When we gamble on horses or dogs, we know many consistencies, they run, the run the same direction, the track has a certain length, we can estimate the time, we can gauge quality and conditions, we calculate the odds, we place money down and hope / expect a return. Only the outcome we do not know ahead of time. No different from trading.
Exactly! Unfortunatelly not many people understand what you say. As long as they have no "system" with a systematic algorithmic approach, they will never understand it. I have something similar to what you describe. If people say that trading is gambling, they still have a long way to go to become a successful trader. We could do an experiment and throw dices to decide if we go long or short, and when to exit. And then compare the stats with trading with a systematic algorithmic approach. I am sure that the trader will beat the gambler with the dices.
There is a famous saying in this regard: the law of the hammer or Maslow's hammer Certainly, if you can't even conceive how $$$ is printed with a consistent algorithmic approach, everything will obviously look to you like a horse race For a casual internet chat, I can't do much else but assure you that this is not really the case. Then, of course, you can continue to see everything as a gamble. You see an athlete doing a double backflip dismount, and you may think he is gambling his life. He might respond: Well, I have been training for the last 25 years for that. Where is the boundary between a gamble and something carefully planned and based on objective elements? After all, we might be "gambling" our lives away every day, in some broad sense
When you place your 'bet' on a trade can you determine with exactness what the outcome will be? Can you say the trade will be exactly this price at this time when I sell? No! You do not know for certain each individual 'bet' will be a winner or loser or at what price or at what time.
Your limit is that you do not know what I do in particular or, in general, how far human imagination can reach in this area with decades of hard work. I will only tell you this. In my approach, there are no "trades" at all So just imagine how far you can be from conceiving what I may be doing if you start talking of "winning" and "losing" trades, which from my personal point of view are plain naive nonsense... If you start talking of "winners" or "losers" of course you do have gambles in mind... and you are already headed the wrong way PS. If you are curious, and in case you have missed it, I have an ongoing journal here on ET, I use for "public demonstrations": https://www.elitetrader.com/et/thre...-and-market-drift.364633/page-51#post-5846504 (This requires good capital, nothing good over there for small funds.)
I can only reply this way; I'm a retail trader who only trades stocks, long. I have basically zero knowledge of other forms of trading. Excuse my ignorance, when you mention "no trades at all"...., "....may be doing if you start talking of "winning" and "losing" trades, which from my personal point of view are plain naive nonsense... "
I get the sarcasm but keep in mind that it's just a never-ending journey, themickey. We all have started and transited somewhere and believed things... that is why I strongly believe that anyone has to do his own journey, and usually, it's of not much use to try to change anyone's mind or approach. It's just a very slow process that takes a long time... From naive "trades" to the conception of a continuous flow of long/short hedging orders, algorithmically controlled, and a stop recovery mechanism, there is quite a journey to do... The only thing I can do is provocatively plant the "seed of doubt" against all the nonsense perpetuated by the herd PS. btw, I saw your journal about trading ASX
Been trading since 1978, for myself it never been about the money, I think most humans are dreamers first than learn ways how not to lose so often or so large. Like in life, the complicated shit you have to learn is pushed on back burner for years like stats, risk management and accuracy. Pushing back causes accounts to vanish. I did it first by learning long term trading stocks, then scalping/long term commodities/futures. Then directional stock option credit spreads and always continuing education on long term commodities. As years turn to decades, I have dropped long term stocks, greatly reduced scalping index and energy futures, plowing more into long term commodities and credit spreads. Being in my late 60's, it still never been bout the money, it is about execution perfectly through mostly automation and some manual. Most forget that trading is a business, if you fail, it was caused by horrible management. Larger the account, tougher to get options to hedge, have to think outside the norms to hedge.
I don't have any opinion. I am just curious why $10MM can do so much better than $2MM. As a a retail trading my own money, I have a discretionary approach, not systematic computer driven auto trades. My system does have positive expectancy but the rate of return is independent of the size of my trades. If a larger amount inherently can produce better results, I can add more money into the account. Thank you for your time.
I think I have already answered your question ironchef. Which part, in particular, of the reply was not clear? First of all, I did not say that of "rate of return is independent of the size of my trades". Again you are reasoning in terms of fixed trades. That is you are projecting your own idea of trading. While I do not even use the concept of "trade". If you are sitting at a poker table and have 10 bucks in your pocket, while your opponent has 1MM, who is going to lose at the end of the day?