excellent example of the type of thinking I was promulgating. Thanks for mentioning. Here's a byte from his 'scenarios for global risk management and global investment strategies'.
Having been a âpro gamblerâ I can say from experience that Horseracing and Trading have many, many similarities. For a start most people lose at horse racing because they have no idea what they are up against and they use techniques that are laughably naïve. Thatâs like the usual standard of TA youâll find on ET. Yet some say thatâs the best way to make money. It takes incredible skill to be able to read a formbook and rate each horses chances and make a living from it. Thatâs like fundamental analysis. Some say thatâs the best way to make money. Smaller stables often canât cover the cost of keeping a racehorse with the meagre rewards from winning the odd race, so they aim to get a horse in top form and bet on it to overturn the formbook. Thatâs like insider information. Some say thatâs the best way to make money. Some bet on winning trainers who have outstanding records at particular races. Thatâs like following executive officers 144âs and 13Dâs when they have a record of buying huge amounts of their own shares prior to quarterly reports and consistently make a killing. Some say thatâs the best way to make money. Some use computers and develop algos that chomp through huge volumes of data to discover clues that manual analysis canât compete with. Itâs just like the banks do today. Some say thatâs the best way to make money. Some say money management is the key because achieving a good winning percentage is impossible, they say. Youâll read about those types on ET. Some say thatâs the best way to make money. Some bet using systems, often designed by someone who makes their living designing and selling systems. Look at the championships: Some say thatâs the best way to make money. Some bet using a DOM looking for weight of money movements that allow scalping. The dome was developed from the financial markets and looks much like ours. You can âgreenâ the bet taking both sides so you canât loose. Some say thatâs the best way to make money. Some bet using arbitrage using the spread between two horses. Some say thatâs the best way to make money because profits are guaranteed. I could go on and on, but if I had to select two characteristics that are most common between the average horse punter and the average trader, theyâd be⦠1.They paid a ridiculously low price in terms of research and organised study while dreaming of making a killing 2.They have daft ideas about what tools do and donât work, not realising itâs not the tool thatâs the problem. All the tools work. Betting on horses doesnât have to be a gamble. It doesnât have to be a zero-sum game. There are many strategies that put the odds in your favour. But if your strategy is basic, youâll play it as a zero-sum game and you are vulnerable to compound probabilities that given time probably will destroy your bank. Trading is not a zero-sum game therefore there is no reason for it to be a gamble if you know how to read the market. You can decide the best time to enter the fray and if it doesnât do as you expect you can exit close to intact. If you donât understand how to read the market and play safe then given time, your emotions and stupidity will destroy your account. That is the nature of gambling. Once you understand, you can glance at âtradersâ comments on ET and know who is a trader, what their strategy is and who is a gambler. Out of 100,000 members, youâll be lucky to find 0.1% who are traders and are active on ET. The most active and verbose are usually fatally flawed⦠and every gambling den has such sages.
How can horse racing not be (sub) zero sum? Read again, I gave 2 examples. Greening the book and arbs. How can everyone come out a winner? Read again. The majority will never invest the time and effort to develop a winning technique.
You have time to word count? lol! Please count the rest of my posts, I'm as facinated by your depths as your reading and comprehension skills.
Yoohoo - I don't think you're understanding 'zero sum'. A positive sum game implies a net increase in wealth across all participants. In horse race betting as in other gambling there is no net wealth increase. Arguably the same is true of trading. However, investing is positive sum.
Copy and paste to Word document and then go to tools for word count. Less than 10 seconds. However, the observation was immediate. I am equally fascinated by your depth (if not your spelling). Therefore, I continue to await your explanation as to how horse race betting is not (sub) zero sum, which implies that you believe everyone can theoretically come out a winner. Do tell.
trading is VERY negative sum, as the trader faces brokers who extract commissions and usually hold the trader's money interest free as the trader usually loses quite a bit of money during their learning curve. signal/advice sellers who usually sell books, charge subscriptions, sell black box systems, have seminars or other ways to make money from traders data providers who charge some form of recurring fee from market makers and exchanges - with fees and slippage fed/state governments, who charge taxes on income and capital gains trader mistakes in judgment, execution or money management