Highest level of education?

Discussion in 'Educational Resources' started by indahook, May 30, 2003.

  1. trader99

    trader99

    Well, Jim Clarke got a Phd and was professor at Stanford in computer science. A few people mentioned it. The rest are true dropouts. But noticed how long ago that was. Almost a century ago. I wonder if the same level of success can be achieved today without some kind of formal education.


    Barriers to entry to many professions are continually rising. If you read the Market Wizard series of books, many of them recounted as recent as the 1970s, a lot of Wall Street traders were bascially sharp boys from Brooklyn who never went to college or even high school. And they worked at Big Wall St firms too. The thing is that the business was "simpler" than. Then in the 80s, they started requiring college degrees. Then MBAs. Then good top school MBAs. And now the rage is Phd in quantitative field just to do prop trading or research. So, the bar is constantly raised. It's also because the field of finance has gotten more complex as well. Now, if you want to trade derivatives especially exotics, they like you to have at least a master in engineering, math, compsci, physics or something. Because it requires at least some level of quantitative education to even begin to understand the basics of these instruments. And some of these groups, even LOOK DOWN at a MBA from Harvard or stuff like that, because a Phd is more useful at this particulat type of trading.

    Having said all that, I think TRADING HAS very LOW CORRELATIONS with intelligence, formal education, or anyting else in life. Having studied a lot of math, engineering, compsci, finance at a top school, I can say it only applies marginally to trading. And in the most RECENT article of ActiveTrader, Victor Niederrhoffer said,"Unfortunately, I found no correlations between trading success and intelligence" HAHA! This is coming from Mr. Harvard undergrad, Phd Univ of Chicago guy. haha.

    So, that tells that the game of trading is played between your ears. Control your mind and you'll master trading. It's easier said than done.

    But for everything else, education is a requirement. Like doctors. I wouldn't go to a doctor if he didn't go to medical school and learned anatomy inside out and his subspecialty. Same with lawyers. etc.

    There's nothing wrong or bad with not having a formal education. But having some wouldn't hurt. That's my opinion on it. I just see it as learning for learning sakes. And learning comes in all forms. Just not books and schools.
     
    #41     Jun 2, 2003

  2. With all due respect to those that can do a two-tailed z-test,
    I never even heard of one.

    Many of the posters/traders here on ET are brilliant and I enjoy reading their posts. Many of the posters/traders here can write with eloquence befitting paid/professional authors. There really are some excellent writers here and although I don't always agree with what is being said :), some of these ET'ers really know how to make it sound good anyway.

    Sometimes I see traders here talking about programming mechanical systems and playing options and spreads, puts, calls etc. I think that a put is betting on downside and a call is betting on upside, but beyond that it's all over my head.

    I wouldn't know where to begin when it comes to writing code and backtesting systems. It astounds me that some of you folks can walk through that sort of thing with ease.

    To everyone here that has a degree, my hat is off to you. You had/or made the opportunity to attend a school of higher education and went for it, stuck to it and did what you needed to do to get that education. I'm happy for you and proud of you for your persistence and fortitude. No one can ever take that away from you.

    I am not formally educated (as I'm sure most of you can tell) and that's ok. However, I don't agree that because I "can't do a two tailed z test (or don't know what one is!)", that I "should hire professional money management help -- that is, stick to mutual funds, hedge funds, and CTA's."

    I don't need statistics (in a formal sense) to "know the difference between a good(bad) trading strategy and a lucky(unlucky) streak?"

    Both of these questions are easily enough answered by whether or not I'm keeping my trading account growth curve in an overall uptrend and getting my bills paid on a consistent and continued basis.

    At my age now, I seriously doubt that I will ever get a formal education and I know for a fact that I don't have the mind that is capable of writing code and formulas for system strategies. My mind just doesn't go but so far with math. Upon this, I cannot improve much if any. (but I can usually remember where support and resistance was for the past serveral days)

    I also don't have the mind that will write with eloquence the way some of these folks can write. Heck, I'm doing good just to get most of the spelling correct let alone being able to spout out grand ideas and make it sound great. Most of the time I guess at where to put my commas and what not.

    Some of these guys are so good at expressing there ideas (and so called facts) through written word that even when I don't agree with them, I almost find myself wanting to say, thank-you......because you sure did write it pretty. :)

    So with all my shortcomings, there is one thing that I can do. I can follow a simple little method and pull a few bucks out of the market on most of the days that I elect to trade. As for not knowing whether or not it's a lucky streak because of not being educated on statistics, hell maybe it is just a lucky streak, but all in all it sure is becoming a long one.

    I suppose that I may never become any more intelligent or have any more intellect than I have right now and I swear, I think that the older I get, that which I hath is steadily declining.

    So I guess I'll just sharpen up some on my wisdom skills and see if that'll carry me over.

    Top O' the morning to ye,

    plumlazy
     
    #42     Jun 2, 2003
  3. Another really interesting thread!

    Well, from my personal point of view, let me just make a few points about whether you need formal education for trading or not?

    1. Yes, I am formally educated (13 Year German Elite High etc!)

    2. Common formal school/college education doesn't help much with trading. Investing, maybe a bit - But not trading.

    3. I probably would have started off as a better trader if I hadn't been burdened with the preoccupations of formal school!

    4. I had to throw away 1/2 of my school education in order to absorb the amazing real world insights trading brought to me.

    5. The other 1/2 I forgot. Anybody remembers school?


    I would definitely say that the mainstream education most people receive is useless, if not even detrimental to becoming a trader. Trading requires you to re-think and in many ways completely change your perception of the world and thinking patterns. The more preoccupied you're to start with (the more ingrained 'common knowledge' is), the more difficult it can be to become a successful trader.

    I know A LOT of serious academics who had their heads handed to them trading, thinking they're smarter than everybody. Trading doesn't work that way. Analysis alone is not the answer.

    Academics tend to think they can ANALyze data to death and eventually make conclusions as to where the stock/future/curr. is gonna go. It's because they've been taught every problem can be solved with research and study. That's their major problem.

    NOBODY can tell with certainty where ANYTHING is going to go. If there's anybody here who can, congrats, but it's more likely that an elephant walks across the pacific.

    NO TRADER NEEDS TO know where anything is going to go. Trading is not about knowledge, it's about discipline!
    I know a trader who is right only 23% of the time he puts on a trade, and he makes boatloads of money - He certainly doesn't get an ego boost from his predictions, but he's disciplined enough to cut his losses extremely short!

    Admitted, he makes a lot more money than me (in rel.% gain).


    Personally, I like to compare good trading to refined warfare. Any kind of warfare from unarmed Martial Arts to Flying an F-16 Tomcat Fighter - Sure, you need education of technique, background and constant repetition in order to make as many things as possible automatic - But when it comes to combat, Samurai or Wingman, it's decided by your ice-cold discipline and complete detachment from anger and fear. (As a trader, you may add greed and sloth)

    Don't get me wrong. I'm an absolute pacifist by heart - But trading is war. You win = they lose. There's no spare money!

    Now, how many great academics do you know of that are great warriors? Word warriors, yeah. Good for planning, strategy etc too maybe - But not so much swinging a sword / pulling the trigger.

    I fully respect people who go through decades of university etc etc, but I think we should remind ourselves that formal school education is mainly designed to train workers - Not leaders!
    We mainly get our marks/certificates etc to show to somebody else. A boss, whatever. So we get a better job (JOB = Just Over Broke). That's the system. Few can beat it.

    Some can. Some of them are traders. Many are business owners. Just look at highschool/college dropouts like Larry Elisson (ORCL), Robson Walton (Wal-Mart), Bill Gates (MSFT) - They used to be the three richest men in the world!

    In fact, today, 8 of the top 10 richest ppl in the world are drop-outs! Let that sink in a bit. That's 80% of the absolute top.

    Bill Gates slept through lectures because he had been playing poker one night after the other. He kept gambling and getting better, stacking his cash and eventually used it to start-up MSFT!
    Sounds like trading.

    So much for education. :cool:

    ~The Scientist
     
    #43     Jun 2, 2003

  4. I don't know if I could get quite that heavy on the *trading* = *war* metaphor. Just reading about all this fighting wears me out. I think I'll go back to bed now. I just don't feel up to swinging a sword today. :) I prefer a 32 semi automatic, it's a lot lighter and although it may not stop an opponent with the brute force of a sword, it has a little more range and I don't get near as winded if I decide to swing it about a little.

    They don't call me plumlazy for nothing. On second thought, maybe they do. All depends on how you look at it I guess.....

    ........zzzzzzzzzzzzzzzz..........zzzzzzzzzzz...........zzzzzzzzz....
     
    #44     Jun 2, 2003
  5. Well said Scientist. My boss is correct only 32% of the time and he is WAY more profitable than myself and the other trader in our fund. This guy cuts his losses so tight if you didn't know him you would think he was schizophrenic. But when he has a winner its almost as if he sells the top/buys the bottom like clockwork.
     
    #45     Jun 2, 2003
  6. -----------------------------------------------------------------

    indahook, sounds like you're a mini-institution-trader?

    So anyway, if you don't mind me asking, is your boss a scalper trading Lv2 / 1-5-min charts?
    How does he go about it?
    Which issues does he like trading best?
    HOW tight are his stop-losses?
    Does he use (tight) trailing stop-losses as well?

    I'm sure we can all learn from this without sending your boss broke ;P

    Cheers,
    ~ Scientist
     
    #46     Jun 2, 2003
  7. We do run a micro fund. We are very small at just over 1mm(USD$) in assets(big enough to make some dough,small enough for no hassles). No, he does not scalp at all, strictly position trades. The only time any of us day trades is when we take a pos on and is goes against us straight away. Otherwise our holds run from 1 day - "whenever the steam runs out". Our stops are dollar based, so we adjust our size accordingly. ($`s to risk) / stop in points = position size.
     
    #47     Jun 2, 2003

  8. ---------------------------------------------------------------------------

    Wow that IS a microfund. I wonder what you guys think about scalping / intraday? Wouldn't that be less risky? I would imagine the kind of capital you guys have is ideal for scalping & day trading - Big enough to do size (make other traders panic LOL) and small enough not to completely distort price and to move in&out swiftly?
    Is it because you guys don't consider yourselves good enough / too much work / too much stress / too little return / too much risk ? Be great to see how you guys think about trading.
    And finally - I wonder what you guys do all day if you're just position traders? Watch the positions in the BG and do fundamentals?

    May the Tick be with you,
    ~Scientist
     
    #48     Jun 2, 2003
  9. Fundamentals, what are those? :D I should have been more specific. I do day trade, but only the SPY with a 62.7% accuracy. I do OK with it but my bread and butter comes from the swing trades. Holding about 3-5, 500-1k shares positions, minimum 2-1 ratio with an accuracy comparable to my SPY strategy is more than enough to make a living. All my trades come from software that I have programmed to scan my master list of only 467 stocks and indices for certain custom criteria. So the majority of my day is spent wasting time cruising the web. Sorry but glamorous it isn't.
     
    #49     Jun 2, 2003
  10. I have no idea. I'd say it's fundamentally insignificant.
    62.7% intraday? Awesome! Easy issue or good trader? Any tips? :D
    Sounds a bit like OmniTrader :) (Useful program by the way, but I'd say pretty useless for beginners... All those automatic optimization parameters are a huge trap... You need boatloads of experience to use optimized parameters... I still prefer unop.)
    And posting on ET? =D
    Well you could add to your stash by playing online casinos with gambling systems.
    Man, this is just not a glamourous job no matter if you're a pos-trader or a scalper. Whenever you're in doubt if this is a glamorous job or not - Chat up anybody on the street ... "Trader? So you're like glued to the screen all day? Can you make money? Isn't that dangerous? Is that like Michael Douglas in 'Wall Street'?"

    :D ~Scientist
     
    #50     Jun 2, 2003