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Speculating

Is there hope for Forex retail traders wanting to make money?The numbers are disastrous. Virtually all Forex retail traders lose money. Most of those that persist lose big. There is no improvement over time, no matter how many years they keep trying, and no matter how much help they get. There is no hope. How bad are really the stats? And why are they so bad? Let's look at the evidence. Citi 2014 presentation of the Retail FX market They say there are 4 million traders (implying FX), 1.6 million in Asia, 1.4 million in Europe, and 150,000 in the USA. Mainly male (shocker) and of an average age of 35. It does not add up. An AMF doc from the same period looks at 15,000 traders from intermediaries representing 50% of the market. So 30k for France and 1.4 million in Europe? Americans are into stocks so their number is much smaller as expected. An unsurprising quote from the doc: "FXCM accounts larger than $10,000 have profitability that are double the average. Part of it is likely due to the natural selection of profitable averaged-sized accounts surviving and becoming large accounts." And the CEO said in an interview the smallest accounts pushed the winrate down. This doc says "Strictly Private and Confidential" so I won't share it even though it is accessible on the ECB website. Conflicting evidence: The elusive profitable FX individual investors According to the paper linked below, a studied sample of 1,231 accounts were found to be profitable on average (0.2%). www.researchgate.net Most people feel bad, demoralized, sick to the stomach, when they hear everyone loses money trading. Me, I feel bad, disgusted, demoralized, when I hear that noobs have the ability to make money. Almost makes me want to cry. There is something really rotten about clueless casuals finding success. Yuck I can just picture them being joyful and euphoric. I don't know, I don't understand, where this data comes from. I need to wash my eyes with some IG, FXCM, and myfxbook client positions data :) I need to warm my heart by seing dumb monkeys constantly go against the trend and hold losers for weeks 😊 In this paper we do not know who the guinea pigs studied are, how long have they been in the business? What we know is how long they subscribed to a service. And the average was 0.27 years, or 3 months. Those are not your usual daygamblers as: - The average opening equity is $90,854.03 - Average Holding Time for Trades (in h) 1,508.48 (63 days or 2 months) - The average total net gain was $190.30 (0.2% of 91k), it might only be from interests So this paper does not look at average Forex retail traders at all. Stats change completely when you remove the degenerates. You look at FXCM and IG client stats, you might find 80% short on a big uptrend, then you look at myfxbook - which attracts all the "robot trading" clowns, and 95% are short! The more daygamblers and "automated expert advisor 🤡" and 800 leveragers you have, the worse the stats. Remove all these 🤡, and sure then you get a totally different result. Conflicting evidence: 99% of noobs lose money, now that's what I like to hear A Forex website with 120,000 subscribers at the time (mostly FX traders) surveyed in 2020 3,127 Forex traders from 32 countries. 97% of respondents trade Forex, 43% Gold, 24% stock indices, and 9% cryptocurrencies. Half of users surveyed are 25 to 34 years old, mostly men, and 1 in 4 is 35 to 44. Roughly consistent with other stats, a bit younger. 72% of the Forex traders surveyed are fresh noobs, they had no previous experience before FX. The retail "traders" surveyed are a tad bit delusional, as 50% of Americans, 59% of Asians, 44% of Europeans, 42% of Oceanians and aye aye aye 100% of Africans think they can achieve more than 5% monthly returns. Between 1 in 2 and 1 in 3, and even 88% of Africans, think they can make more than 10% monthly. Typical stats: 53% have been trading for less than a year, I assume those are the "5% to over 10% monthly" types? 39% have been trading for 1-3 years, 7% for 4-10 years, and 1% for more than 10. The success rates (I believe this is self-reported): Conflicting evidence: Run for your lives! Forex is an evil scam! This may sound like an exaggeration, but I have the video. A lady from the french regulator, on television, was screaming "YOU HAVE TO FLEEEE FOREX DON'T YOU GET IT. R.U.N. A.W.A.Y!!!" In the AMF report "Étude des résultats des investisseurs particuliers sur le trading de CFD et de Forex en France" they come up with scary stats. Close to 90% of traders lost money in the 2009-2012 period, and even the more experienced ones that traded for the entire period (48 months) lost money at 87.56%. They have a graph "losses by leverage" but nowhere on that graph is indicated leverage... And of course there is no distinction between day gamblers and the rest, as their goal is to scare people away. You cannot say I am biased towards defending Forex, you know how much I LOVE watching noobs break their teeth. Honestly, this doc is pretty bad, and just pointless fearmongering with nothing to learn that we don't already know (90% lose money). In a BOJ doc I saw that around 90% of individual "investors" were day gamblers. Explains why 90% lose money. Ok so retail loses money when day trading I get it, but then how do institutional traders make money intraday? What is their secret? Simple. They don't. That's the big secret. There are other sets of data, like what FXCM did for us a few years ago, showing that traders with a risk to reward of 1:1 or more were greatly more profitable than bagholders with high winrate (3.12 times as much): "Of the traders who traded 1:1 or higher risk-reward, 53% turned a profit; of those who didn't, 17% turned a profit." Also they show 40% of their traders with 5:1 or less leverage make money, compared to 17% of the ones with > 25:1, and the ones that do make profit with this leverage probably only made a small deposit compared to their net worth. For obvious reason you'll never hear from a broker the correlation between day gambling or not and profitability. I heard from someone that worked at FXCM that they tried looking for an edge from their biggest losers, all that they found is they overtraded, this is again something you'll rarely hear from brokers for obvious reasons. In the end all we can take out from all of this, is some win, most lose. There is at least some little improvement with experience. "Intraday" Gamblers and leverage gamblers are gigantic losers that destroy the stats, as most of us I am sure already knew. And as Locke and Mann (2000) show in a study "there is evidence that trading success is negatively related to the degree of loss realization aversion." Might also want to add: Be a one trick! Warren Buffett is one big fat OTP that only value invest in blue chip US stocks in sectors he understands. 1 market. 1 strategy. And he is doing rather well unlike all the loud mouths with zero life medals that say he "misses out".
Education
by MrRenev
4
What are your odds of making it? How many get rekt?We have all heard anecdotal evidence. Every one throws random numbers around "be in the 80%", "be in the 91%", 99%, 90%, 75%, all sorts of numbers, usually the failure rate is pretty high and success is low. Day trading, or longer term. Real estate same story. And for long term investing you will hear "90% don't beat the market". I am looking at speculating here rather, althought alot of numbers take into account long term investors so keep that in mind (I'll repeat it when accurate). What is very often said is that winners have high reward to risk, and aren't day trading. From what I have seen around it looks to me that the people that make money day trading pretty much all scalp support levels with level 2 market data, or that sell programs and signals. No personal and anectode from here on, or maybe a little as bonus, I will look at studies. 1- AMF (french regulator) study of a popular broker clients over 4 years. The name of the report is "Étude des résultats des investisseurs particuliers sur le trading de CFD et de Forex en France". Now, let's get into the fun stuff. Seems small compared to the markets (forex + stocks + indices + more). Do retail traders getting wiped out really change much? Big institutions make more profit than a couple hundred millions over 4 years... Large speculators that make money, must be from hedgers and whales mostly. I don't think retail holding bags & gambling adds much. A large part of the lost money came from idiots placing tons of orders. How much is lost in spreads? Checking by volumes, those that did 1 to 10 million lost on average 3700 euros.... Say the average volume they did was 4 MM, that's a 0.01% loss... Looks like they are coinflip warriors that day trade and just lose money with spreads? My opinion the very few orders ones (losses are quite high compared to very small number of operations) are those that either go "all in" an a hunch and lose and leave, or get lucky, get excited, go in big, get shrekt, get scared, leave. And also those that start and can't stop losing, bad luck streak, disgusts them so they quit. So ye, the ones taking "big" losses early one are the luckier ones, they give up quick and never come back and don't waste time & take massive losses. 2- UKNF (Polish regulator) reports "Komunikat w sprawie wyników osiąganych przez inwestorów na rynku forex" (Communication on results achieved by investors in the forex market) 2 reports. Can't find the older one unless this is it. "The New York Fed’s Foreign Exchange Committee volume survey released in 2016 shows that trading by volume “non-financial customers” in April 2016 was at roughly 7% of all FX trades." Nice, nice. No, 93% are not making money off the 7% of small fish (just making a little, a rounding error in their profit). 3- FXCM report (they're a broker) I am so thankful for all of the 16-24 yo Forex experts, I can't help it I always get hysterical when I see their little faces or even just talk about them 🤣 If I meet someone that looks all defeated and tells me he got scammed by such an individual I guess our friendship will quickly be over because I won't be able to help just laughing in their face. I roasted an "educator" on tradingview & twitter, he threated to sue me + others. After he had already scammed people. And he repeated it. TV staff correctly banned him permanently, haven't heard from him since. Lots of clients were defending him. All their money is now belong to him. 4- 1999 NASAA report "REPORT OF THE DAY TRADING PROJECT GROUP" by the "NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION". As we have seen the vast majority of retail are day traders, so this sort of will tell the same story. In 1999 the business was not as developped, a largest percentage of participant very likely were more seriously, most no effort get rich quick with my 22 yo educator indicators gamblers joined later. 5- Brazil 2019 study of day traders I'm just reading an article here. I think the study can be found on the SSRN website. Had another paper from this site but it was a study on a voluntary survey of traders lol, so not worth anything. "We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and who persisted for at least 300 days". Ok so this paper is worth something then. They quote some old papers when day traders didn't compete with HFT firms, high success rates of course (I don't know if it counts locals, because I mean that's not speculating). 6- Article from Tradeciety (quoting their sources) 7- Do Smart Investors Outperform Dumb Investors? 2009 paper by Grinblatt Keloharju Linnainmaa. From... Some Chicago school of Business? Found it on Yale department of economics site. Robert J. Shiller personal page (Shiller PE ratio). Seems legit enough. 8- What about non day-trading market participation? Well, there is absolutely nothing! It's all about day trading. Like not being clinically retarded is extravagant. So to sum up: The ~76% money losing rate european brokers display on average, I think is over a quarter. China literally totally banned leverage with FX (wonderful country), and you wonder why Bitcoin and other ponzi schemes have so much success? And crypto baghodlers actually expect China to not entirely ban crypto eventually... They are slow and incompetent but they'll get there. And this is a classic commie tactic: Let them think you are pro crypto, they pop their head out, you can arrest them. When they'll have arrested all those involved with crypto they wanted to arrest, they are going to lay a blanket ban on all cryptos. There is no hope, there is no light at the end of the tunnel, more and more brainlets are treating the markets like a casino, and it might only be a matter of time until it gets completely banned for retail (thanks, always protecting the morons). Stats are not that bad. 90% lose over a 4 year period? Maybe 90-95% of all those that join end up eventually losing or quit after a short while? It's not that bad. And remember a whole lot are stupid day traders, and they destroy the average. In the first year 60% of restaurants don’t make it past their first year and 80 percent go out of business (get rekt) within five years. In the first year 80% of retail traders don't make it past their first year and 90% go out of business (get rekt) within five years. Not much surprise here. Lmao at all those celebrities restaurants that fail completely! 😄 Not talking about famous chefs, I mean action movie actors & the such. Restaurants failure rate isn't counting the recent "min wage raise" in the USA. Good luck with those. Success rate would honestly go to zero. Simple maths. Politicians are really really stupid. House flipping is a very intelligent activity and has about the same success rate as day trading. US bureau of labors stats show that small businesses in general have a 50/50 survival rate over 5 years and 25% over 15 years and that's quite high. Most "educators" are either young or old (uuu the experience right). Studies show middle-aged men start the most successful businesses. Middle aged men are too busy doing actual stuff? I am between young and middle aged myself if you were wondering. I could go look for more stats but it's all the same. Success rates are never 100%. And the harder something is (because of hygiene regulations, because of cognitive demand), the lower the success rate. Medical schools have an acceptance rate of 7% on average, but that's not saying that 7% of all people that apply get in. "MCAT and GPA Grid for Applicants and Acceptees to U.S. Medical Schools, 2017-2018 through 2019-2020 (aggregated)" ==> 42% Teens with low scores don't even bother applying thought. And once in school how many end up with a doctorate? Sooooo... Speculative trading is one of the hardest activities, it is one of the hardest psychologically and most cognitive demanding. I crack up when people try to cheer themselves up and go "smart people don't make good traders because emmm ego n perfectionists n stuff". It's really not surprising that the failure rate would be at that level. Medical schools have a barrier to entry, which is why the failure rate is not as high, but absolutely anyone can start trading or open a restaurant. Obviously failure rates will be higher, and much higher in the case of speculation. Just imagine the average person. He's not very smart. Most people are somewhat isolated from the rest of the population. Engineers are surrounded by people with master degrees and doctorates, not janitors that can't add 2 and 2 and think Bloomberg can give 1 million to every one (lol). The average person is not very bright, and 50% people are dumber than this! In the 90% failure rate you got all kinds of delusional clows, all the bottom feeders are here. AND! Remember! This includes a big majority of day traders! I don't know what the numbers are for non day trading, but over a 5 year period the failure rate might only be 70% or so! Cruel reality is cruel. If you are rather smart, or at least non-retarded. Let's say you are in the top 25% of people (> 110 IQ), you have a real chance of making money if you put the effort into it. Probably doesn't need to be a genius. Just to make some money now I'm not talking about making millions either. 90 to 110 IQ I don't know. Slow people under 90 IQ, it's my personal opinion they can't possible be successful. Just my personal opinion. Like my personal opinion is that people with (today's) IQ < 90 have never and are never going to solve any math problem, or find some new elemental particle, or build a rocket, etc. If they manage to remember how to lace their shoes and fill a welfare request document that's real good, and that's all society will ever require of them 😉. Marathons, Chess, stuff where you can't cheat. Masters in those disciplines reached the peak after training for decades. Musclemen... Activities where you can take steroids... "The Mountain" became one of the strongest men in the world 2 years after lifting his first weight. Now his face is deformed 🙃 Strongment events that rely on strong joints not just muscles, in other words steroids don't help, interestingly their records haven't been broken in a century+ The public thinks they can get something for free. They think they can have success in something instantly, like it's a web link, just clic and here y a go. The gall. You got people so stupid they don't even understand how stupid they are, they struggle with the most basic concepts, and they casually think they're the greatest mind of all time, and will become some super hero beating HFT firms and outperforming Jesse Livermore etc. That amount of delusion is absolutely staggering. What more can I say. Anything other than flipping burgers takes time and effort and brains or brawns and sees some people fail. The competitive activities have higher failure rates. The more competitive, the lower the success rate... Why am I even typing this... But sure, I'm going to keep seing thousands of newbs land every months, and chase the twitter expert, or look for the person that joined 2 months ago and said "price go up" just before the price goes up (not joking I saw someone like this recently and the update idea after the breakout had literally in the first line "Volume is low not a good buy I am looking to short", literally the first line, and newbs that saw "green candle. price go up" are celebrating the "great call"). Absolute pieces of ****. I don't always read everything, or watch entire videos, I read diagonally and I think every one should, I pick bits in articles I am interested in, and I think that's what people should do but maaan. If you're not even going to bother reading the first sentence and are jsut looking for the traders with the most successful apparent last few calls, you really deserve to lose everything. It's like the USO buyers that didn't bother finding out what they were buying. Or stock & FX traders that never touched a future and then went all in Oil without learning what it was or anything. That's really insane to me. They certainly deserve to get wiped out. If I may give some tips around all this:
Education
by MrRenev
13
Speculating & Investing: It is not for young people!All the middle age dudes that were worried that they don't have the fresh quick mind of younger players can rest assured, they are not disadvantaged, it is the other way around. Everyone has heard 1000 times that what made a trader/investor was being wise, or another way to say it is rational, or not emotional. It's not having quick reflexes or being young or even having 200 IQ. Note I said speculating not trading, market making arbitrage or executing someone else's orders doesn't count. Warren Buffet starter & Jesse Lauriston Livermore started at 15 yo or younger but they are exceptions. And Warren didn't make big returns before his mid twenties, Jesse Livermore started making real money in his twenties too i htink with his first big win in 1901 at 24 yo, he turned $10,000 into $500,000 after buying Northern Pacific Railway. It may be a stereotype that young people are dumb and reckless I don't know, and every one (except the teens themselves) has noticed that: - Wall Street Bets clowns buying options on leverage "it's within my personal risk tolerance" - 21% of college students with loans in the USA have used those loans to buy a cryptocurrency - Robinhood, Tesla, Bitcoin are extremely popular with 18-21 yo's - "Ok boomer" etc, they think absolute legends are just "too old to understand" their investment decisions - A large number of young have delusional beliefs "we can just tax the rich and start a communist utopia" - Licking toilet seats, licking groceries and putting them back for "fame" (these are of course the most extreme cases) - GUH! Learning to invest or gamble takes time, teenagers are better off continuing their lives, and if this interests them they can learn as a hobby in the background. Who loses everything? It's always young people that go nuts right? Maybe it's a rite of passage and they are all condemned to lose everything. So anyway, if you thought some people were "too young" to participate in the stock market or currency exchange etc, you are right. And if you thought old people were too old, and the best were all super young and super quick, you were wrong. Soros started in his 30s btw... Now, for the proof. Here is what the science says: www.nimh.nih.gov www.urmc.rochester.edu So all the 30+ boomers that thought it was too late, emm no actually it's not too late, 30 yo is scientifically the perfect and earliest time to get started ;) And maybe I didn't throw my life away by starting too late after all yay :) And next time a "legend master of charts" tries giving you a lesson, it might be the moment to throw this to them. They're so ridiculously embarassing and delusional thought, probably won't work. There is 1 exception: Our governments & lawmakers. They never seem to really develop that rational part much. When you are in this business for several years you can tell that the prefrontal cortex is the most important asset to success. Before IQ, before intuition, before how much money you start with. By very far. I hope you found this as interesting as I did. With lockdown & markets sideways 90% of the time, I think I will make more ideas about history like my last one, the winning mindset, how to develop a strategy and so on.
TVC:GOLDEducation
by MrRenev
5
Speculating predisposition testI recently published an idea on the (mostly innate) qualities required to be a good speculator. Next I will write an idea on what one has TO DO to accomplish his goal of being profitable. Not general qualities. What actually must be done. That thing we never hear about, trading educators never ever tell anyone this, all they do is mention "the psychology" and generalities that anyone with common sense can figure out, and the reason is simple: They are not profitable . There are even "trading educators" that have a career as marketers and openly admit they never took a single trade. What is it that if done, and provided one does not have fatal flaws, with "100%" guarentee success? Stay tuned to find out :D Meanwhile I thought of this which I think is a fun test. Got the idea from seing so much troll logic and flawed arguments recently. Being able to make an unbiased logical analysis of news price fundamentals is a necessary thing to make money simply, and even just being a good human being and not a big disgusting pile of you know what. If you want to take things to the next level I think learning (and understanding...) abstract algebra (groups, rings, fields, modules, vector spaces) will turn you into a superhero. The logic, the analytic reasoning. It's too good. Compared to the average illogical emotional herding clueless gambler ye superhero is the right word. You will just see and understand things differently. Can you tell me what are the flaws in each of the 2 demonstrations that gullible people fall for? Not looking for anything too complicated, just the few gaping holes in the reasoning. I will answer comments and I will post the answer as an update in a few days.
NYMEX:CL1!Education
by MrRenev
6
My top 10 qualities for speculating successHere is my personal list 1- Adversity This is the biggest one. 1 & 2 are the biggest one. You know what we call those that have low adversity? Starts with an L. Ends with osers. You should not flinch when you get unlucky, when things are working against you. You should love this! Makes it harder! Great! You should welcome difficulties. Every year millions of clowns come and "give it a go". They are great for providing liquidity to markets, filling my orders. And every year millions of clowns do what good little quitters do and never come back. There should be a rage burning in you. You will not stop until you have reached your objective. NOTHING WILL STOP YOU. "Awww but life has been so hard to me and bla bla bla" ==> GET OUT THEN! There is no place for those here. You should be borderline masochist. Each time the market hits you you come back asking for more. Losses will not discourage you. You will NEVER EVER give up. You will NEVER EVER break and make a mistake because losses made you feel bad or wins got you excited. Nothing will stop you except total success. 2- Always want to compete / Will to win It is necessary to want to win. And think hard (not work hard) about how to stay at the top once you get there. Always maintain a competitive edge as Warren Buffet says. All you care about is total victory. Every day you obssess about markets, and think about what you need to be the best. This is true in everything, but especially here, it's a highly competitive game. You want to know everything about trading (unlike the pathetic clowns crypto hodlers that only care about "will price of my loterry ticket go up" they are really the ultimate example of what not to do). Gamers that become the best are seen as kids that play all day long non stop and rage at their teammates when they mess up, and rage when they lose. You have to rage when you mess up. Rage when you have a losing spree. "Trade like a robot beep beep no emotions" PUAHAHA what a joke are they serious? Rage when you don't succeed and do what it takes to be. Review your trades over and over obssessively. If you have to shoot yourself in the leg and lose 5% of your account to learn you lesson do it (not financial advice). Winning should matter more than life itself. Top athletes are taking plenty of drugs that will ruin their lives past 35 and they know it. They do everything to be the best, and accept the sacrifice of their older years. Luckilly with speculating you don't have to suicide :D You got to have a competitive mind. You got to absolutely want to win. You should feel good when you are having success and see the other suckers blow up and quit. Going on tradingview, myfxbook, checking the profiles of accounts that were active (and usually argued alot) a few years ago, and seing they have been offline for 12 months or more should put you in a state of euphoria. You should feel your heart starting to pump faster, and get a rush off seing other inferior traders fail miserably, while you are approaching the top of your game. 90% of traders will fail within two years, and within five years 99% will no longer be trading. You need a winning mindset. You are not here to "give it a go" (makes me vomit). You are not hoping to win. You are here to win. If you remove all the delusional unintelligent, gamblers, "I'll give it a go", and only keep the "I'm here to win", stats are waaaaaaaaaaaay better than 10% and 1%. 3- IQ: Systematic intelligence Some say it does not matter. Some clowns even say it is counter productive. I'm going to go to town on them. I'm going to write a lengthy paragraph on this "taboo" subject. How does the ability to process and understand more make you a worse speculator? They use really stupid flawed dishonest logic "oh well they overanalyse everything". Maybe flipping a coin is the best strategy? Just really sad excuses. People with higher IQ make more money... Income goes up in a straight line with IQ... Maybe speculating is the big exception? People with higher IQ are more disciplined... And discipline = much better results. I have a hard time imagining someone having great intuition and thinking the opposite of every one without being smart and without analysing/reading a lot. Makes 0 sense. Other studies tell a similar story. At the top there are professors, MD, research (or number 2 after geniusses), finance is around the top but not like "150" on average they are a little high but not crazy high. A few findings: We find that low-IQ investors are more likely to herd in their buy vs. sell decisions but IQ has little influence on sell vs. hold herding. High-IQ investors’ portfolio holdings outperform low-IQ investors’ portfolios. Low IQ investors portfolio are less diversified. www.erim.eur.nl ==> Low IQ investors refuse to take losses (baghodlers), herd into hype stocks (I extrapolate), go all in in a few investments. And obviously get not as good returns. People of low intelligence keep repeating the same mistakes over and over. It's the same in every discipline. The same patterns repeat over and over and they keep getting scammed over and over and never notice the pattern. Just like a pattern in an IQ test... It might not be the perfect intelligence test but it sure is the perfect "pattern recognition" test. Another quote from Warren Buffet: "Success in investing doesn't correlate with IQ once you're above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing." See? He never said "Oh ye sure buy total garbage when there is blood on the street and don't worry you can be mentally retarded and reach the top 5% investors". Bookworms are seen as smart and they don't make good traders. All those "expert bookworms" economists and other, aren't making billions, and this shows it takes more than being a nerd to make money. People that think this implies being dumb is a strength are honestly too stupid to trade. "High-IQ investors also exhibit superior market timing, stock-picking skill, and trade execution." papers.ssrn.com 16% of the population has an IQ above 115. 25% has an IQ above 110. That's a good start. IQ is not all it takes. But if you are under 110, sorry, you're going to have a really hard time. Why not try something else? In an academic environment, past the first few years, people with an IQ under 115 are considered stupid. You see very little of them. Finance is not a university, but it is a cognitive intensive activity. As IQ goes up you get diminishing returns, but the flipside is as you go down intellectual abilities become a exponentially growing handicap. And having some diploma is pretty useless. Being street smart, not gullible, is way more important... People (especially on the lower end of the scale) really hate this. It's a big taboo. They cannot stand being less intelligent. Always finding excuses and trying to comfort each other. But facts are facts. Nature is cruel. From some paper, IQ had a very high correlation with training success in the military and performance at highly complex jobs, but it was much lower for creativity and leader effectiveness. Abraham they say wasn't that bright (the US were pretty small back then thought). Athletes are not exactly famously smart. Probably all of the celebrities climate activists are pretty low too... "Useful idiots" (Lenin quote). Don't trust internet tests. The problem here is every one thinks they are borderline genius (I remember reading a study where only 2% of respondents claimed they were below average), and even if they find out the truth they'll be in denial. I guess we need them to lose & baghold and add to losers so we may get filled and win :) Someone has to take the opposite side of my trade. 4- Emotional stability Not caring what others think. Also having a big ego (but that doesn't get in the way). Includes being self aware (is this emotional intelligence?). I'll just quote Warren Buffet here: "You don't need a lot of brains in this business. I've always said if you've got an IQ of 160, give away 30 points to somebody else, because you don't need it in investments. What you need is emotional stability. You have to be able to think independently, and when you come to a conclusion you have to really not care what other people say. Just follow the facts and your reasoning. That's tough for a lot of people. But that part, I was just lucky with. I was born that way." One of Jesse Lauriston Livermore biggest loss was in cotton when he listened to someone giving him troll advice (guy was selling while advising to buy), he somehow got himself manipulated when he knew, and he said he knew, the facts were telling him otherwise. Lmao imagine changing your mind on something because some brainfart that thinks he knows something tells you he is 100% sure. LOL! Here ego CLEARLY protects you. I'm cracking up, I just think of absolutely moronic crypto investors when they try to convince common sense people, with their risible ridiculous logic. Most often than not they make zero sense, contradict themselves even, and don't even know it. Ignore the herd mocking you because they are too stupid to understand what you do. They're nothing more than cattle on route for the slaughterhouse where they will be turned into delicious steaks. 5- Discipline Straightforward... If you are not disciplined, you will NEVER be a successful speculator. Or investor. Maybe you can (barely) make it as a spread trader or arbitrage that I don't know. Just take the good setups avoid the bad ones. Get in when you should get out when you should don't get out when you shouldn't. Idk I am trying to find something to say about this... Removing a stop loss because "I really can't take a loss now" or moving to breakeven because "I want to feel relieved" or getting out early of a winner sending all the right signs or suddenly going 25 leverage in Apple puts after losing your money to make it back "it's within my personal risk tolerance" is plain retarded. That's it. Nothing more to it. Literally retarded. 6- Logical not "emotional" It's all about processing clean facts logically. Funny but a study found that traders with more prenatal T, by checking their fingers ratio (the higher the prenatal hormones the smaller the ratio - index is smaller - the lower the empathy the higher the systemizing abilities). content.time.com Empathizing & systemizing abilities are as far as I know exclusive, the more you have of 1 the less of the other. High systemizing abilities are required to make it. I will also add the E-S theory is a better predictor than gender of who chooses STEM subjects according to some psychologists. Obviously, they get alot of hate (from the idiotic "we're all perfectly equal" club). I mean... it's obviously true. Or let's say very very probably true. IQ tests are very much designed to test for intelligence & systemizing abilities rather than "all" intelligence, which is all we care about as speculators. Being able to work quickly with numbers is going to be more useful than being able to detect how someone feels. 7- High appetite for risk Don't pay too much attention to this, it will make more sense later. Speculating is literally about taking risks. If you don't want to take risks I don't even know why you are reading this. Maybe you'll win maybe you'll lose. You have to want to gamble that money on each bet and risk losing it, to sometimes get returns. And when a great opportunity presents itself, when the conditions are right, you should WANT to risk big. Within reason. When Stanley Druckenmiller told George Soros about a short opportunity and that he risked more than usual, Soros told him he was crazy and that was terrible risk management - because with such an opportunity he should have gone with way more size at least double what he did. They still only risked 2% there, but it was way more than usual. Lists of famous traders are full of examples of really big bets (400 leverage against the nzd...), sometimes they go wrong but sometimes they go right. Jesse Lauriston Livermore is known for making alot of really huge bets. He made - inflation adjusted - 1.5 billion USD when he shorted the US stock market in 1929. He kept having huge gains and huge losses even going into debt after going from nothing to big multi millionaire. He took it too far XD 8- Being risk averse, reasonable HAHA! It really is important to be reasonable, risk averse. You want to avoid losing everything. You want to avoid wasting your capital into garbage bets. You shouldn't be so risk averse than when an opportunity presents itself your just freeze and cry yourself to sleep. When the opportunity comes, hit the gaz, become a degen gambler - within reason. "Contradictions" like this is part of why over 95% don't make it. And here neo-cortex, basically consciousness, is going to make a huge difference. The more "advanced" a being is the more self aware and can learn to naturally have qualities that are or appear completely opposed. A smarter mind also is a more agile mind. A strict set of rules you follow like a machine can help... It's not the ultimate solution, the holy grail. It's a crappy suboptimal fix when all hope is lost. Machines themselves... They replace humans at hft frontrunning firms that buy orderflow from robinhood, they use algos for market making, they execute statistical arbitrage at quant funds. They're not speculating and they aren't going to anytime soon / ever. Oh good luck with EAs LOL. Big obvious frauds. 9- Patience There are several aspects to this First, 7 & 8 continuation, you have to avoid risking money on random movements, and wait for the right setup, no matter how long it takes, you might even completely miss out and not see another setup for a long while. Second, once you are in, let it run, don't be in a hurry to get out (WHY?). I don't even know why anyone would want to get out. It feels good to be in a winner. It's just dumb & cowardly. WEAK. Thirdly, it's going to take time to get good and grow an account. Deal with it. Or join the wallstreetbets autists and pray to get lucky, and inevitably end up blowing up and maybe you'll end up on CNBC making anchors laugh. 10- Being interested Obviously... Is it even worth adding to the list? Yes, because 10 is a nice number. Haven't seen many masters that were in "for the lulz and lamboz" and were bored to death by markets.
TVC:DJIEducation
by MrRenev
4