Do you feel insulted when people like Brett Steenbarger talks down to traders?

Discussion in 'Professional Trading' started by mahram, May 8, 2006.

do you agree all home base traders are amateurs

  1. yes

    13 vote(s)
  2. no

    48 vote(s)
  1. In brett steenbarger's latest post he considers all home base traders as nothing as amateurs and nothing to offer. Do you agree with him?

    How Professional Traders Differ From Amateurs

    I very recently had the pleasure of meeting with a group of professional traders who have been very successful, but who are also looking to maintain and extend their success. Many of these are traders who can make or lose a million dollars or more--in a single day. How do such traders differ from the average independent trader who is trying to make a living? Several differences between the professionals and amateurs struck me:

    1) Resources - These professionals had a wealth of analytic resources at their fingertips--and they used these resources. They had a keen eye for how their market should be priced and took advantage of occasions when it moved from that benchmark.

    2) Information Networks - The pros knew other pros and constantly talked with them to find out what was going on in the marketplace. This network was an important edge for many of the traders.

    3) Strategy - Every trader I talked with could enunciate his or her specific edge in the marketplace and, in some fashion, could quantify that. I could not find a pure gut trader in the bunch.

    4) Adaptation - Each of the pros knew details of his or her P/L, but also detailed trading statistics such as Sharpe ratios. When the stats veered off course, they were quick to make adjustments.

    5) Complexity - The professional traders employed complex trading strategies that relied on trading different instruments and timeframes, all to exploit a single idea. Many of these strategies involved hedges that managed risk, even as they aggressively pursued their ideas. The idea of buying/selling a single thing and exiting it never arose in my conversations with them.

    The most striking difference is that the professional traders viewed their work not only as a career, but as a profession. They were in this for the long haul, and many had long years of experience. They almost always had advanced (often graduate) education in finance or related fields and understood the complexity of markets. They also possessed tools to quantify risk and reward that extend far beyond the popular trading literature.

    The bottom line? Knowledge matters. Whether you're a carpenter, artist, or trader, it is very difficult to obtain professional results without professional tools and training.
  2. analytics ain't gonna help u make more $$ or become a better trader...clearly he's got no clue what he's talkin' 'bout..hes full of bs
  3. Do I feel insulted? Not at all. I don't think he is being condescending but merely reporting an observation. The fact also remains that most professional traders seem to produce prettyordinary returns, at least the ones that are publicly reported.

    Dr. Brett is one of the good guys. He produces a wealth of free material that is quite useful, and he seems to have a genuine desire to help people.
  4. What I would really like to know is how much Steenbarger makes trading as he claims to be a trader too.
  5. Remember, Brett Steenbarger wrote a glowing review of Jon Markman's book... he's quite the log roller.

  6. I looked at site and especially words like performance.

    I failed to locate any "performance" as in his trading results.
  7. steenbab


    Hello to all, and thanks for the thread. I'm sorry to see that my posting on professional and amateur traders came across as condescending. That was not my intention. I was simply trying to compare the professional trader who has sustained success with "the average independent trader who is trying to make a living".

    I don't think it's any surprise to most people that the average trader does not sustain profitability in the marketplace. A very well-placed industry source recently shared with me that the time it takes the average independent trader to open an account to the time he/she runs through that account is less than 7 months.

    Does that mean that all independent traders are worthless amateurs? Of course not. I know a number of successful retail traders personally and can attest to their skills and results. But I also have seen how they trade and know that they have put in professional-grade efforts to identify their edge in the markets and to keep ahead of the curve as markets change.

    I wrote my post to counteract the unfortunate hype in the industry that promises wonderful results if you just use a particular vendor's software or follow a special guru's recommendations. It's just not that easy. The average athlete doesn't have a realistic shot at being a pro. The average singer doesn't end up on Broadway. And when you see amateurs truly succeed--think of Kelly Clarkson winning American Idol and going on to record a blockbuster album--it's because they are not average.

    In any case, thanks for the opportunity for clarification. I sincerely apologize to any I might have offended.
  8. Thanks for the clarification. How about sharing with us your own trading results.
  9. ja, but u analytics stuff has no bearin' on traders performance if somethin' its exactly da opposite, dunno who told u that but it is complete bs; da simple u keep it da better.
  10. Actually, better yet, how about the trading results at the trading firm he was employed at. Since he wants to distinguish between the amateurs and the pro's, I'd be curious to find out how many traders are left at the firm.
    #10     May 8, 2006