Why are you proud to be a trader?

I traded for a couple big evil banks before and now am running a portfolio for a largish hedge fund, so my view on this might differ from a retail trader.

Personally, I think that trading is a shitty job that, unfortunately, pays very well. I like the intellectual aspect of being a book runner, but I certainly hate everything else about it. As for my impact on society - l am not deluding myself by thinking that society actually benefits from my existence. Well, maybe except for taxes and 15% of my pre-tax income that I give to charity.

Ps. No I don't think I sold my soul - I am just leasing it out

 

I was thinking the same thing.

I apply for a teaching job and I get the job because I have more years of experience. The other applicants lose, among them several who are far more gifted and effective teachers than me. Am I a benefit to society?

I work for Raytheon developing weapons used in war. One of the weapons I help develop kills the leader of a terrorist cell and his closest associates in a precision attack based on excellent intelligence-gathering. Another of the weapons I develop kills 14 of our own troops in a friendly fire mishap. And yet another of them kills 2000 innocent civilians when a target is wrongly calculated. Am I a detriment to society because some have misused the products of my labor?

I'm an effective day trader as a result of years of study and practice. Based on price action during a downtrend in my preferred time frame, I sell 5 crude oil futures contracts to someone who wants to hedge against anticipated price fluctuations over a longer time frame, and I sell 5 contracts to a day trader with a $20K trading account who believes price has fallen too far that day and happens to use mental stops instead of hard stops because hard stops are for amateurs. News hits the wire and the price of the contract drops 2.00 in less than a minute. Does the fact that an irresponsible speculator took the other side of part of my trade mean what I do is of no use to society?

 

Really....... maybe you're not as clever as you think you are.

 

All of this has changed through the years, each ten years I could answer all with different reasons. At first was the money, then it became a bit of ego being able to do what most only dream about, and now it is just boredom of basically same patterns and a game of waiting. Can't say I am proud of doing what I do, I don't strut around the neighborhood yelling out I am a trader, I prefer a much quieter existence.

I think it has become more of me competing against myself than anything else, how low can I get my losing percentages. I lost concept of money long ago, it is just a way of keeping score, I just concentrate on percentages and profit per trade. Anyone who has been doing the same job for over three decades will be able to understand better.

I don't view it as risk taking any more either, but I do believe if you are uneducated, it has incredible risk. It has just become I guess like a plumber putting in his time, goes home and can't remember what he did during the day, it just a job now.

But in my youth, it was most exciting, almost better than sex. LOL

 

Lol......yeah , i was thinking about the speculative position that i took on Brent crude , something which i have absolutely no use for.

 

Does anyone understand what it means for prices to be informative?

And why they're necessary for the marketplace to allocate scarce resources efficiently?

Does it make sense to price oil at 500 dollars a barrel when it's true value is 50 dollars?

Wouldn't that encourage the over-investment of capital into energy while forgoing the creation of more valuable business pursuits?

Wouldn't that also signal consumers to invest in expensive energy-saving devices, perhaps such as green energy, even though in reality, no such investment was needed?

The net result is a wasting of scarce capital on activities that produce no benefit = wealth destruction.

The stock market is no exception. Companies that create a great product or service should be rewarded. Speculators reward such companies through buying their stock. Improved share prices empower such companies to produce more of that great product or service, enhancing the quality of life for all. A speculators job is to identify these undervalued gems and furnish them with the necessary capital to expand their operations. For this critical role as financier, a speculator makes a handsome profit.

The opposite is also true. Companies that market inferior products or services, or mismanage funds, should be punished. Speculators punish such companies through shorting their stock. Low share prices make expansion nearly impossible, and may also force liquidation of plant and equipment if the company is overleveraged. In this way, speculators preempt the destruction of future market wealth through weakening the balance sheet of a derelict company. For this critical role as financial policeman and guardian of market wealth, a speculator makes a handsome profit. Ironically, speculators reward great companies with the capital arrested from derelict companies. In fact, this is the primary role of the stock market = risk transference *and* capital mobility. Speculators take capital from the weak and give it the strong.

There's a lot to it. The notion that speculators are parasites is bullshit. We make prices informative, reward great producers with the meaty carcasses of wealth destroyers, accelerate the death of mismanaged companies, accelerate the growth of value creators, bear risk, smooth out the price cycle, and provide liquidity which prevents manipulation and keeps transactional costs low. We are truly doing God's work

 

And yes, I am damn proud to be a trader.

I consider myself and my fellow speculators to be the last line of defense against intractable Governments and Corporations hellbent on destroying their shareholders.

 

I'm proud I take others people money and put it in my pocket. I'm a futures trader.

 

Yes, but you keep prices around true value.

Because of that, distorted prices aren't sent to the marketplace. Which, if acted upon, would result in global mal-investment into unnecessary capacity, or expensive substitutes. So, in reality, you're ensuring the world saves a shit load of money. Which is one reason why it pays well...

 

It is different for 2 reasons:
1) You didn't take their money. Applying for a job is not equal to playing the trading game. A more accurate analogy would be be that you all got the job but only you made money while the others actually had to pay.

2) when you get the job you might have a shot at making something of value to someone else