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Andy,
Some points worth keeping in mind.
First, the success/failure rate for even professional traders that
I've seen quoted are based on studies of longevity in the business. As
Nassim Taleb suggests a professional trader generally speaking has a
shorter life span than a cancer patient, 5-7 years. [for the curious,
http://www.fooledbyrandomness.com ].
That does not mean that it impossible to rack up a lot of gains. But
it does mean there are few people around with long lifespans in the
game. Eventually traders tend to make one big mistake, maybe a long
string of small ones, and blow-up.
I'd also suggest that risk is something that really cannot be
controlled. It can be modeled, it can be hedged, but in reality the
unexpected does happen far more often than one would think possible.
There are and have been market situations [2002 volatility of
volatility being one example] that can create conditions in which even
the best hedges simply go to all heck.
I'd agree psychology and preparedness are key to success in anything.
However I think it would be a huge mistake to think the odds are as
favorable in trading as other businesses. They are not. What tends to
be attractive in trading is the theoretically unlimited upside. Rarely
do people discuss the very real prospect of a wipe out or 'flat to
down' being far more likely than unlimited gains. That is not to say
an exceptional candidate cannot make it work. It does suggest the
chances are smaller than most people entering the profession would
like to believe.
As for statistics and probability, these are just tools like anything
else. However I think it is dangerous and wrong-headed to dismiss them
out of hand. Especially so given many of the underpinnings of
technical analysis are essentially derived from statistics.
For example one should take note that in theory technical analysis can
and has been shown [in limited cases, not everything works] to be
statistically significant in producing outsized returns -- this is key
-- over a long period of time. For reasons that no one has adequately
demonstrated, only a small handul of traders or firms of any stripe
have managed to make this happen in reality.
As to poker not being like trading, I think there you are perhaps dead
wrong. In fact the theory underlying poker and trading have so much in
common that it has become a hyper-active field for quantitative
sciences and behavioral finance.
It's also worth bearing in mind that although there are many
particpants in the trading game at a given time most pros would argue
it only comes down to who has enough liquidity to be a significant
player in the game. In that regard it then comes down to several
dozen players all painfully aware of each other. Others follow in
their wakes. This is sometimes called 'dancing between the elephants'.
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