increase self awareness in others, as well as in myself. Maybe it's just a personal correlation between what's important and what's interesting, combined with a desire to talk about what's interesting. Delusions are expensive. If I'm strongly inclined to believe in something, I'd rather have that belief put through the Samsonite test than treated like a Faberge Egg. (I routinely offer my Samsonite service for others too -- surprisingly enough, it's not always appreciated.) One point pessimists have over optimists: Pessimists are more likely to be tough bastards who can walk through the pain when motivated, whereas optimists are more likely to crack. Take the best of both and you get a realist... someone who doesn't sugarcoat life but doesn't dismiss the incredible possibility of life either. At any rate, I'm rambling now. In short, I'm not down on daytrading. If your motives and your methods and your results put you on solid ground, that is excellent. I just think a lot of people are attracted to the Elite Trader ethos for the wrong reasons, thereby explaining its popularity, and that the X percent per day thing can take on an unhealthy fascination for some.