Just read a fun piece by Alan Farley about 'predatory trading'. As he says: "I earn a living when other people put on their dumb hats, and buy too high or sell too low." It got me to wondering where all the amateurs are these days (ie, exploiting amateurs = $$ !) If ET is any indication, many trading pros have moved from stocks to other instruments -- futures, currency, etc. Can anybody confirm that this has occurred, especially since the 90s bubble burst? If that's so, is the amateur crowd still playing with individual NASDAQ tech stocks? Are there particular sectors they favor (IT, pharma, Chinese stocks, etc)? What time scale do most prefer now? (I assume amateur day trading is mostly dead these days.) Farley thinks that after-hours and premarket trading especially is now "amateur hour" -- do you all agree? Any data and/or observations would be most welcome. Thanks! --TD
Among others, Newsweek just came out with an article indicating traders are not happy with equity markets, and are moving to currency trading by the groves. Some fx brokerages claim to be picking up 1000 people a week! I used to trade equities, now I trade fx and would never trade anything else. We should see this trend continue due to the many advantages fx has over equities. Regards, TO
So far, it doesn't look like any pocket change from "thousands of little amateurs" is making any difference in any other market, except the e-mini where things are even more competitive. If your thing is to follow the fools after their money, go ahead. That job is usually taken up by the brokers. As for Farley, if he were that good, he'd be trading instead of writing.
gerry875 posted this the other day: http://www.ruthroosevelt.com/article_metaphor.html It's worth reading as an antidote to those who believe that trading is some sort of testosterone challenge.
You should discount everything that appears on realmoney.com. basically it is a marketing vehicle for these traders. Look at the mathematics 99.95 dollars per month per subscriber at 1000 subscriber it is 100000 per month, out of which say 50% goes to the site. So these authors make 50000 per month low risk money from non trading activity. They have also a compulsion to write on regular basis, so basically they find things to write about all the time. Most of the writing is written with an aim of making you feel inadequate in your trading. So that you will use their service.
If you're indicating that trading forex is for fools then how does it apply to someone like Paul Lynch who claims he made 50% on his money since December trading currencies? Is he a fool? I do very well trading forex. That makes me a fool too? Then only the guys who trade futures, bonds, and equities are the non-fools? *rolling eyes* TO
Oh !&#@! Just because some kid says he made 50% on who knows what amount of capital (I did not read the entire bs story which almost sounds like another sales pitch) is now supposed to make others give currency trading and try and succeed? What a joke! Go back to school. This kind of story reminds me of some of the fools during the dotcom mania. Only now, this kind of "story" is pushed by the #$*&! crooked brokers and other scam artists trying to lure fools like yourself (if you're not one of them) into the racket. If I go to Vegas with $5000 in my pocket, somehow win $2500 on some gambling and come home with $7500 (fat chance). Does this make me a trader or "investor" who has earned 50%??? What a bunch of morons. Currency trading as part of a portfolio, or hedge or some structured investment is fine. Normally it would encompass a small portion of the overall progam. To expect the average trader to make money from trading currencies on a regular basis is the same as expecting to walk out of a casino with more than you had going in. Good Luck because you'll need it.
anyone who thinks the ES market is too big and packed with too much money chasing money should stay far far away from forex, lol.
IndexTrader, what statistic is your opinion based on? and are you implying index traders are expected to be more successful?