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>That article was talking about that one Block office only. There are
>daytraders at other Block offices that made plenty.
>
That may be true. Without facts (account statements) I am skeptical. When
actual brokerage statements are analyzed, (read: reality) the fact often
emerges that far less fewer people are actually as profitable as *say* they
are. As evidence to the validity of my position, I point to "An Analysis of
the Profiles and Motivations of Habitual Commodity Speculators" (Canoles et
al), a scholarly research paper presented in "The Journal of Futures
Markets", vol. 18, No.7 p765-801. "According to brokers, approximately half
of their clients perceive themselves to be successful traders. This is
particularly noteworthy given that only 10% have career net profits." (p786)
I emphasize that this in *not* some off-the-cuff statement. Read the article
and you will see it is a scientific study using accepted protocols for
research. I would recommend the article anyways, since it was fascinating.
Scientific evidence that most speculators are win maximizers rather than net
profit maximizers. Hence, cut profits short (to ensure a win), let losses
run (to give them a chance to become a winner). The reason Canoles gives for
the amazing seperation of fact from reality is "A trader seeking to maximize
wins could achieve a high self-defined level of success while still being a
substantial net monetary loser." (p786) By the way, their definition of
"habitual commodity speculator" would definately fit most of us here on the
list. "A habitual commodity speculator is defined as a speculator who has
traded for a minimum of three calendar years and who has had a minimum of
twelve round turn transactions over that period." (p.768)
I would bet money that *a lot* of those unprofitable traders at the Block
office in the article were *saying* how much money they were making while in
fact, when all of their trades were taken into account, they were net
losers. They remember the great winners and forget all the little losers
that overall put their account in the red. And what is the statistical
probability that numbers of other daytraders at other Block offices were
making money when *not one* of the traders at the Block office in the
article were profitable legally (one was profitable because he assigned
winners/losers to different accounts post-facto)? Consider the ~70 traders
at the Block office in question to be a sample, then infer to the entire
population. I doubt it comes out as a big number. Certainly this does not
preclude any traders from being overall profitable, but very few if any.
Scott Hoffman
Issaquah, WA
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