I'd like to throw some ideas out and see if others have struggled with the same issues. Like all of us, I have some deep set beliefs that have been ingrained in my psyche since I was just a pup. Basically I believe that one has to 'earn' their success in life. I believe that hard work, dedication, discipline, personal responsibility will all get rewarded in one way or another over the long term. I also believe that you need to provide something of value in order to receive monetary rewards. I agree with the phrase "You can achieve everything you want, if you help enough other people get what they want". And there's the rub -- this is where I struggle with my trading beliefs. In the back of my mind, a little voice keeps nagging at me saying things like: "What does trading actually provide? All you're doing is transferring money from one traders account to another (hopefully in to yours!) But what have you actually accomplished? What value or service do you provide as a trader?" Since I can't come up with any real perceived 'value' in trading, I think that the little voice keeps trying to hold me back. I've been following the markets since the '87 crash, been trading futures since 1991, but have never been able to achieve the levels that I'd like. Yes, I know that trading provides liquidity, exchanges risk from commercial hedgers to speculators, etc., etc., but I don't believe that's enough. (hey, maybe that's my problem?) What real value do we provide? It's a zero sum game for futures, so when you 'win' at trading, someone else 'lost' -- you've taken their money. But what have you provided in exchange? Maybe you just gave them "exactly what they wanted from the markets", to quote Ed Seykota. I think that some of these same issues are possibly why a Don Bright will post some of his stuff on this board, and why a Linda Bradford Raschke posts charts on the web for free -- they feel that they're 'providing value' and in return they will be rewarded... oh, boy, this last line will probably provoke some replies -- sorry Don! ;-) Has anyone else battled these same demons? If so, how have you resolved them? Or am I just nuts? (be gentle now....) Please keep this thread positive -- I'm honestly believe that many others are out there struggling with these same issues, and we'll all benefit from the discussion. Thanks in advance...
Every time some "respectable" investor buys a stock and the spread is not a mile wide, it is because the stock has high volume, which often comes from traders. Traders add volume, which creates a more efficient market. This benefits just about everyone.
i guess you could look at it like what trading allows you to do. gives you more free time to spend with your family, volunteer, etc. the monetary rewards may allow to give more to charities, provide for family, friends. just some ramblings in addition to providing liquidity.
Mark Douglas' "Trading in the Zone" is an excellent book on trading psychology, specifically on "trading demons" and knowing yourself. I rate it a "strong buy," lol. He's also going to be giving an online workshop in March. If you want details, email me.
Thought a lot about this.........................[1]Enjoy it but also get to help market makers[like Joshua Lukeman], specialists like TRW.........................[2]Suggest you settle it a.s.a.p.Enjoy the honorable people who were or are in trading-Jack Schwagers 3 books,Solomon,[proverbs writer.sportsman.......]....................................[3]Many more but will close with a great contrary indicator[hope i dont keep candletrader from fun]Forgive the terrorists,who attacked USA;stock market,but do not forget to drop ''daisy cutters''on them![4]Get to help other traders ,book sellers,i have to know how to trade a trend to honestly do that...............
In a word: Insurance. This is especially true of the derivative markets. We allow others to use us as insurance against possible decline. It makes sense that when I sell an option I obtain a profit (premium) for my risk. That is was insurance is all about... Think of it as an insurance industry. Would you feel bad as an insurance agent? After all, most of the time you will be taking more money in than shelling out... As I said before, you provide the insurance so that when people want to sell their stock you provide liquidity for them to do so... so that when they want to hedge their portfolio to reduce risk you provide avenues for them. I believe that I should be paid very well for my hard work...as an insurance salesman...
Going off subject for just a moment, but murray could you write a sentence that flows, I might just find what you say interesting?
Ok, here's my take -- remember that liquid markets do not just benefit other traders, but facilitate the entire capital formation process. Without an efficient, stable market (for hedging risk, going public, getting capital for expansion, allowing government to borrow efficiently, etc.) the entire corporate structure would be impossible. Look at the difference between the corporate activities (and corresponding general standard of living) between the US and other countries like Russia or the Eastern Bloc countries for example, much of which has to do with the efficiency of the capital markets. Russia has a wealth of science, raw materials, hardworking population, etc., but one thing that has hindered its progress over the past decade is a strong legal and capital system to make investment there feasible. Collectively, traders not only keep the markets liquid and active, but serve pricing and checking/balancing functions, as well. A market with no participants is like no market at all.
Thanks to all for the suggestions and comments so far. To StockApprentice, who said, ".... Would you feel bad ...." It's not that I feel bad, in fact I feel quite good when I have a 4 figure day! But when I've had maybe three of those in a row, I feel *very* uneasy. Something inside says something's not right -- there's an internal conflict. And guess what? I have tended to quickly give most of the winnings back. And then I start to claw and scratch and work to get them back. What I want to do is reach a point where I'm very comfortable with what I've earned. Inner peace? I don't know if that's it, but I'm still on the quest ....