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In a zero sum
game the amount of money put in equals the money going out. In the stock
market, the money put in is more than the money coming
out. Whether you consider the costs as trivial does not mean that
they don't exist. These costs mean that the game in negative
sum. There are commissions on each trade, and there are other costs,
like software, computers, interest charges, subscriptions for
data that must be paid. Too frequent trading can eat up all the profits
too.
<FONT face=Arial
size=2>
While I agree with
your second paragraph, it is changing the subject.
<FONT face=Arial
size=2>
<FONT face=Arial
size=2>Lionel
<FONT face=Tahoma
size=2>-----Original Message-----From: Jayson
[mailto:jcasavant@xxxxxxxxxxxx] Sent: Thursday, January 16, 2003
11:25 AMTo: Metastockusers@xxxxxxxxxxxxxxxSubject: RE:
[Metastockusers] Full time private trading... ... an unattainable
dream?
<SPAN
class=450521617-16012003>Lionel,
<SPAN
class=450521617-16012003>
Only
in the sense that you must pay commission on your trades. The market is in fact
zero sum in that there must be a buyer for every seller. That is not to say that
an individual can not make money, only that for every $ he makes there is a
corresponding loser somewhere else.
<SPAN
class=450521617-16012003>
An
individual has many advantages over the large institutions and hedge fund
managers. He/she can turn on a dime. Selling 1000 shares of CSCO will not drive
the market the way an institutional sell of 1 million or 10 million shares
can. This is exactly where the individual can make money. By learning to spot
the signals that the big guys are trying to load or unload large volumes of
shares in a systematic way the small guy can take his piece out of the middle of
the move. If the small guy is trying to make money picking the big turns he will
likely come out short in the end but by taking advantage of the overall
direction the big money is currently steering the price he can very successfully
come out on top.....
Jayson
<FONT face=Tahoma
size=2>-----Original Message-----From: Lionel Issen
[mailto:lissen@xxxxxxxxxxxxxx]Sent: Thursday, January 16, 2003 11:35
AMTo: Metastockusers@xxxxxxxxxxxxxxxSubject: RE:
[Metastockusers] Full time private trading... ... an unattainable
dream?
The stock market is
not a zero-sum game, it is a negative sum game just like the pari-mutuel race
track. <FONT face=Arial
size=2>The money taken out is less than the money put in. This doesn't
mean that everyone must lose, but it does mean that to win you must be
alert.
<FONT face=Arial
size=2>
<FONT face=Arial
size=2>Lionel
<FONT face=Tahoma
size=2>-----Original Message-----From: Dan [mailto:amarones@xxxxxxx]
Sent: Thursday, January 16, 2003 9:35 AMTo:
Metastockusers@xxxxxxxxxxxxxxxSubject: Re: [Metastockusers] Full time
private trading... ... an unattainable dream?
Nick-
I have been trading off and on for about 10 years,
both privately and as a CTA for a time. I am definatley on the short end of the
net zero game as a whole, but my dream of being a full time trader has been
revitalized and is on the way to being realized in the last year.
Who knows, I may blow up the account and have to
start over again at some point, but my experience in trading tells me I've
finally found what works for me. I think that is the key - what works for
each trader. I spent what feels like a lifetime with everything in the trading
world that didn't work for me.
I disagree that one must switch markets to be
consistently successful. If any market has the characteristics of orderly
accumulation and distribution and sufficient liquidity, then it can
be consistently traded.The markets on the U.S. futures and equity exchanges
offer too many issues and markets that exhibit these characteristics for me to
consider trading more than just the cream of the crop. I don't think it is
necessary to switch from domestic to foreign markets and from equities to
futures to be successful - there are so many market personalities within each of
those sectors, that the opportunities are far more than I have the capacity to
consider.
For me it would be ludicrous to ignore either the
long or short side of the market because it would mean giving up half the
potential profits. I use a 100% mechanical system developed with Metastock that
averages 76% winners. It's not perfect, but it backtested an average
gain of 240% annually over the last 2 years and is perfoming as advertised
in real trading.
For me the clouds have lifted and I can finally see
the dream of being a full time successful trader on the way to being
realized.
Dan Edens
From: Nick
Leong
<BLOCKQUOTE
>
To: <A
title=Metastockusers@xxxxxxxxxxxxxxx
href="">Metastockusers@xxxxxxxxxxxxxxx
Sent: Wednesday, January 15, 2003 4:29
PM
Subject: [Metastockusers] Full time
private trading... ... an unattainable dream?
Hi group,
I’ve been reading some articles
about the hedge fund management industry and how most funds sustained losses
over the past 2 years especially since Sept 11 and the US corporate scandal.
This is coupled with a statistic I read that most novice traders leave the
trading arena after about 3 months. These events really got me thinking… … is
it really possible for one to be a full time private trader?
I’ve been trading privately for
about 4 years not and like most of you I’ve had my ups and downs. I am a firm
believer that trading the market is a zero sum game. Someone MUST lose in
order for me to make a gain. However, the law of averages dictates that it is
just not possible for anyone to be winning all the time. That being the case,
is it actually possible for anyone to be a full time private trader (i.e.
trade using only his own money and make a living out of it)?
The only possible way for one to
make money is possibly to be engaged in the right market at the right time,
e.g. to switch between the equities/futures/derivatives markets or switch
between the US/Europe/Asian markets. But we must also remember that a private
trader does not have the resources or the mental capacity to handle so much
information or research at a single time. What option would be left then? To
specialise and trade only in specific markets and sit things out when
everything is not going well? Do not forget that a downturn in the market can
last for years.
We can go into the nitty gritty
and say that we must set up stops to prevent losses, but I’m sure most of you
have been in the situation where you were stopped out too early or you had
given so much room before being stopped out that you suffered a painful loss.
Don’t get me wrong, I believe that trading and investing is an art and there
is no one mechanical way of getting the right results. Ultimately, we are all
looking for one thing… …PROFITS. However, I have come under the increasing
impression that the odds are severely stacked against the private
trader.
I look forward to hearing from you
guys on this matter.
Thanks.
<SPAN lang=EN-GB
>Nick
Leong
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