When I was trading in a prop firm it was true that most guys did not last long and they all blew up there acounts. Meanwile the office managers would watch everyones trades but never traded period since they probablly never made it themselves and added to the 95% myth. So what if you started a prop firm and just faded every newbies trade. Considering that 95% of them are going to blow up , then just due the exact opposite and you should make a killing. This is just some wierd idea I always thought about but was always curious to know if it would work. What does everone else think. Maybee this is how the Bright brothers are making all there money. LOL.
If you set up a computer to randomly trade (long and short) you loose money. If you have another computer doing the opposite trades you still loose money. The two computers are randomly up and down at opposite times but over the long run the win/loss is 50/50 and with commissions it is a loosing proposition. So is a loosing beginner a random computer or a brilliant trader NOT. My guess is that it is the former, but I'm just guessing
But if a "loosing" beginning trader is a former computer it's just a guess NOT. Yeah, it doesn't make any sense. Neither does this thread.
I read in Carters book where he said brokers would target bad traders and take the other side of their trades. I agree that this would be a great strategy but I did not think it was legal. Can a broker take the other side of your trades?
The only way this might work is in a situation where a trader blows up account by averaging into a losing trade.
Why would you bother. Just hold their money rather than place the trade. When the odd Trader's account becomes consistently in the black, then place his trades with the exchange and bank his comms in the normal manner.
Brilliant. Broker makes extra $ in savings in spread/commissions AND takes the other side effectively. Broker would have to target pool of small new traders... ...Illegal