Best and worst influences on my P&L over the last 10 years

Discussion in 'Professional Trading' started by Ghost of Cutten, Aug 19, 2009.

  1. Here are some things that many traders, and I bet most people on ET, spend a lot of time on:

    1. Trading message boards on the internet
    2. Market commentary on the internet
    3. 3rd party trade recommendations
    4. Trading books
    5. Trading seminars, expos etc
    6. Institutional quality research
    7. Discussing the markets with others
    8. Piggybacking "great" traders and investors
    9. Doing market preparation, thinking, and research entirely by yourself with no outside influence.

    I did an extensive performance review over the last few months, going back over my results over the last 10 years. As part of it I reviewed the contribution to my P&L of the 9 things listed above, along with some other factors. These are my conclusions:

    1. Trading message boards: reading and especially posting on them had a net negative effect on P&L.

    2. Market commentary: reading market commentary lowered my P&L. Note that this was true, *even for reading traders who were successful*.

    3. Merely reading 3rd party trade recommendations lowered my P&L. Following them lowered it more (i.e. recommendations are net losers).

    4. Reading trading books, especially re-reading the good ones and taking notes, increased my P&L.

    5. Trading seminars & expos had no positive effect on P&L, and cost money, so they are a net loser by wasting time and $$$.

    6. Reading, and especially following institutional research lowered my P&L.

    7. Discussing the markets with others reduced my P&L

    8. Piggybacking top funds, traders, and investors reduced my P&L and was actually a net loser in 2008.

    9. Doing market preparation, thinking, and research entirely by myself or with a full-time collaborator in the same office, with no outside influence was *by far* the most profitable approach.

    The conclusions are inescapable:

    1. Immediately cancel your membership/subscription and stop using all trading message boards, market newsletters, research services, market commentary, trader expos/seminars and so on. Every post you read and make will cost you money.
    2. Ignore all talking heads, even the best traders and investors in the world. Listening to them rather than thinking and trading for yourself will lose you money.
    3. Never discuss the market with others, doing so will lose money.
    4. Play a lone hand - do your preparation and trading all by yourself or with in-office colleagues, with no further outside input. Doing this will make you lots of money.

    N.B. Yes, this means ET is a bad habit which you should quit immediately and permanently.
     
  2. This is the main reason why I stopped using ET. I have come back to post this, in the hope that I can make a few people see the light and improve their trading results. Given human nature, I suspect that 80% of you will dismiss this as bullshit, and the other 20% will nod with recognition, say "He's right" - and then do nothing about it. Most likely you will go on wasting time and money by reading and posting on this site, sending messages on their bloomberg, reading what Buffett, Soros, Gartman, Faber or other people have to say, reading research and watching CNBC, looking for trade ideas, and yapping with others about the market. They will do this despite it being factually proven to cost them huge amounts of money, not to mention time and dissatisfaction. They will do this because despite being intelligent, they have dumb habits, like I did (I even relapsed today with a couple of pointless posts on pointless threads). Yes, I'm talking to you. Every post you read or make here reduces your IQ and P&L by a fraction. Over the months and years, it adds up.

    It is no coincidence that gnome, one of the most profitable traders on this site, has quit. He realised the sheer stupidity of being on elitetrader or any other trading site. I've come to the same conclusion. You should do the same.

    N.B. this advice also applies to the internet and life in general. The internet is basically a waste of time, it is like television for the 21st century. 99% of time you spend online - that is not essential for work - is a waste of money, and reduces your satisfaction with life. A few months ago I actually removed my router from my home, so now I only go online at the office (I had to actually borrow a friend's router to make this post) and can't use the net from my house. I have no twitter account, facebook, myspace, or even television and I only now use email for essential work functions. My work productivity, P&L, enjoyment with my leisure time, physical condition, sex life and satisfaction in general have all improved noticeably. I strongly recommend that you not only start ignoring useless waffle and information with trading, but with life in general. Cut out the crap, filter out the fuckwittery, and move on.

    Since I know that 98% of you will remain hopelessly addicted to unproductive, distressing activity such as waffling about the markets, watching CNBC/tv, or surfing pointless internet sites, I will try to help you fools as well by recommending that you at least avoid the following time sinks and P&L destroyers:

    CNBC - this should be obvious. NEVER EVER watch this channel unless you like becoming poorer and dumber. For my purposes I hope you watch it as much as possible because sometimes you might be my counterparty, but for your own sake you should never watch a second of it as long as you live.

    Bloomberg - they are good for raw data ONLY. In recent years they have shown a disturbing tendency to decrease their signal to pure-unadulterated-bullcrap ratio, by churning out an unending stream of utterly ridiculous and despicable junk masquerading as news. Anyone who has gone to bloomberg.com knows what I mean - arts reviews, car reviews, "social" commentary with a financial slant; opinions by REPORTERS on where the market is going (hahahaha); anything but actual news or proper financial reporting, in other words. Tear up your contract, trash your terminal, throw it out the window and switch to Reuters instead.

    Financial blogs - the worst of the worst. Every single financial blog is pure garbage and ALWAYS reduces your P&L if you read it. There has never been a blog that makes you a more profitable trader. Even the 0.01% of financial bloggers who have ever traded successfully as a career don't help you, for the same reason as reading Soros talking about the markets doesn't help you make 35% per annum. The only interaction you should have with financial blogs is to do a DDOS attack on them so that the average retail punter loses a bit less money due to no longer being able to follow their dumb advice.

    Market commentary sites - thestreet/realmoney.com, cnn.com, cnbc.com, bloomberg.com. Pure garbage, you will never make money following these.

    Market newsletters & talking heads - Faber, Gartman, Rogers, Jim Grant etc. Totally worthless, they never give stops, timescales, entry & exit points, risk management, "what if I'm wrong" contingency plans etc. In other words, they don't do anything for your trading. Ignore them. Everything they say can be spotted - without the political bias and bullshit - by simply looking at a price chart or the new 52 week highs/lows list.

    Despite being a dumb human like the rest of you, and therefore prone to bad habits and stupidity, I will do the best to follow my own conclusions. I will stick around a few days to reply to anyone who feels this thread is worth commenting on, and then I will bid you farewell and leave ET for good - I only returned to post this, so my job will be done. I am confident that you will either make more money, or lose less money by following my advice, and your life will probably become more enjoyable as well.

    And if I'm wrong? Well, it's possible, but consider this - you could do what I did. You could *give it a try*. Stop all the P&L destroyers that I mentioned in this thread, but only for 3 months. See the difference. If you do better in those 3 months, then it's likely I was right. But if you find that CNBC, ET, and blog withdrawal means you can't trade for shit, then fine - go back to it. At least give my advice a try - it could, after all, change your life.
     
    redbaron1981 likes this.
  3. call this a donation to ET Anonymous. thanks for the effort... boredom is a powerful force to overcome...I think that is what keeps most here.

    P.S.

    gnome is still lurking around... Scataphagos or something like that is his new name
     
  4. Thanks for this. Always could use more $ in the pocket and will be looking to reevaluate my own use of time.
     
  5. maxpi

    maxpi

    Agreed on all nine.. I'm addicted to ET somehow, the political fights are what keeps me coming here.. and very occasionally there is a post somewhere that links to something I never knew...

    I wonder if I can break the ET addiction.. I wonder if any sites on the left will allow me to post too.. I'm going to look at the top fifty and see if they moderate things, it appears so, all I've seen so far at a quick look is cheerleading and no opposition...
     
  6. jnorty

    jnorty

    great note? all of them are correct.the more time one is on chat rooms and net boards the worse they do.get up early each am and do your own homework and execute your gameplan daily.i get a kick out of people here who think others can help them make money. only you can control your own destiny.the more distractions the worse one does
     
  7. Ghost of Cutten,

    So how do you do your own market research without looking at the trash that's out there? I mean, I wold think you are at least looking at the headlines and rubbish to perhaps setup a contrary play. Or do you purely look at the numbers, price, with no story or headlines as to why the media and gurus think prices is what it is?

    I have started to create my own models and scenarios, regardless of the "experts" and opinions on tv. This has helped me become my own mind in trading. Though it's often tempting to look to see what the herd is doing via bloomberg, faber, gartman, etc.

    Also, can you give a list of top 3 books that helped your P&L?
     
  8. TraDaToR

    TraDaToR

    I agree that surfing and especially posting is detrimental to P§L but those market screens are too damn boring to watch for 8 hours without distraction.
     
  9. Life infront of the screen, is no life at all. Agree 100%.

    Recently, I decided to cut down and get out more.

    What finally clinched it for me, in terms of profitability, was nothing but uninterrupted screen-time. Not ET. Its more like a facebook for traders to screw around and bullshit each other.
     
  10. Albert

    Albert

    I have a list of rules (which I sometimes follow) and the number one rule is "don't talk about your trading." It is as sure as day following night that the minute I start talking about my P/L, my strategies or giving advice to somebody that the plug gets pulled and the account starts to drain out. That would be clockwise, as I'm in the northern hemisphere, and kinda gets the double entendre for wasted time in there too. Nice.
     
    #10     Aug 19, 2009