Anyone who loses all their capital in 1 trade is a dumb fuck. They either - Tried to play with insufficient capital - Had poor money management - Got raped by shorting something like DJ and was 50% under water before their stop kicked in -- Very rare for this to happen, most likely it's the trader's own fault So this really shouldn't be a consideration.
I hate these "you can't make money trading" posts. Why do these people even bother reading ET. Why do I think I can make a living at it? Oh, maybe because I have been doing it for 20 years now. No other income, only trading.
Actually, I do not mean that people can't make money trading. I do believe that there must be some smart people capable of doing that. I have no question about it. I respect their success like those great trader in "Market Wizard". After all, to be successful in trading is not that easy. ET is absolutely full of smarties with loads of experience in trading. It would be lovely that I can get something from you all. That's why I come here. I hope that silly questions from newbies like me don't offend you much.
I think we're in the business of interpreting signals that determine continuation or change of trend. The instruments trade are liquid and the signals to which we respond take into account the actions of a vast number of market participants. Not a single participant can move the market and as such there is no real competition between participants, whether they're humans or computers.
This ain't rocket science, but it does take a certain type of person to do it. It's like any tough profession (athletes, singers, writing), if it were easy everyone would be doing it. It is possible, it does take resources, time and in the end most will not make it. Hey, it's like American Idol, year after year there's tons that try and only a handful in the end.
If it were easy, not only would everybody be doing it but it would no longer pose enough of a challenge to intrest me. Though that in itself poses a different set of questions...for if everyone is winning then whos doing the losing? isn't it a zero sum game to some degree? somebody has to lose in order for someone to win. A new level of complexity would then arise. What this inherently signals to me is that the market is complex enough to accommodate a variety of different approaches that can simultaneously work but only for as long as it takes for the market to adapt and change thereby setting in motion the need for a new approach i.e. the market is a constantly evolving and the best traders are those that are able to keep pace and change along with it.
Programs don't make trading more sophisticated; they just carry out the intentions of a human in an algorithmic fashion. Woo-hoo! As a scalper, I am very aware of the effect programs have on stocks: even though 80% of the NYSE's volume is program trading, it's still purely a game of reading people's intentions. Sometimes a program will join you with whatever bid you put in. Sometimes the program will bid higher than you. So if you're long a stock, you put in a small bid for 100 shares and the program joins you. Then, you bid higher, and the program chases you. You keep doing this until the program stops joining you, and then you pull your bid while simultaneously selling to the computer you just tricked into paying a higher than necessasary price. It's not always that simple - sometimes you put the bid in, get filled, and then the program stops... but that kind of activity doesn't make the market "more sophisticated." Most the programs are add-liquidity boxes which put in bids/offers... other programs will bring bids in at higher levels, or offers at lower levels, and switch which market place (ECNs, NYSE, etc.) the order is on. An interesting buy program I've seen is one that buys stock when I buy. If I buy 200 shares at 32.12, the program buys 200 shares immediately; if I buy 400, the program buys 400. It always buys at the same price I buy at, never high, and always the same size or less (less if there is no more available at a given price level). What does that tell me? That some guy is trying to accumulate stock. Will the stock go up? Maybe, but probably not because of the buy program - it's just one bullish indicator - but it doesn't tell me the strength of the sellers. Until computers have AI that is actually SMARTER than humans, which is a long way off, trading will be dominated by humans. Anyone who purports that (I don't meant this to sound like a snob or an elitest at all) program trading makes traidng "more complicated" is probably not that familiar with the dynamics of a marketplace.
It is such a prejudiced question.. I just can't bring myself to answer it for you. Bots are taking over,,,,, less millionaires.. how the heck would you know that?? You seem to assume that none of us can figure out the way forward. WHAT IF ALL THE BOT TRADING MADE IT BETTER FOR ME? DID YOU THINK OF THAT? It seems like it, ok?? You are one of those guys that ridicules any new idea are you not?? Laughs at people with new ideas, no?? Stands by and questions everything that somebody is doing until they throw you out forcibly, yes??