Carnage From WallStreet Giants

[supracharger]

Carnage From WallStreet Giants

In the past people could just quit their job and switch to trading and make a decent income with knowing very little about trading.
Why is it so hard now?

Is it the big institutional algorithms, trading a thousand times a second, or the fact that they sometimes strategize to add market noise into a security so it confuses other algorithms? Or is it that institutions design algorithms to not predict a price of a security, but to sabotage or take profits from the other trading institution? How about market manipulation, “Front Running,” and how some people think scams are the only way to make money in WallStreet? Is it the fact that the SEC who is not prosecuting WallStreet offenders? Is it the veil that covers 99% of the world, only for the 1% that continually profit? Is it having the ability to Code? Or is it only specialized to the super genius from Harvard, MIT and so on? Can it be so simple, that having any trading system with complexity decapitates smart individuals?

With all of this carnage, whether one believes it was easy in the past to make an income in trading or not:
One has to ask the biggest question of all, did all of this happen from our initial “Rooted” belief in Fear and our unquenchable selfish lusts?
One has to “Root” their belief in an un-manifested brighter future… as a viable answer to a solution.

- Andrew Q.

[Baha]

Day trading may have gotten harder due to computers being more efficient than people but If you look at the chart of emini for the last 5 years. All you needed to do is buy pull backs and double bottoms. pretty straight forward..

[earik]

In the past people could just quit their job and switch to trading and make a decent income with knowing very little about trading.
Why is it so hard now?

Keep in mind that this is a zero-sum game and that any profits earned by one trader are lost by another. So if it were easy, meaning someone could just quit their job and make a living without really knowing what they were doing, then who specifically is going to be taking losses to support that person? In the scenario you mention, billionaires would have to show up and lose their entire fortunes making bad trading decisions in order to support all the mom and pop traders that decided to try their luck day trading, and that's not realistic. I don't think trading was ever easy. People did jump out of buildings in 1929.

Regards,

Earik

[supracharger]

Thank you for your posts guys. I guess part of what I was trying to say is there has to be a better way to do things, I just see so much energy lost with all of the carnage, deceit and so on that I mentioned above. What if 30% of traders could be profitable, and not the 2% now a days.

When I watch people talk, what they say is almost exactly where they are headed. If you ever get a chance to step back and listen to people talk, you’ll find that they say the phase with a negative connotation rather than a positive one. It's amazing why wouldn't one just say a positive phase instead? Additionally, when people say a negative connotation, they start to have negative thinking, and by that time they think the only solution is to take the Carnage path or the tough one, when there are other paths available. Also, with the added pressure of stress, heavy workloads, having to stay up-to-date etc. causes the light in the tunnel to glow dim. One just has to have patience and unseen Faith to find the better paths available.

I was trying to Brain Storm to find a simple and effective solution to all of the madness. Which I feel could be a Macro and Micro (private trader) solution. I know that the solution I purposed can seem to be detached from reality, but it's quite interesting. Also, I wish people wouldn't continue to believe that there is no hope, stop thinking, and continue to get caught up in the drive of all the craziness. Why can’t all of that energy be brought into positive solutions, and be channeled by patients. If people want a better solution to WallStreet, or for our Country, etc. that idea has to start somewhere because it's not going to be pulled out of a hat, like most people think.

-Andrew

Baha: Nice System!!! It amazes me how people can find things, when it’s right in front of you the whole time or one just needs to step back and look at the big picture.

Earik: Could it be other things that stopped people in the old days from being profitable trading. Like the high costs of trading, the bad outlook of WallStreet snobs, slow communication of quotes, the alien like environment etc. that all depressed people from having a job with WallStreet. I don’t think trading was as easy back then, but relatively from know there is quite a difference. The advancements in “Data Processing” and prediction in WallStreet is nothing short of amazing! Wouldn’t you agree? ... People jumping out of buildings, makes your heart drop .

[Simon.B]

Hey supercharger,

Of course trading was never easy. I bet failure ratio for novice traders was the same 20 years ago and now. With that said, one major difference that stands out, and this only has to do with very short term day trading - technology allows large short term players to trade traders....not Market. But the only way Markets can exist in their pure form is if most folks lose. Think of it in terms of any professional sport, would anyone watch a quarterback like Brady play, and pay him huge salary, if most guys could do what he does ? Would anyone watch the games ? Of course not. And same thing applies to any business or profession out there - to be rewarded handsomely - one has to be able to do what very few can. Same thing in trading, retail traders have access to good trading tools like they never did before, but the gap between large professional traders and small one has widen over the years, big money allows those firms to build monster computer systems and algos, have many great mathematicians and best computer geeks on their payroll, not to even mention co-locating their servers right next to Exchange ones.

Yet everything above has to do with very short term trading. The more we increase time frame which we trade - the less at disadvantage we find ourselves. Eventually Markets still need and will get from point "A" to point "B", and not paying attention to tick by tick changes is the biggest favor retail trader can do for himself. The ones who stay in the game long enough eventually "graduate" to swing trading, and as they become larger yet - they try to capture larger trends, from a few months to a year or longer. The biggest reason day trading is so popular is because it allows traders with small amount of capital to participate in Markets, but then they find themselves trying to accomplish impossible fits, and we know how that ends most of the time.

So the game may look like it changed a lot over the years but that's mostly on the exterior, in it's basic and pure form.....not much really changed, how can it ? We as species have not changed in thousands of years, so in trading as in every difficult high paying position - majority will always fail.

Good trading,
Simon.

[earik]

Hi Supracharger,

Could it be other things that stopped people in the old days from being profitable trading. Like the high costs of trading, the bad outlook of WallStreet snobs, slow communication of quotes, the alien like environment etc. that all depressed people from having a job with WallStreet. I don’t think trading was as easy back then, but relatively from know there is quite a difference. The advancements in “Data Processing” and prediction in WallStreet is nothing short of amazing! Wouldn’t you agree? ..

I remember going over some early 1900's charts, and back then the trends were really big and really smooth. I think you could take the simplest trend following tools, like moving averages, or breakouts, etc, and probably do very well. So when we look at those charts we have this idea that it was an easier market environment to trade in. But you have to realize that the tools available were completely different. Edwards and Magee wrote the big book of technical analysis back in 1950 or so, and at the time it was a big deal because technical analysis wasn't really very well known at that time. So if you were back in the early 1900's, you really wouldn't have been using charts, or had computers to calculate indicators, or data feeds, or basically anything that you would take for granted today. You'd have prices in newspapers, and that's it.

Nowadays, anyone can get a live feed to the exchange, real time charts, have access to a gazillion indicators. Your average desktop PC has more processing power than old time supercomputers, and you can do all sorts of crazy data-mining and machine learning on markets if you want. Because of that, markets don't move like how they used to. So when we look at those old charts now, with the benefit of hindsight and the technology available to us in 2015, it looks like a piece of cake to trade back then. But the same thing will likely be the case in 2150, when those traders look back at our antiquated markets and wish for the good old days of the early 2000's, when things were easy. But sure, any idiot could make a fortune in today's markets if they had the technology and power of traders in 2150 - just push a button on your quantum computer, open a wormhole into tomorrow, and look at the closing price of the Dow in the newspaper. Then just trade! So easy!

If you consider the charts themselves, and how they look, basically they will be as difficult as necessary for the 98% to fail. So if they seem difficult today, that's because the 98% are better equipped than they were 100 years ago. If you consider the best traders of those times, and learn about them, you'll realize that none of them were slackers. They all lived and breathed markets, and spent decades studying and refining their techniques and styles. Pretty much all of them blew out at one point or another during their careers are well. If markets were really easy back in those days, then those guys (who represented the smartest, most dedicated, and most skilled 1-2% of the traders in the world) would never have had to struggle and sacrifice as much as they did in order to attain the levels that they finally achieved.

Regards,

Earik