what really makes money in real life?

Discussion in 'Professional Trading' started by coolweb, Jul 11, 2007.

  1. Do you think its skills ? luck ? or opportunity in trading?

    People always tell people on elitetrader, to just work a little harder, you've only been working 3 years trying to figure out trading , Many people took 10 years. I see this all the time and I realize how wrong it is.

    What really makes money in real life?


    What is OPPORTUNITY?

    When money flows freely, During the gold rush in california, with a shovel , you can take the train to CA, and start digging and make a fortunre. Thats OPPORTUNITY.

    Take a shovel, and head out to california right now, Try digging, Can you make a $1?

    You can't! Regardless of how hard you work.
    Because there is NO OPPORTUNITY.

    Take for example year 2000 , When the market was flying, everybody you knew turned $5k into $500k.
    My own parents who were blue collar who couldn't even understand MACD turned $30k into $750k.

    I ask them today, they can't etch out $2.50 from the market these days.

    It has nothing to do with skills, it has everything to do with OPPORTUNITY.

    Take for example, someone buying a seat on NYSE back in the days, once you have the OPPORTUNITY to scalp orders, you make money with 0 risk.

    If you didn't have opportunity or an extreme edge , you can't make shit.

    Look at the NYSE scalpers these days, are there any left? Maybe 2 out of 10.


    So what I present to you is, should you be looking to break the code or should you be looking for opportunity?

    The people who lost all their money in the stock market in 2002, then went into real estate can tell you the same thing.


    the best trades, don't they always go your way immediatly?
    Did you have to fight for the money?
    Did you have to sweat bullets?
    Never. Once you sweating, you know its going to shitters.


    In business, What makes money quickly means there is a MARKET for it.

    If you can sell the thing instantly, it means theres a market for it.

    If you are selling sand to some guy in arizona, Can you sell it ?
    Is there a market for it?

    How hard will you work to sell 1 grain of sand? I'm sure if you actually found the method, you can make millions.

    Maybe there isn't a market for your trading. Maybe the market is taken by blackboxes all around the world.
    Maybe your liquidity isn't really needed.

    Would you rather be the searcher for OPPORTUNITY or the person who tries to etch out blood from stone in eternal struggle.

    Just some thoughts for people to think about.
    Maybe it'll give you another perspective in trading/business and struggle :)
  2. Nice post.
  3. As my father told me since I was 10 years old. You have to be at the right place at the right time WITH the SKILLS necessary to take advantage of the opportunity should it arise.

    Sure people made a lot of money in the 90's. A monkey could do just as well. To make it in anything you have to be prepared to take advantage of the situation when and if it does come. That is where the study and preparation comes in. The people that made a fortune in the market during the huge bull run had no choice but to make money. You didn't have to study. That's not opportunity, that is pure luck.
  4. yes opportunity comes first and is the first prerequisite and sometimes if there's no competition then skills, knowledge, and discipline don't matter. but once everyone finds out about opportunity and everyone wants a piece of the action than it all comes down to skills, knowledge, discipline - but the opportunity still has to be there.
  5. One of my favorite quotes:

    "Ability is nothing without opportunity" - Napoleon
  6. mokwit


    Very good points. You can only do what the market will let you do. You can't make extraordinary profits in ordinary markets. I am thinking mainly of stocks here, but this also seems to apply as much to locals scalping the floor as it does to trend followers.

    Livermore, Baruch etc made their money in a few good years e.g 1907 1921-23 1925-29. Livermore ran up losses over 3 years trying to make money in bad markets ahving previously been successful.

    As to what really makes money in the stock market you have to ask yourself who consistently makes money from price changes rather than an institutionalised edge, fees etc as do brokers and fund managers. The answer is a tiny handful of hedge fund managers* and one other group, but they need good markets i.e public in the market to operate.

    *Soros's conviction in France and the allegation agains Cohen that SAC paid for negative research on a stock they were short suggests that thgey are employing methods other than drawing trendlines on charts or acting on analyst buy recs. Seems to me that pros trading their OWN mony have a strategy of creating and/or acting with size on small moves with a high probablity of certainty e.g stop running or Steinhardt, Cramer Berkowitz and Co working the 'phones to analysts. Taking huge LT positions in commodity futures is something you do with other people's money, not your own.
  7. I agree, but the opportunities are limitless. You just have to know how and where to find them.
  8. money makes money


    Although you made some good points the above I don't agree with. The people you cite who made a lot of $$$ up until 2000 were most likely lucky. Because just as there was "opportunity" in the runaway bull market of the late 90's there was equivalent "opportunity" right after we peaked in early 2000. Merely reversing ones trading (from long to short) could have made one as much money when the market tanked as when it ran up.

    The people who lost their money up to 2002 likely had few trading skills. For if they did they'd have seen the "new" opportunities that were right in front of them in the market.

    Conditions change and if you expect to succeed you need to adapt to the changing conditions. A trader certainly has to do so. No different than someone who owns a restaurant, maybe with little competition early on where they do quite well and make good money. Then a restaurant pops up across the street. Then another one down the street. More competition and perhaps his P&L suffers a bit. Either he adapts or he'll face a longer term uphill battle.

    There is "opportunity" every day in the markets and if one is truly willing to work and find those opportunities he/she can succeed. But it does require some skill which you seem to suggest isn't relevant. Very little in life is easy, especially entrepreneurial ventures, such as trading or other forms of self employment.

  10. My solution to your above problems: FIND NEW OPPORTUNITIES!

    These "opportunities" you find in the markets, aren't really opportunities per say.... 1:3 risk reward are not what I call an opportunity.

    Real opportunities are: 100% RISK FREE TRADING.

    Many people confuse whats a "real opportunity" with a JOB. You can shovel manure for horses and make $15, You can call that opportunity but its HARD WORK. JOB.

    Real opportunities require very little work to exploit. In fact, Not only do they require little work to do, they make you EXTREME amounts of cash in proportion to the work you did.


    I would rather be lucky then good.

    To be good is so hard, <b> To be good is to be almost perfect.</b>

    I have an extreme confidence in myself, but I do know one thing, Its extremely hard to be GOOD. I respect everybody who is GOOD,
    But I also realize I am just a mediocre person who isn't #1 at everything he does.

    If you are #1 in the world in what you are doing, mad respects to you, There can only be one.

    I'd rather be lucky in a great opportunity, then good in a hard opportunity.


    Life isn't really hard, you know whats hard?
    The search for new profitable opportunities. And I'm not talking about 1:3 r/r.
    #10     Jul 11, 2007