Gambler vs Trader

Discussion in 'Trading' started by emg, Feb 22, 2011.

  1. emg

    emg

    This thread will help to decide if newbies and amateur want to pursue trading.




    A successful full time trader:

    1) they have a capital to start trading a minimum $500K to make a comfortable living.

    2) they do not subscribe 3rd party vendors and they do not google search for a holy grail system and spend thousands of dollar on useless 3rd party vendors books, softwares, and indicators.

    In fact, most of the successful traders are former prop trader, bank trader, hedge fund trader, floor trader, or begin their career working in the trader desk for a bank, brokerage, mutual funds, hedge funds, prop firm, and HFT firms.

    3) Most of them have a college degree and the most successful traders hold a Master and PhD degrees in engineer (Math, computer)

    Those that graduate a PhD degree have a higher successful rate of getting hired as a trader in big banks (bank of america, chase, citi, etc) or big brokerages (goldman sach). Those brokerages/banks have a training program to help them succeed. When these guys succeed, they will know for the fact that a huge capital $500K minimum is needed to become a successful full time trader and play the game the RIGHT WAY. They are too intelligence not to overleverage, but trade consistently and constantly.


    Gambler:

    1) They are not organized. They have no clue what is risk/reward trading. They do not have experience trading. They want to start trading with less than $5000. They overleverage like a gambler.

    For example, if they are profiting 3 days in a row, they will up it or put more money on the table.

    2) They spend a lot of time google searching for a holy grail systems. They are willing to spend thousands of dollars on worthless 3rd party vendors books, softwares, indicators, boot camp, trading room, coaching 1 to 1. In other word, most 3rd party vendors are fail traders and the newbies/amateur are spending incredible money learning how to lose.

    Losers learning losers on how to trade

    3) They have no idea who are their competitors or have no idea how the game works.

    4) There are many people who are still papertrading for 5 plus years. That person could have gone to a prestige college and take a degree on what the banks/brokerages/hedge funds are looking to hire instead of wasting their time papertrading.

    5) More than 90% of small traders lose! They lose because they are a gambler. They just lose.
     
  2. Shagi

    Shagi

    YAWN - Blah,Blah, Blah you need a million blah blah
     
  3. emg

    emg


    you are right, majority of the hedge fund owners began to trade more than a million to make money trading. Those owners know that in order to be a successful traders, they need a million
     
  4. Shagi

    Shagi

    They need a million becuase they are poor traders. Most of them lose 30%-40% and a million gives them a huge margin for error. Or rather buys them time either lose more money or return 2%.
     
  5. emg,

    Your rules for successful traders (professional traders) is an unfair comparison with the typical type of traders you've classified as losers (retail traders). Simply, you're intentionally comparing Apples (Professional traders) to Oranges (Retail traders).

    Professional Trader - a few examples are an institutional trader, floor trader, hedge fund trader, desk trader for bank et cetera that are on salary. Simply, they can underperform and still get paid, still get vacation, still get health/dental benefits. However, if they outperform...they get performance bonuses. Also, the trading resources they have access to is paid by those they work for...including paying to use particular approved 3rd party vendors (usually a former rank n file).

    Retail Trader - typically your at home trader, arcade trader or prop trader that trades part-time or full-time. Only gets paid when profitable. They can use the same resources as a pro trader but it's expensive and comes out of the retail trader's wallet. Yeah, some retail traders may be ex-pro traders that decided they have enough money saved up to go it on their own but very few fall into this category considering quitting a well paid job with benefits is not something most will do in tough economic times. Yet, the few that do quit a salary trading job to go retail...usually trades different markets in comparison to what's traded by the typical retail trader.

    Thus, out of curiosity, why not compare successful pro traders versus losing pro traders. Just the same, why not compare successful retail traders versus losing retail traders for a fair comparison. If you don't understand, here's a simple analogy of what you're doing here at Elitetrader.com via comparing a "Chef" to someone that's a "Cook at Home". I'm sure there's a better analogy but that's the first one I can quickly think about.

    With that said, ever since the late 1990's, I've seen successful retail traders call themselves pro traders. I personally think that's a far stretch unless they are an ex-professional trader.

    Last of all, most of the retail traders I know are college educated and some with advance degrees. In addition, professional traders can not afford to gamble...if they get caught...they usually get fired or arrested if such is done illegally (without permission). You yourself are a retail trader because professional traders wouldn't be allowed to post trades at a discussion forum as you've been doing in the "ES Journal" thread @ http://www.elitetrader.com/vb/showthread.php?s=&postid=3096111#post3096111

    As for myself, I'm a retail trader although several close personal friends and relatives are professional traders.

    Mark
     
  6. Pekelo

    Pekelo

    Need we say more? :)

    That makes you neither a retail nor a pro, but a buffon....
     
  7. the only reason you'd need 500k or more is if you are trading a tiny edge.

    most here on et make 50-100% on their accounts per month, so 100k is enough
     
  8. Lucias

    Lucias

    500k seems reasonable, 30% of 500k = 150k

    Is it possible to do the same with a tiny account? No but let's take a look at this,

    100k * .30 = 30k = 30/12 = 2.5k

    Assuming your r:r is 1:1 then you need roughly only 2.5k in your account per month to lose. If you can reload 2.5k per month or have savings to keep 2.5k and can find a way to leverage to that degree then it is not that far a stretch to imagine this being possible.

    This is why for retailers should really strive to gain cash flow and trade methods that allow for working a job.
     
  9. Were you a Gambler or a Trader on May 6th?
     
  10. emg

    emg

    <iframe title="YouTube video player" width="480" height="390" src="http://www.youtube.com/embed/kn481KcjvMo" frameborder="0" allowfullscreen></iframe>
     
    #10     Feb 22, 2011