You caught me red-handed It's a way too old, want some fresh opinions Sure, should have attached the link
You don't "buy into the zero-sum argument"? - Do you? Colbert would have a field day with this "truthiness".
Why do you think you can make money trading? Because you can -- if you know what you're doing. and... The Thrill is the Kill
It is indeed a game with a lot of zero's. Just take care that the first figure is not a zero. That's all you need.
Its human nature to measure yourself against the other person(s). If you believe you can do better than the other person(s)...you're also believing your performance will be better. Simply, as a trader and knowing most traders will fail at trading...if you think you can do better than other traders...you're also believing you'll be a profitable trader. Furthering my opinion, I think the market is arguably setup so that only a small percentage will be profitable. Therefore, most market participants just lose money. Yet, just because only a small percentage are profitable doesn't imply the markets do not work. In contrast, it means that the markets do work and that only a small percentage were able to figure out how to make it work. Too many people got the philosophy of the trading mixed up. They believe to prove that something works is to prove that most are profitable. I learned the above statement in italics is false when I played sports. On the amateur level...most can do it. Yet, as you progress to the higher level of competition from high school to college and then to professional or international competition... Most will not make it but only a few will make it. I can live with that because I think that's the way its suppose to be. With that said, there's obviously other ways to make money in the markets. For example, a close friend of mine so far this year is having a negative performance (first in about 10 years) at his institutional firm. Yet, his salary is 230k per year with full health/medical benefits and other perks. He earned that job. Graduated in the top of his class at graduate school, did the internships, made close friendships with the right people and many other things involving many years of education and networking. Simply, he figure out a way to make money in the markets but not via the perspective of a retail trader.
Exactly! This is the point were most people make a mistake in reasoning. The result is that they don't try because of that, and their thoughts become self-fulfilling prophecies. I call it rather self destructive behavior. I did in past already a few things of which most people said: it will not work, because if it would, someone else would already have done it before you. When it later appeared to be a success, they told me is was lucky......
Yes the market is a zero sum game, but I still think I can make money. Because the price people attach to things is different depending on their risk appetite. For example insurance companies are profitable, although buying and selling insurance is a zero sum game people are perfectly willing to buy insurance. Similarly you will earn a premium from providing liquidity to the market, or from taking on risks other people are uncomfortable with. GAT
When I started there was curiosity if I could do it, and I thought that if I lost money it would at least be interesting along the way – and I’d be in good company as most fail so it’s not that big a deal. Over time I came to the position perhaps 10 – 20% actually couldn’t do it… and that the 90% didn’t actually fail, they just quit before they succeeded. Where I’m at now… Mark Douglas talks about an essential to trade successfully to have “absolute confidence of being profitable in an uncertain environment.” At one time that seemed like a chicken and the egg thing to me. I’d have to trade profitably to have the confidence, yet I needed the confidence to be profitable. And in an uncertain environment, how could that be? So I would try to psych myself and force my emotions into confidence. You can guess how well that worked. BUT I finally came up with a back tested real plan. Instead of me tweaking it, it started tweaking me (that is, changed my behavior). There is no forcing my emotions. I just sit there and watch it work. It is just obvious that if I follow the protocols, it will be profitable. I don’t think about the zero sum part. If anything, I think about it as having to do with insurance for farmers, etc., which is cool and somewhat important.