For a Quant to have negative years, it means the inability to adapt to various circumstances, probably due to a trading a singular system containing only singular logic. You cannot successfully trade every possible aspect and circumstance the market dishes out with only one form of system logic. You must have a multiple logic trading platform to succeed in every type of market. I suggest if you are programming automated systems, combine (1) "Trending Logic" with (2) "Intuitive Logic" and program the two forms of logic to (3) Interact as a Check and Balance system for the Trade Decision. Note: If you accomplish 1, 2, & 3 above, you will need to forward test it an amount of time that has months of Uptrends, months of Downtrends, and months of Trade Range markets that include the VIX having variables between 9 to 50.
You are doing professional gamblers a huge disservice. Most professional gamblers, especially poker and blackjack players have a much keener understanding of probabilities, edge, and bet size than 95% of pure idiots on this website who know basically nothing. The same idiots have watched a tv drama that deals with the medical profession and they subsequently inject themselves into discussions pretending they know a thing about medicine. Laughable. Let's be honest: Most people here, even those who have previously held respectable jobs in computer science as developers or support staff are trading without the slightest clue, they have zero understanding and appreciation of risk. They delve into this industry and most of their existence is occupied with handing free money over those who understand the ins and outs of trading and managing risk. Of course those who have no clue and excuse their unemployment, boredom, or otherwise miserable lives with a newfound profession so their wives do not kick them out of their home are pretentious liars and wannabees. Of course the one who gets damaged and mislead the most by their lies is themselves. And the most deceived ones are blaming everyone else instead of themselves. They start threads claiming it cannot be done and basically judge the few who spend 12 hours or more each and every day in this endeavor, who have earned through hard work an education that aides them in this industry and who are diligent students of their chosen profession. That is all that comes to mind regarding this thread.
A wise man once said "Everybody gets what they want out of the market." (Ed Seykota). The desperate and lazy chase cheap means and get exactly what they are putting in. Some even actually want to lose in the market and also get what they want. It seems there are plenty who rather want to be right than making money.
I entirely agree with you. There's a distinct difference between the average trader here (take a look at this sub-forum alone...eek) and a professional. The idea of trading, gambling, and being an actuary are all the same. Get your money in when the odds are in your favor, keep it out when they are not. Of course, there is some extra complication (especially with actuarial science!) but in general this is true. There is a reason nearly every great trader started out a gambler and many quantitative trading firms will hire people with good gambling records. Teaching a gambler trading is easy. Teaching the average person to trade is not. Professional gamblers know things that are very useful to traders: 1. Definition of risk - "I will only risk 1% of my capital per trade". This keeps you in the game longer to handle your variance. In poker it was critical to manage this in tournaments so you could re-buy a few times before getting blown out. 2. Understanding the odds - "I have a 65% chance and I'm being laid odds to make $100 by spending $150 - I'm in". Traders and professional gamblers look at the probability of making a trade work vs. the outlay. Not just the outlay. Many quant interview questions revolve around this idea. 3. Understanding winners can be losers - Even if the odds are in your favor you can lose. This is a critical flaw of easily 98% of traders on this forum. They look for the ultimate system with 100% accuracy. This is fear. You cannot have fear trading or gambling. I played at the local poker tournaments and cash games when I was in college. Like traders, gamblers can smell fear and exploit it.I lost many bankrolls because my betting strategy gave away I was afraid. 4. It shouldn't be "exciting" - Trading for excitement is actual gambling. You're just hitting buttons without the dings and flashing lights nor the pleasure of a cute cocktail waitress keeping your glass of whisky full while you chase bad money with good. If you find yourself emotionally invested in trading - you probably should stop trading. If not, you will find yourself doubling, tripling, and quadrupling down on a trade you know "must go right soon" and then you're living out of a box. Most traders know this in the form of "blowing up ones account". If you invest in proper risk management you will never blow up an account. Period. 5. Defined entries and exits that are systematic and rigidly followed - Read a book on blackjack systems for an idea of this. I have a few in my collection. You can learn a lot from blackjack players. To those that don't believe me I challenge you to go to a poker room with $100 and sit down at a pot limit table. You will be short stacked. Every hand you make you have to fully invest. Internalize that feeling. Then, go back with another $300-400. You'll feel better because your bad mistakes contribute less than the times you win.
I would pay 100 bucks a month for a subscription for a chat room with guys of your intellect and thought process and filtering out all the dumb noise. Could not agree more on everything you said.
Here are some of my old notes - a study done by the Casino industry insiders on pro gamblers. Risk mgmt for trading was derived from pro gamblers. Gambling and trading are two entirely different birds, although there sure are plenty of speculators/traders/investors that are compulsive gamblers. _________________________________________________ A skilled blackjack card counter has an advantage over the house of 0.5%, the count is favorable only about 15% of the time. They win over the long run, expecting losing days, weeks, and months. Professional gamblers rarely sustain a long term winning percentage higher than 55 percent, and it's often as low as 53 or 54 percent. Only 1 in 500 card counters are profitable over the long run. Casino's welcomed card counters with open arms when it went mainstream - their profits soared. Bankroll - often misunderstood by novices, you need a bankroll of 100 times your max bet. Their bet size of 1% of the bankroll contracts and expands with their bankroll. The measure of success is not the percentage of winning bets, but the relative amount of profit they makes over any given period of time. Why gamblers lose: Bankroll to small - takes $10k to avg $10 per hour over the long run. The fail to realize how bad the losing streaks will be. Expecting daily profits - even the best of the best have losing streaks lasting up to a few months. To timid to vary bet sizes enough to make any substantial gains. The brag to their friends about their winning days while hiding their losing days - self deceit. Generally speaking, non-professional gamblers go wrong by risking too much of their bankroll on individual bets. They don't spread their risk thin enough over a big enough number of bets. Professionals use smaller bet sizes in proportion to their bankroll over larger numbers of bets. As a matter of fact, one good way to spot a non-pro is they risk more than 1-2% of his bankroll on each bet. _______________________________________________________________
%% And try card counting/winning in Las Vegas + see how far one gets. LOL[Hint; Lotto is a stupid tax on people that cant do math]Good points