Bet Nightmare

[Iron]

Hi Zenyatta

The intelligence of traders generally (successful and non-successful) is way above average.

But I would say that what separates the successful from the unsuccessful trader is:

A. Technique (and you need a certain degree of intelligence to separate the wheat from the chaff in this regard) and

B. The the wisdom to apply proven techniques with discipline and focus

I bet that, if you were to teach a simple mechanical method to someone of fairly low intelligence, and they they were to adhere to this method with extreme discipline, then they would make a consistent profit. This was actually proven by the Turtles (http://www.investopedia.com/ask/answers/06/turtles.asp)

Mark Douglas summarises the deceptive simplicity of trading in his book Trading in the Zone:

'As long as you are susceptible to the lands of errors that are the result of rationalizing, justifying, hesitating, hoping, and jumping the gun, you will not be able to trust yourself. If you can't trust yourself to be objective and to always act in your own best interests, achieving consistent results will be next to impossible. Trying to do something that looks so simple may well be the most exasperating thing you will ever attempt to do. The irony is that, when you have the appropriate attitude, when you have acquired a "trader s mind-set" and can remain confident in the face of constant uncertainty, trading will be as easy and simple as you probably thought it was when you first started out.'

Jeff

Jeff, its common for people who are reasonably smart to completely fail to understand how hard something is for those who are less smart. I'd be willing to wager that the intelligence of the successful traders is far above average. here are some telling comments from people on the blog;

[harrysdog]

Its true...who can forget the Billy Ray Valentine experiment in the early eighties.

Me..im down 80%. Only myself to blame. Despite advise on here and an absolutely shocking record, I am still allowing bad trades to go in-play in. Been mullered nearly every time.

Often making in the £100 range for the day but then
something goes against me. End up fighting it and then the losses get so big try and get out inplay. Then Im blatted..+ lots more.

Off to Hamburg on Wednesday pending volcanic ash.. hopefully the delights of the Reeperbahn, beers and football will revitalize me.

Will then try again.. if I cannot get round this accepting losses malarky .. will call it a day.

[Iron]

I think the Antony Robbins, the self-help guru, says that, if you want to make a major change in your life, you need to get passionate about it and treat the change not as a luxury, but as a necessity. In other words, you need to make sloppy trading errors that endanger your wallet as unacceptable as sloppy driving errors that would endanger your life and that of other people.

Jeff

Its true...who can forget the Billy Ray Valentine experiment in the early eighties.

Me..im down 80%. Only myself to blame. Despite advise on here and an absolutely shocking record, I am still allowing bad trades to go in-play in. Been mullered nearly every time.

Often making in the £100 range for the day but then
something goes against me. End up fighting it and then the losses get so big try and get out inplay. Then Im blatted..+ lots more.

Off to Hamburg on Wednesday pending volcanic ash.. hopefully the delights of the Reeperbahn, beers and football will revitalize me.

Will then try again.. if I cannot get round this accepting losses malarky .. will call it a day.

[PeterLe]

Good luck Mike

I used to trade part-time, but only took the bold move to go professional when I was made redundant in June 2008

2 years later I'm still going strong

Hi LeTiss,
I actually make more now from trading than I do from my day job..but it's the potential redundancy money that keeps me there! (plus, because I work from home, I can do some trading in the afternoon if I feel like it..so it kind of suits me)..

I've been making money month in month out since last April, but I have to work TWICE as hard to make roughly the same as I was doing this time last year. I know you primarily trade football..have you found it the same in terms of profit? Is it getting harder or are you going onwards and upwards?

The other thing I would be worried about being full time is the boredom aspect. Can you fill a full day trading? I know Peter W probably trades 40+ Hours a week, but I just wondered what the average full time trader such as yourself /others average..

regards
Peter

[LeTiss]

Good luck Mike

I used to trade part-time, but only took the bold move to go professional when I was made redundant in June 2008

2 years later I'm still going strong

Hi LeTiss,
I actually make more now from trading than I do from my day job..but it's the potential redundancy money that keeps me there! (plus, because I work from home, I can do some trading in the afternoon if I feel like it..so it kind of suits me)..

I've been making money month in month out since last April, but I have to work TWICE as hard to make roughly the same as I was doing this time last year. I know you primarily trade football..have you found it the same in terms of profit? Is it getting harder or are you going onwards and upwards?

The other thing I would be worried about being full time is the boredom aspect. Can you fill a full day trading? I know Peter W probably trades 40+ Hours a week, but I just wondered what the average full time trader such as yourself /others average..

regards
Peter

Peter

I'm finding it easier to make money now than 2 years back. I think this is simply due to experience, but also because I'm constantly analysing my trades and performance, just to see if I can keep learning and finding new edges.

The difficulty is getting the right balance between work and leisure. I work longer hours than ever before - my average week is 60-70 hours!
I'm not in Peter Webb's league with regards to earnings, but I'm happy with what I achieve. I'm just finishing my 2nd full year & it looks like I will have earned about £27k after Betfair's deductions. It's not a fortune, but it's enough for me to enjoy my life and not having to work for anyone else.
You mention boredom - this is something some traders will struggle with, especially with sport trading. It doesn't move quite as fast as horses & you have to be patient. I agree, full-time trading isn't for everyone, we all have different personalities and goals, but that's what makes trading so fascinating

LeTiss

[Online Trader]

That is good going LeTiss 27K as a tax free income is more than cushty

If you are doing that without pre the off horse racing then you are doing very well

Do you mainly trade football?

If so then I am seriously impressed as making football pay is IMHO very tough

[hgodden]

I have to say I completely disagree with this idea that anyone can make it.

Traders might not have to be 'geniuses' but they certainly do have to be suited to the type of work, and be genuinley interested in the markets (not just about the money) which I guarantee the vast majority of people are not. Traders need to be born with many characteristics that no 'teacher' can give you.... intelligence, self reliance, composure, decisiveness, pattern recognition ability, the ability to make decisions quickly and under pressure, the ability to analyse several pieces of information at once and the judgement and confidence to immediately make use of that information etc etc. Not only that but the most difficult thing is working out the markets and how to actually make money from them in the first place. Even if someone came along and gave someone who wasn't born with those qualities a technique they use that works, there is no one size fits all technique anyway. The markets are always different and very complicated, anyone doing this needs a lot of good judgement as to how to adapt to the constantly changing circumstances. I've never spoken to any trader who uses only one or two techniques, everyone is constantly adapting to the ever changing and challenging conditions and if they analysed it would probably have 100s of little micro strategies.

People have this idea that they can definately do it with enough work and then when they fail they then blame themselves for a multitude of reasons.... 'I didnt try hard enough, I'm too greedy, I'm not intelligent enough, I'm not decisive enough, I just can't work it out' etc.... these are all things that are linked to characteristics that you are either lucky enough to be born with or not. As inspiring as Tony Robbins is, not everyone can take a beating day after day and still come back for more.

I also think that people who can do it have some responsibility and should be careful not to give the impression that it is easy and that anyone can do it. It's easy for people like myself to have a good day and then say that anyone should be able to scrape out a few quid, but other people are built differently from me but its only fair that I remember that when I communicate about trading.

Remember the Million Dollar Traders programme on BBC2? The idea was to see how many normal people could cut it. All but 3 walked out (many of them in tears) as it was just too much for them. The ex-soldier said it was as tough mentally being there as it was being on the battlefield. Of the 3 left at the end the soldier wasn't quite intelligent enough, the young lad was too indesisive, which left only the lady as a potential full timer. Most of them simply couldn't do it because they were not born with the inherent characterstics neccessary for success. There's no shame in that - some people are suited to some things and some are suited to others, there are many things I certainly couldn't master. I would never put anyone of off trying to learn to trade but I think that in general people are a) unrealistic about their chances and b) too hard on themselves when they don't make it.

[Iron]

Traders need to be born with many characteristics that no 'teacher' can give you.... intelligence, self reliance, composure, decisiveness, pattern recognition ability, the ability to make decisions quickly and under pressure, the ability to analyse several pieces of information at once and the judgement and confidence to immediately make use of that information etc etc.

I'm not sure you need that much intelligence to trade successfully. All you are doing, after all, is just spotting patterns and responding to them. And I would argue that intelligence (and curiousity, for that matter) can work against you, as they can cause you to over-complicate something that's very simple.

The patterns you need to find are fairly straightforward, especially once you've had a bit of practice at finding them.

As for making decisions under pressure, given that trading is inherently simple and that the market doesn't generally move at a break-neck speed, you don't need cat-like reflexes combined with the composure of a brain surgeon.

I think the most important thing you need is self-discipline. Some people find this easier than others, but if you want to succeed badly enough, you'll force yourself to be disciplined until it becomes second nature.

Not only that but the most difficult thing is working out the markets and how to actually make money from them in the first place.

I agree. And I think many people - even very intelligent people - lose money because they are using duff methodologies. It ain't what you know that's the problem. As a trading book I read puts it: 'It's what you think you know that ain't so!'

Even if someone came along and gave someone who wasn't born with those qualities a technique they use that works, there is no one size fits all technique anyway.

That's debatable. I bet that, if you were to analyse your trading, you would find that 99% of your trading could be described in terms of a simple algorithm.

Remember the Million Dollar Traders programme on BBC2?

Yes, and whilst it possibly depicted things as they are in many hedge funds, they don't represent trading as it should be (and as it is for many traders).

For a start, these traders were expected to trade all the time, regardless of whether there were any decent trading opportunities.

Also, they were given a minimal amount of training, and basically left to fend for themselves in some of the most turbulent markets since the late 1920s!

By contrast, I know a spread betting trader who uses more or less mechanical methods. He typically makes at least 25 pips in the morning and 20 pips in the evening. At about 30 pounds a pip, this gives him a very nice living. I once asked him why he didn't increase his pip size, and he said he didn't see the point. He knows people who trade at 200 pounds a pip, but they are no happier than him!

Jeff

[PeterLe]

Good luck Mike

I used to trade part-time, but only took the bold move to go professional when I was made redundant in June 2008

2 years later I'm still going strong

Hi LeTiss,
I actually make more now from trading than I do from my day job..but it's the potential redundancy money that keeps me there! (plus, because I work from home, I can do some trading in the afternoon if I feel like it..so it kind of suits me)..

I've been making money month in month out since last April, but I have to work TWICE as hard to make roughly the same as I was doing this time last year. I know you primarily trade football..have you found it the same in terms of profit? Is it getting harder or are you going onwards and upwards?

The other thing I would be worried about being full time is the boredom aspect. Can you fill a full day trading? I know Peter W probably trades 40+ Hours a week, but I just wondered what the average full time trader such as yourself /others average..

regards
Peter

Peter

I'm finding it easier to make money now than 2 years back. I think this is simply due to experience, but also because I'm constantly analysing my trades and performance, just to see if I can keep learning and finding new edges.

The difficulty is getting the right balance between work and leisure. I work longer hours than ever before - my average week is 60-70 hours!
I'm not in Peter Webb's league with regards to earnings, but I'm happy with what I achieve. I'm just finishing my 2nd full year & it looks like I will have earned about £27k after Betfair's deductions. It's not a fortune, but it's enough for me to enjoy my life and not having to work for anyone else.
You mention boredom - this is something some traders will struggle with, especially with sport trading. It doesn't move quite as fast as horses & you have to be patient. I agree, full-time trading isn't for everyone, we all have different personalities and goals, but that's what makes trading so fascinating

LeTiss

Thanks for that Le Tiss,
It's a funny old game this...people tend not to talk about their earnings; which I can understand to a certain point as to people who aren't doing so well, it can be seen as showing off I suppose. When I was initially setting off I was intrigued as to what people were earning as an incentive really and something to aim for. I made a similar amount to yourself last year (99% on the horses) and expect to do more this year. Not in Adams/Peter's league but I know I could double this if I went pro.
If and when I can get to the point where I can do this full time and focus on it during the day, it might be a good idea to set up some (small) user groups, each person(s) focussing on a particular sport..and then leveraging that info across the group for the benefit of all.
Anyway good luck!
regards
Peter

[harrysdog]

I was born with pattern recognition abilities...as a baby I recognised that formation of a double top meant milk time.

maybe betangel should do a psychometric test before taking folks money.. just kidding

I just tried this one... http://psychometric.mastersoequity.com/

Result
"You are disciplined in your stop loss policy and takes profits when the strategy demands
so that the balance built so carefully into the trading system or strategy gets it full play.
YOU ARE THE ULTIMATE SHORT TERM AGGRESSIVE TRADER."


ha ha...brilliant.. right.. im gonna try with stop losses later

[Mug]

Hmm, I just got the same result.

[PeterLe]

By contrast, I know a spread betting trader who uses more or less mechanical methods. He typically makes at least 25 pips in the morning and 20 pips in the evening. At about 30 pounds a pip, this gives him a very nice living. I once asked him why he didn't increase his pip size, and he said he didn't see the point. He knows people who trade at 200 pounds a pip, but they are no happier than him!

Jeff

[/quote]

Jeff,
Do you trade the FX as well?
Why would you not replicate what the spread betting trader is doing?
The FX is so large, there is room for many people doing the same? Would he share his strategy with you??
Regards
Peter

[Iron]

Hi Peter

I have dabbled in Forex, and it's something I intend to pursue to a much greater degree. I'm currently just fine tuning my approach.

I will be using this guy's techniques (along with other techniques too).

Regards

Jeff

Jeff,
Do you trade the FX as well?
Why would you not replicate what the spread betting trader is doing?
The FX is so large, there is room for many people doing the same? Would he share his strategy with you??
Regards
Peter

[Zenyatta]

I bet that, if you were to teach a simple mechanical method to someone of fairly low intelligence, and they they were to adhere to this method with extreme discipline, then they would make a consistent profit. This was actually proven by the Turtles (http://www.investopedia.com/ask/answers/06/turtles.asp)

I bet they could only do this for a limited time in a very restricted context. Markets are constantly changing and not everything is well defined. The low IQers might make money for a short time in a narrow context with a taught mechanical method, but soon the market would change and they would be unable to adopt

Tony Robbins ... 10% per day for the next month.. you can do it.. you can do it, you can do... nah, dreaming man.

[Iron]

Hi Zenyetta

I recently bought a book called How to Make Money In Stocks by William J O'Neill (which, incidentally, is recommended by this trader who turned $10,000 into millions in a few short years: http://www.investopedia.com/articles/tr ... 082504.asp). It uses charts going back as far as the 19th century to show that certain patterns are universal, as they are a reflection of human nature, which doesn't change.

I think you misunderstand Tony Robbins. I don't think he would presume to say what you could or couldn't achieve in trading. But if you have psychological blocks which get in the way of successful trading, I'm sure he could help with that. And how do you know what is and isn't possible? Are you sure your negative self-talk isn't convincing you that certain things are pure fantasy?

Jeff

Markets are constantly changing and not everything is well defined. The low IQers might make money for a short time in a narrow context with a taught mechanical method, but soon the market would change and they would be unable to adopt

Tony Robbins ... 10% per day for the next month.. you can do it.. you can do it, you can do... nah, dreaming man.