Hi MakingBank, After we all did our best, please do us a return favor. Tell us, what did you find out?
Your journal is too funny. I love the part where you draw conclusions based on characteristics of a system traded for 2 months.
Only a trader that has retired on their winnings may consider themselves successful. Anything less is static IMO. I`ll simply state that I make more than I lose....for now.
Zero sum assumes 1 loses and 1 wins. But in equties, you could have bought shares from someone who made a gain themselves and you may sell shares to someone else at a higher price and then may do the same etc etc. In futures, the game is zero sum, since 1 of you will be right and the other wrong.
Ya, that is one way to think about it, but what if say in trading, you and the market knows that XYZ is worth $25. If you sell at prices higher than $25, you are essentially taking advantage of someone else. You won and the other trader lost, because he was uninformed that the price of XYZ was $25.
No one truly knows what the price of the stock should be, we are all speculating. Maybe the other trader lost out on more potential profits but thats not really what zero sum means. If he made a profit, even one penny, and then sells it to you and you make 5 pts, you both were technically "winners" on the trade even though your gain was much more significant.
http://www.turtletrader.com/zerosum.pdf People talking about zero-sum here, this has been an academic subject for ages. Most markets (not all) perform valuable services within the larger structures of the economy. And services get paid. Companies are risk-averse and they're willing to pay for getting rid of it. Insurance business is not a zero-sum game either.
I will post my expirience to this point. I'm 24 years old, and have been trading for just about a year. Trading is not my fulltime job, but luckily, my schedule allows me to devote alot of time to it (usually). I've always traded the ES. my first, perhaps 2 months were terribly unprofitable, no trading plan or discipline. My next 3-6 months I created a mediocre plan and traded it w/ mediocre discipline...i had periods of very nice trades/profitability and periods of backsliding. Past 3 or 4 months...continuing to refine my plan, and my trades are becoming much more disciplined, profitability and drawdowns are evening out. I still have an incredibly long way to go. Keep in mind, this is the expirience of a person that does not depend on trading for income, and I'm doing it on my own. Things could be sped up, I imagine, if I was learning from someone. As well, I mention several times I was undisciplined, though I only realized that in hindsite. At the time I thought I was being disciplined because I stuck to my stops. I realize now that truly being disiplined is a hell of alot more than that.