In a zero sum game the winners can win what the losers loose. But you have to take in account the cost of commissions and slippage. So in fact you can never win 100% of what the losers loose. So the potential is limited to 100% minus commissions minus slippage. If you are not in a zero sum game, there will be elements that can increase the potential so that your profit will not be limited to the losses of others. You can make more money due to the factors that create additional value. So the potential is more than 100% of the losses that others make.
I hear what you are saying and I agree. The biggest negative factor being costs of trading, is the deceptive beast eating up accounts. Few people know how much it "costs" them to every month. Wall street was not built on trading profits.
I think the mathmatics of good trading is very basic. It is the 'rat cunning' and it's application to the reality that the charts present that provides the winning edge. I cannot stress the need for reality based thinking enough. Losers trade their perceptions and winners trade reality. This in my mind is the difficult point of trading and it is virtually unteachable, because how do you teach someone to see reality. This business about 'zero sum' is perception when it comes to making money in the futures market.
I think the mathmatics of good trading is very basic. Agree, I graduated in the basic mathematics ( adding, substracting, dividing and multiplying). It is the 'rat cunning' and it's application to the reality that the charts present that provides the winning edge. Thatâs what I meant with creativity and original thoughts. If you are only a number cruncher you wonât get far. I cannot stress the need for reality based thinking enough. Losers trade their perceptions and winners trade reality. Thatâs where I use mathematics and statistics. Sometimes I think that 1+1 equals three, but my mathematical systems says it is only 2. Maths keep me in reality. And statistics give me an idea where I should end up in the long run and at what risk.
Freaking math geniuses. This is fun! YOU NEED BALLS, MAN! Math geniuses don't have balls. Trading is HUMAN. It's not a math game. It's not about sitting there and being the genius in order to find that perfect system.... It's about doing what you like, being relaxed, not thinking about the past trade, having an eye for your setup and then being as cold as ice when execution comes in .... Man, i had someone who was completely dumb. I mean it. This is true. He was an idiot. He was actually the driver for the firm. I just made a few simple rules for him to follow and he traded better than me for the first 2 months. He had no idea what he was doing, but he knew he was making money. I told him i can't guarantee every trade would be a winner, but i told him the money he would make were his after 6 months (me providing the capital). The rules were all he had. After 6 months he had made some money. So spare the math genius thing. A trader does not need to Invent his system....
There is no general proof that math is necessary as there is no proof either that you need balls to be successful. LTCM was managed by super mathematical geniuses, and it went broke. But there are also super mathematical geniuses that are successful. There are successful trader with an average intelligence and there are lousy traders with an average intelligence. You can find proof for any statement. Even a monkey can be a successful trader. Freaking math geniuses. This is fun! YOU NEED BALLS, MAN! Math geniuses don't have balls. I know someone who had balls; he made lots of money but ended up broke, lost 10 million dollars. If your only qualification is having balls, than you will end up broke with a statistical probability of 99%. It's about doing what you like, being relaxed, not thinking about the past trade, having an eye for your setup and then being as cold as ice when execution comes in .... What is your setup? Buy or sell when your balls are itching? If you use quotes, you use math, because quotes are ciphers. So spare the math genius thing. A trader does not need to Invent his system.... You only have to remove the word genius, but keep the math.
yeah, in fact i have one ball telling me when to sell and one when to cover (reverse for longs). I have applied a moving average on my left ball as i think it's trying to whipsaw me... that rascal... of course i don't have a "ball" setup. Of course i use cyphers, but i am not a math genius.... And i am more used to visual imagery than numbers. I only use actual numbers when calculating the risk/reward, setting a stop, setting a target.... other than that... i "see" the picture.....
I'm not a math genius either. I use math to create lines on charts. These lines say much more to me than the figures. I can read lines but i cannot read figures. Being a math genius seems to me more a disadvantage than an advantage. I experienced, that if a problem occurs in a domain where i have a more than average knowledge in, i often search after a solution in a much to complex way. I always try to throw all my knowledge in the fight for a solution, with the result that i often look for a complex solution to a simple problem. I have already seen calculations from math wizards that where so complex that the wizard himself wasn't even sure what the outcome of the math meant and even made the remark that the outcome might even be completely wrong. As i'm not a math wizard at all, these calculations looked like chinese to me, and it might even be possible that the whole calculation was no realistic calculation at all but a fraude in an atempt to impress me. The only thing that impresses me is a simple and effective solution for a problem. That is a much bigger performance than doing it with a complex calculation.
exactly my dear watson..... and i stand beside my very early post that the 95% is not a realistic number, or at least not consistent.... It may be true for 1 year beginners who throw everything at the market... but it's definitely not true with people that stick wit the market long enough to get to the end of the learning curve....