I don't know what the technical term is (if there is one), but if you own a future or option, there is a counterparty or somebody on the other side of the trade. If you buy a stock, you own the stock, there is nobody on the other side.
In theory, I believe the idea is that with owning a stock, you're actually a fractional owner of the company and thus your shares represent a claim on assets and future earnings. Obviously, not the same as options or futures (zero sum) where every dollar lost on a contract derived from an underlying must be offset with a gain.
I understand your point. Every share that's shorted creates the same two sided deal. Just because a market is "two sided" doesn't mean there isn't alpha to be had. There isn't the wealth creation that exists in long stock, but in these zero sum games there are individuals who treads without profit motive in that game. They are often hedging a stock holding. That creates alpha opportunities.
in my dictionary, a bad trader is a trader who quits taking risk. before uncertainty, he freezes, he runs away. a bad trader is a trader he refuses to take overnight risk, end a trade as a day trade a bad trader is a trader he refuses to take the pressure to hold on to realize his ideas and end his trade to realse his pressure. a bad trader is a trader he just like a solider, he gets to the war field, sees the enemy, he drops his weapons, and he gives up, and become a traitor, hope the enemy gives him new life, wonder they will give hime mercy. will they? a plan? the enemy will follow it? I doubt it. be flexible with that! do not lift a stone and hurt your own feet. the most important in trading is: what market conditions are now, based on that to trade! not your own plan. if you ride mayflower in midway sea, and the ship starts to sink, what will you do? sink to theseabottom and eaten by shark, or you agressively seek survival ways? sink to the seabottom is your orginal plan (you want to ride to your target, but oops, there is no ideal trip). be prepared to become survival fighter, not a trip rider.
a bad trader is a trader he does not know how to handle new situations, he did not prepare beforehand. he just sticks with the market situation he wants or wishes. he has a plan he designed from his inner thinking/wish/hope, but not based on the market reality. no traders comes to the market and says to himself, I want to lose! their plan is make money. from this view, I would say bad traders have plans! but oops "make money" is a trading idea? exame it carefully, "make money" is not a trading idea!!!!!!!!!!!! with a wrong plan, you end up in a wrong place, it is not a surprise. you can not call yourself a bad trader becuase you designed a wrong plan.
I don't want to hijack this thread, so I'll just make one reply. Alpha is always in comparison with some benchmark, so to the extent that the return is positive (and adjusted for risk), it would show alpha. I don't see that the existence of hedgers provides any opportunity - the price is set by the market. Hedgers can be both long and short futures and hence be net flat.
A bad trader is a trader who's trying to mess with a random environment with a $5K account out of his rats whole.Domething like that...did I miss anything ?
Trader Vic, aka Victor Sperandeo has never "blown up". I think you are referring to Victor Niederhoffer.
I haven't read all this thread yet, but it seems to me, rather than denigrating Al Brooks's methods, you may be better off testing them out and see if they work or not. No doubt, there will be a post on the lines of "i don't have a clue what he is talking about, so how can i test it out", but that is more of a demonstration of your lack of intellect since I read that futuresmag article and figured out what he was saying. Granted it took well over an hour, but nevertheless, i did persevere.
I think the fact that Al has become a frequent target of denigration is a testament to his status as most popular retail trading vendor of the current era... he is the most obvious target I do remember Al admitted once that he traded "dont care" size, meaning small enough that he didnt care about the result so if he trades at all anymore, its probably 1 lot, and no one knows if he is profitable the guy often held out as his #1 student is stuck at 1 lot and making approx 20k a year just goes to show that talking about ideas that may be profitable, and actually trading those ideas profitably, are two very different things. that's where fantasy meets reality... people tend to mistake the hindsight analysis or theoretical results as actual real time trading results, which they are not. everyone is passionate about trading until they actually have to start doing it day-in day-out with real money on the line, or with anything more than the minimum size then they get a hard dose of reality........ and start thinking maybe they should write a book instead, or start a chatroom