Doubt it, it takes alot of money to start day trading properly, also you cant short sell here either :/

I've looked in to it, been on to forex forums and attended some online seminars. It all seems fairly possible providing you have fairly reasonable start up capital. The hardest thing I found at the beginning was locating a premium forex broker. Until I've got the adequate funds I'll probably stick with QL and Poker :)

stick with ql to make money? hfhf

In this case, hfhf means "hopeful...VERY hopeful."

I was referring to my hobbeys rather than strictly what I make money on :) Poker for money when I can be assed, and QL for fun.

It's essential with forex, stocks & shares and even poker to have considerable knowledge of the topic. If I spent the same time analysing the stock market and foreign exchange market as I did with poker before investing money then I'd probably find it fairly easy to make a profit.

I dont think thats directly comparable. In Poker, you can start out on low-stake/amateur tables. In financial markets you are always competing against bigger fish who have a shitton of money and entire research-departments at their disposal.In a Poker-game, everyone has the same information available to make their decisions, whereas that is not the case in fin. markets. Compared to what an individual can reasonably do, a hedgefund or investment bank can throw an absurd amount of money at research, IT, staffing and so on. That relation newcomer vs. pro is a lot more favourable in Poker than in trading.

Obviously its tempting - with margin trading you can make a lot of money out of a small amount of money in little time. But looking at the competition in poker vs. trading, you are way more likely to survive in poker.

I think you don't completely understand poker in that case. With poker there is an enormous amount of information at a players disposal, although how to perceive and use the knowledge comes with experience and research. It's not identical obviously to more directly financial investments, but it's still similar in terms that heavy research will help you with the 2.

I didn't play for money at all for the first 6 months, I spent my time researching strategies and various other things. This meant that when I eventually got to playing for real money then I was at an advantage for the stakes I was playing for and I also progressed quickly and learned faster than your average amateur player.

In trading it's also about how you perceive the knowledge that is infront of you, most financial departments will use the same resources that an independant trader would use. FTSE, The Economist and various BBC news casts (I am forgetting some I know).

I'd say the balance of survivability between poker and trading is fairly similar as it is largely down to discipline of your money management and also the assessment of the risks you take. To make a lot of money out of a small amount of trading is difficult unless you are intensly lucky or some kind of prodigy. You need large investments for large returns, in poker you can make small investments for large returns although the amount of times you need to take those risks will be multipled (depending on what kind of poker you play, such as cash games/tournements etc).

I don't have a clue about poker, but you might like to know that you have a very simplified (that's polite-speak for wrong) view of what's happening on institutional trading floors.

Granted I don't know as I don't work in one, although the software available to the public for forex trading is pretty indepth and the software I've seen in universities seems fairly similar. Although having it on a large scale I'm guessing makes it easier and more efficient finding the information you need?

What I was trying to say is that you can't be very good or profitable at either unless you put a huge amount of time and effort in to research, regardless of the size of your investments.

at least he wont lose money with ql..

Not if he buys prem.

:P

haha

meh. it's pretty much like poker, gotta run good.

I've shortly worked at an investment bank, will get my Masters in Finance shortly and have about 4 years of market experience.

So, taking that into account, if you're planning to start day trading as a Joe Blow (no knowledge/former experience with financial markets), I strongly suggest you rethink what you're about to do. This isn't poker, a good trader can possibly expect to show a 30-50% return p.a. trading full-time. Meaning, to get any sort of reasonable return on your time invested, you're going to have to invest a pretty respectable amount of cash. With that in mind, in my experience roughly 90% of beginner traders lose most of their investment eventually. Those 90% include people with IQs over 130 and/or people with degrees in Finance, etc. Feeling lucky?

Oh, and don't even think about trading on forex. In poker, they have the saying of "If you don't know who the fish at the table is, it's you." In forex, the fish at the table is going to be you, guaranteed. Foreign exchange is the most professional market in the world that lures in amateurs who are given huge amounts of leverage. You'll be slaughtered.

If you are serious about learning daytrading, find a real trader if at all possible and beg him to show you the ropes. And by a real trader I mean someone who has been trading for 5-10 years, not Dwayne from work who has made 15% in the past 3 months he's been trading.

To summarize:
* If you want to have a pass-time to burn money at, trading is for you
* If you want to get rich while not putting in much effort, trading is not for you
* If you're razor smart, willing to put in more time than the average person does for his graduate degree, willing to invest some money you know you're probably going to lose, but want to be a millionaire before you hit 30 and a get a possible high-earning job with a possible huge bonus check, welcome to the industry.

By the way, before you start trading, figure out what your edge over almost everyone else is. If you don't know, you don't have one.

Nice response deji, I've been trading in forex for about 6 years now. Absolutely impossible to get anywhere, doesn't matter how much i read or watch I just can't seem to get a system that works over 20percent of the time:(

By the way - do you study in Estonia or somewhere else?:-)

In Estonia, yeah.

I study finance as well, but I don't think I will pick the path of financial markets (I am more into insurance). When I saw that topic, my first thought was "Why start with day trayding?!". Of course dt might be the most profibtable. Still, as for me, it is not the best choice for a beginner. Also, shares market is more interesting than fx, but that's just an opinion.

I think that the most fun thing is to look at the whole market, select some promising companies, then pick one or a few (for diversification) and put some money into it/them. I've done it only once and was quite successful, but I am well aware of risk connected with stock exchange (I've lost like 500eur of "potential" profit over 1 or 2 days). You are right, it's very easy to fool yourself... "I made xx% on that investment, I should invest more money!", then you can lose a lot, try to earn back and there goes a vicious circle :-) Btw. have you read Murphy's Technical Analysis? A lot of people consider technical analysis as bullshit, it wouldn't be very useful on small markets, like Warsaw Stock Exchange, but some guys recommended it to me many times :P

I don't like technical analysis (mostly bullshit), and I've never personally met any professional trader that made money just by drawing some lines on stock graphs.

To each his own, I personally dislike both insurance and trading :P M&A and investment valuation seem more varied and fun.

lol @ fun

so it's like poker.

yep,

Except while othre playrs get to see the flop you only get to see all five cards in the end when all bets are made, the rules are about 50 times harder and everyone else on the table seems to know them by heart ;)

/e
Oh and they getcomputer to calculate the odds for them.

And you're never going to be up against someone who's doing it for fun and isn't interested in making money.

(edit) And there's never any table that only has fish like you, every time you sit down to play, you'll have Daniel Negreanu and Gus Hansen at your table, too.

My shares were doing really great but there was some guy (one of the richest in Poland iirc) who had around 5% of that company's shares and decided to sell most of those he had over one session... Guess what happened with the price :D

Hah. A few years ago there was a Turkish entrepreneur that clicked the "sell all" button on his internet broker account, quote, "to see what would happen".

What happened was that he instantly sold 6% of all shares of Turkey's largest logistics company into the market with one single order, to the lower reference limit set by the stock exchange.

Once he realized his mistake, he started buying the stocks back. That button click cost him about 4 MUSD. :D

u don't know much about poker :\

or you know less about finances ;)

I know alot about poker, and I know what fellow poker players who are into trading have told me. There are alot of similarities; risk/reward calculations, variance, imperfect information etc.

Those things are a part of any investment decision, whether you are playing poker, trading, buying real-estate or releasing a new brand of sneakers. Is buying real-estate the same as playing poker too?

I would say it is, yes.

Except that the EV is positive :]

wll, I do know a few things about poker, and I know what books and my professors told me about finances.

I didn't at all say that there are no similarites. In fact, I started my reply with "yep".

The point is that it is simply way more complex that poker and the 'players' are generally way better and have way deeper pockets than you.

u admit to knowing little about poker yet u claim the game of financing is way more complex and the players are better.

lolwut.

"know a few things about" is a phrase which does not mean "to know little."

I played for a some time on one of those "get $50 for free" deals, and managed to come out with a small win when I was allowed to take money out. But I mostly played on the lower tables, so really no expert at all.

But since you say you took your knowledge about the financial market from ffiends who play poker I dare say that my knowledge of poker is better than yours of trading ;)


About the more complex, here is a short example (for Texas Holdem).

Poker has a measly 52 different cards, where four always have the exact same value, i.e. hearts, clubs, spades and diamonds.
Now you can easily arrange the 52 cards in a 4 by 13 rectangle, going from 2 to Ace in columns and one color for each row. Then mark their relations, mainly those in the same row and column work better with each other, also cards closer to each other and last but not least, higher is better.
Now, this table including the relations can be done by anyone not completely stupid who spend at least an hour with the rules.

Conversely, in finances you have thousands of different "cards" in different areas such as stocks, derivates, currencies, bonds, etc.

And those are also all connected, a very simple example is if you as a European buy US stock in dollar and the dollar loses, you lose even if the stock remains stable. And that is just a very, very simple example.

the players are better.

How can you seriously doubt that?

People have to graduate from college in the hopes of becoming eligible to play with the big boys, people like Buffet and Soros would probably laugh at the petty sums poker pros are dealing with. I would guess in the last ten years Buffet donated more money to charities than all poker pros earned combined.

Some of the 'players' you will be playing against are computer programs. (see mammon's post)

Some of the players have deep enough pockets to influence what card will turn up in the river.

tldr:
Poker is just a child's game in comparison, read some books about it if you don't believe me.

To the first point: U way oversimplify. The strategy is infact very complex, why do u think even today NLHE and much less PLO haven't been solved if they are so simple?

To the 2nd: Maybe at the highest levels this is correct. At the mid levels of poker these days, u encounter a fish maybe twice a week if u play alot. All the players u face are either semi pro's or fulltime, todays games are very tough.

U might also like to know that one of my closer poker friends is just finishing up his finance degree and thinks there's way more value in the financial market than in todays poker games.

well then why don't you ask you friend which he thinks is more complex and where the players will be better ;)

About being solved, please read up on game theory (really a very interesting field!), where you can learn that zero-sums games such as poker are simply not "solvable" and that it does not depend on the compexity.
Personally, I have played chess competitively for years, it hasn't been solved by a long shot and still computer opponents own everyone.

Also, for one last do-it-yourself example:

At any point in a poker games, think about all the different information you could gather to help you make the best decision, if you want include past behavious of your nine opponents in similar hands.

Now, think about how much information you would have to gather to make the perfect decision how much of what financial product you should buy, this of course includes all the information that can effect the performany of every single invesment possibility.



Lastly, consider that unlike poker the financial market will not wait until you have made your move.


I really don't understand why we are even discussing this.

the amount of information in both cases is infinite, which means there is no perfect move. You might argue that finding a profitable path trough the information based on certain heuristics is easier in poker due to it's simpler rule set. But your success still totally depends on the opposition.

(e.g. what may be profitable vs one opponent might not be vs some other etc)

So these sort of sweeping generalizations are pretty useless.

I agree.

And all I said was that the field of finances is more complex and that the players are better.


The differences is that forex specifically and money conversion rates are actually used for something real and the 'players' are mainly piggy-backing, while in poker money only comes in by players losing it.

In the end, we are trying to compare two games, one is a positive sum game and the other a negative sum game. Unfortunately, I don't think koOma knows what that means :/

poker = financial market

geddit?

He thinks it's tougher to make money in poker, which pretty much says it all.

I don't think they're comparable.

Not directly or completely, no.

But if you analyze it based on game theory, you can draw some conclusions.

too bad gametheory is a flawed way of approaching poker.

I'm afraid you just made it abundantly clear that you have no idea what game theory really is.

GT oriented poker is based on assuming ur opponent doesnt make mistakes and tailoring ur game to be balanced and unexploitable. Problem with that approach is everyone makes mistakes, and while 'perfect' GT play is profitable, it's less than that of an exploitive style.

Read less forum posts and more books.

And by that I mean books about game theory in general, not a random "game theory in poker" book.
Maybe then you will understand how what you wrote shows that you missed the whole point of game theory.

I only know one thing for sure: I won't be able to explain it to you, at least not based on your responses so far.


To wrap it up, a short quote from wiki for you: "game theory has been applied to political, sociological, and psychological behaviors as well."

He is actually right, game theory is mostly about equilibrium states, which are states deviation from which benefits neither party, so they stick to it. koOma said as much, only in more lay terms.

Maybe if you stop being awed by the oh-so-deep-maths of GT, stop passing it around like a magic pill, and actually try to understand it, you will not find yourself uttering nonsense like "zero-sum games are not solvable" again.

thank you czm

yes it is about equilibriums. (Not sure what you mean with "which are states deviation from which benefits neither party, so they stick to it.").
However, they are equilibriums in a model that you have to design.

If you say mistakes (deliberate "mistakes" such as bluffing and/or real mistakes such as misreading your opponents) are an integral part of poker then you cannot simply leave them out of your model.
And if you include them, for example through probabilities or maybe through player types (too passive/too aggressive, etc) then suddenly game theory does includes that very thing koOma said it doesn't.


concerning the zero sum game I have to admit I wrote that badly, what I wanted to say that some zero-sum games with poker (and comparable games) as an example are not solvable.


However, I really have no idea where you want to have found that magic pill crap or admiration for "oh-so-deep-math" in my posts.
Anyway, at least tell me if you actually feel game theory does not at all apply to poker.

sure it applies, u design ur game to be as unexploitable as possible but u then adjust to ur opponents mistakes. In which case ur so called GT oriented approach might go out the window cuz the most +EV strategy is to open ur game up to exploit ur opponents weaknesses.

This strategy can in all instances be countered/exploited and if ur opponent adjusts to this, u readjust. Things like calls too much, folds too much, never bluff raises, acts really fast with strong hands, never bluffs past flop are common examples.

There are pure GT players, and while they have less variance, their winrate is significantly lower than exploitive-style players.

you seem to be serious about this poker thing so tell me, how much do good players usually observe the table before they start with serious bets?

not sure i understand the question.. Do u mean be4 they start adjusting to table/players?

was drunk

please, please, with cherry on top, read an actual book on game theory and stop lingering about some random "game theory approach" you must have picked up in some forum or something ...


Cause all you have achieved so far is showing your ignorance.

havent read anything, just know what a friend who plays 25/50 and GT poker told me.

yes, I am sure of that.

I already said that here: http://www.esreality.com/?a=post&id=2048256#pid2048256

The problem is that you kept going on an on about some random "game theory approach" and even tried to explain to me how you think game theory works.
the problem is, I actually did read books on it and took that class at university, so why can't you just accept that your impression of game theory may be wrong, especially considering all you know is heresay?

lol no. who are u to say a high stakes pro has the wrong idea about game theory? lulz.

I am someone with a degree?

Only because he calls it game theory and he earns money with it doesn't mean it really is game theory in all its implications.
Look as far as you have told me, your "pro" friend assumes that game theory imlies that all players should be treated as an identical person who makes perfect decisions.

That is simply not true and clearly shows that neither you nor your friend have really understood what it is about.

So how about you finally stop to try to teach me about it?

u have a degree? cool story bro.

Well you sure sound like the type of person who would tell a doctor what his diagnosis should be cause you googled your symptons.

and u sound like the kinda guy who tells professionals they're wrong cuz u had a class on the subject.

nope.

I am the person who graduated and who tells uneducated people who base their opion on hearsay that they are talking nonsense.

'k'

UMAD?

no, it doesn't.

It's harder to make money in 100m sprints than in both poker and trading, but that doesn't mean it is more complex.

All this tells me is that you are not following what I am saying.

what do u know about 100m sprint?

also, u seem to be withdrawing ur statement on financing being harder. sup with that?

now, I am not.

The problem is that you still don't understand what I am saying.

I said:

a) The financial market is more complex than poker
b) the players involved are better

That is all I said.

Then you went ahead and assumed, that that must mean it is harder to earn money there.
Even though, I never said that!

And it makes a huge difference.

Unfortunately, you don't even seem to realize that difference, so until you do this discussion is hardly worth continuing.

if the players are better then obv it would be harder to make money.

here is a riddle for you:

Three players a random game for money and in the end the bank takes a $50 fee from the sum they have.

Three players play a different game with harder rules, but a sponsor donates $100 to the pot and there is just $1 fee.

Two questions:
In which game will it probably be easier to earn $10?
Does that allow any deduction at all which game will be more complex or which players will be better?

if the players in the second game are on average much better than you, it doesn't matter if the sponsor threw in an additional 100$ because you won't get to win it. also what exactly is the sponsor analogy?

that's not a riddle, it's a retarded math task with lots of values missing.

lol.

Considering how you would even think that the second question is a math task and not a riddle...

Oh wow.

it is a math question, u just dont know how to formulate it.

hahaha.

oh ur done? k, gg.

Yes, I give up, you won.

At least as long as you are willing to pretend that not understanding is "winning".

right back at ya slick.

ah yes.

You can't answer a question then think it should actually be a math question and all that about a topic where you even admitted that all your knowledge is at best second hand.

And somehow I am the one who doesn't understand it.

Teachers at school must have loved you :P

u can't be this dumb that u don't see the issue can u?

There is no problem, most people can easily answer that question without involving any actual math, beyond knowing that a positive number is higher than a negative number,

The point that you can't and that you also think the question should involve actual math does not make me the dumb person.


Most likely your problem is that you know the answer full fell, but you realized that it shows how you were wrong. So instead of giving you answer you prefer to attack the question.

Three players a random game for money and in the end the bank takes a $50 fee from the sum they have.

Three players play a different game with harder rules, but a sponsor donates $100 to the pot and there is just $1 fee.


Who am i playing against in game 1 / game 2 / how much variance is there in game 1 / game 2 / how long does the game last etc.

are you missing the "probably" when reading the question?

no actually your questions are stupid as fuck tbh.

I played for a some time on one of those "get $50 for free" deals, and managed to come out with a small win when I was allowed to take money out. But I mostly played on the lower tables, so really no expert at all.

This isn't "playing poker", but rather just gambling.

you better fix the financial system! Go to USA and cockslap back to reality those idiots.

Trying to make the world a better place is a pretty low-paying occupation. I prefer to make a living separating idiots from their money. >:]

pff son I am disappoint :/

grow up

suck it Bieber

that has to be one of the best retorts Ive seen in a while, nice! :)

If I understood it perhaps I could come up with one myself.

:@

I also find amusing how some people think reading FT and Bloomberg will make them experts on financial matters. They apply conventional wisdom a long time after it has been priced in and expect to profit from it. Open a practice account or throw a couple hundred bucks at it. Win some, lose some, only tape time matters. If you lose it all, at least you learned something about yourself.

It's been my job for 5 years now ( equity derivatives trader)

some pressure and tough moments but mine, any time

Working for yourself or for a company?

A large french bank

Societe Generale. You must be Jerome Kerviel.

Busted! :D

For people who don't recognize him:
http://en.wikipedia.org/wiki/J%C3%A9r%C3%B4me_Kerviel

;)

almost knew the guy...

I buy some options once and a while. Mostly trying to do a few swing trades but timing the market is ridiculously hard. Have been burned a few times now just because I didn't have enough patience. When the big boys start manipulating and shaking out the weak hands it can get rough. Oh, and don't even think about forex.

I trade shares as a hobby and yes, forex trading is FAR harder and way easier to lose your money.

can someone tell me in simple terms what exact use is this forex thing? does it create extra capital? does it promote economic growth? does it do anything useful, at all?

theoretically, the trade is supposed to sort out market inequalities and give money to companies or countries that are performing well, rewarding them for good efforts, great research, etc. and take from those that are doing badly.

In reality, I personally feel that it has become one giant circle jerk with players (e.g. banks) telling grandmas they need there money for a safe investment only to lose it on the high risk market.

Also, many people just spend all their daily productivity on buying and selling stocks on short notice, nothing campinies can really work with.
All the short trading times force company to watch out for their short-term shareholder value, as opposed to proper long-term investments.

So yeah, just based on personal feeling, I think the overall macroeconomic effect of day trading is below zero. and hurts more than it does good.

Then again, the amount the average private person can throw into the market and take from it is hardly consequential compared to the trillions that are in it.

well I was asking about forex, not the stock market, but thanks for trying. agree on day trading.

first of all forex is a company that wants to make a profit by hosting world wide currency exchange for traders. A such it is a part of the finance world that I described.
People that go there are basically:

a business that has one currency and wants to spend money in another currency now or in the future and doesn't like the rates a bank offers.

or

a person / business that has money and thinks an exchange rate is wrong and try to profit from that, also just profiting from the normal fluctuation in the exchange rates.


So in this case one can argue that makes money conversion more efficient / realistic as it adopts constantly as opposed to fixed daily rates.
Perfect scenario would be just type a business exchanging money between themselves.

On the other hand, people still have to pay forex and the surplus some traders gain has to come from somewhere. Sometimes it's a part of the money that big banks with their daily rates would make, other times it is poor sobs losing their personal money.

The main resuls is that same, it's a lot of time spent without any real production. Because:

The money one business loses a trade with daily rates is the gain for another business, but noone spends a lot of time on that.
In a trade on forex the first business may lose less but therefore the other party gains less, while they both spent more time on producing nothing and paying forex, a company that produces nothing.

So, for each party trading in forex it can be beneficial money-wise. From the macroeconomic part it sucks just like day trading everything else.

so you agree that it has not much purpuse outside certain big players speculating and making money short term. correct me if I'm wrong but currency trading doesn't reflect company success by any means, because guess what it's not about stock but currency. :)

it doesn't rely on any business info (inside or public) whatsoever, just pure speculation and randomness, where if you really want to make money you have to have a shitton of money to begin with, because the exchange rates are measured in 0.01%.

big players can devalue or make certain currency rise in value as they see fit which of course causes herd mentality where everyone goes for the "safe" currency. in the end it just plain sucks balls and is only useful for destabilizing economies. amirite?

Yes, I agree.
While financial risk is big factor for businesses they can be hedged well enough with traditional means, so basically the forex company as such is not needed for the world economy to work.

I wouldn't go far as actually saying destabilizing, though, especially since day traders are not in it for the long run. As soon as a currency becomes unstable they will want a share of the profits, i.e. buying undervalued currency of selling overvalued currency. That way it can actually be a bit of a stabilizing factor.

Forex is among other things a company, but the most general meaning is the foreign currency exchange market.

The foreign currency market is actually a pretty complicated system compared to the stock market. The top tier of forex is the interbank market, where only the biggest financial institutions are allowed to trade, which also makes up the largest portion of the market by volume.

The systems where retail clients are allowed to trade generally isn't the huge forex market in the same way you trade on the stock market. You are essentially trading from the market maker's book. Basically, some private company lists some prices for currencies for you and lets you buy/sell them at the prices it chooses. If there are two clients for the same company that want to buy and sell the same currency at the same time, in theory the actual forex market never receives a transaction.

Forex is a decentralized, over the counter market. It is nothing like the stock market.

Well yes.

But I still maintain that you can put the users into the two groups I mentioned.

a) an entity that has an acutal need for a currency exchange, this could for example be industrial company wants to invest abroad or to change profits back to their own currency, etc. Or it can be a bank needing a foreign currency to satifsy their customer's demands. The list goes on.

Or

b) an entity that doesn't care about which currency it trades and is just happy to make a profit off of (small) imbalances.


Simplified: The need for exchange of group a pays for the (cumulative) profit of group b.

I didn't want to dwelve into the ranting about financial intermediation being the source of all evil, because frankly that's just uneducated bullshit, as you pointed out, "based on your feelings". But I have no desire to get into a long argument about it.

I was just pointing out that your conception of how forex works is wrong.

uhm what? I said not such thing a the "source of all evil", not even close ...


All I said that people who day trade currencies back and forth with the only goal of turning a profit do not produce anything of real value.

Therefore their hours are wasted in the macroeconomic sense.

However, the same is true for people playing poker or lying on the beach, and I wouldn't call that the source of all evil, either.


Maybe you mistook me for mammon?

If I optimize a database you use that lets you do your job twice as fast, have I done any "real work" or have my work hours been wasted? Trading makes financial markets more efficient, which benefits everyone.

The notion that "real work" means that you have to output tangible objects and that everyone should do "real work" belongs in the 19th century.

Trading makes financial markets more efficient, which benefits everyone.

You are arguing as if every single transaction and hour put into day trading makes the process more efficient, which is simply a baseless assumption.

Yes, more flexible trading will offer companies that need to exchange currencies somewhat better rates and therefore less of a loss through transaction. However, that 'loss' goes to a bank or trader, it does not simply disappear from the economy, but can be reinvested in another real project.
Spending more banker's and trader's hours on that very same amount of money does not make it more efficient.


You know, at times like this I can really see the benefit of having both an engineering and a finance education.

What you are, basically, doing from an engineering viewpoint is saying that adding more and more gears between a motor and the wheels will make an engine more efficient. Cause when you simplify the problem that would be true. But what you are really doing is completely ignoring the friction between each step, ignoring that it may even overheat the entire system and make it crash.

Oh and every once in a while a Bernie Madoff comes along, claiming to have invented the perpetuum mobile.

The notion that "real work" means that you have to output tangible objects and that everyone should do "real work" belongs in the 19th century.

That is an incorrect representation of what I said (and therefore the "19th century" an unnecessary insult)

So, to give you the reply you earned: I don't want to discuss this with a "everyone who criticizes finances lives in the 19th century" person. <-- Does that make me sound smart or like I know what I am talking about??

If there are too many hours and resources spent into trading, the profit received from such activity will be too small and people will leave to pursue "real jobs". That's why an effective market kicks ass, it will adjust for any excesses eventually. People just don't like the consequences of those adjustments (i.e. losing their job/savings)

The current crisis has produced a plethora of people who want to add their two cents on a system they don't understand, based on some article they read or documentary they saw, because the media makes finance to be some unnecessary industry, where idiots are paid massive salaries for doing nothing. Judging by what you've written here, I'm inclined to believe that you're one of those people, despite the fact that you should be better informed if you really have a financial education.

And yes, every single trade (not done with the intent of market manipulation) does make the system more effective. More transactions = more liquidity. Liquidity and expected returns are inversely correlated, which you should already know.

Oh well, this turned into quite the rant, well I somewhat enjoyed thinking about it, even though it's doubtful anyone will enjoy reading it :P

diregarding my longer reply, I came up with a better example, while commuting, and i think it does explain my problem with exchanging hours for efficiency:

On a construction site, a stack of bricks need to be moved from one place to another. You can either get a crane on the site to do it inside of four hours, or let your four of your workers do it in the same time.
Now let's say the total price of doing it with a crane is 850€.
Your workers cost you 50€/ hour so it will cost you 800€.

Now, you wil find some mba personel who don't see the big picture and want you to save those 100€, because economically speaking it iss more efficient. The workers earn their salary after all.

But in reality, you workers are tied up with that job instead of doing something that could actually earn your company a profit.

If you disregard all secondary effects (like workers are tired and unhappy through hauling bricks) there is no (direct) difference in pay for the workers.

But the company produces less.

Now, if you replace the company with the concept of welfare economics, specifically ressource allocation, I think the example at very least explains what I mean.

No, your example is incorrect on several levels.

You're trying to argue that somewhere, there are a bunch of people always who know what is the correct valuation, so you could get rid of a lot of unnecessary people.

Even if that were true.. how would you know who to get rid of? And how would you get rid of them through regulatory means? Odds are any measures to reduce the number of people through some sort of rules will make the smart guys leave first, not last.

The finance system and the repercussions of liquidity and valuation are not something that can be analogized the way you are trying to in terms of economic profit and efficiency.
(edit)
The basic reasoning is that more liquidity reduces the cost of capital, the smaller the cost of capital is, the more business is allowed to grow, because financing becomes cheaper and more readily available. Trading increases the possibilities for doing business, not decreases them.


Oh, and I've been meaning to reply to your mammoth post that contains quite some inaccuracies/false beliefs, but I haven't had the time to write out a lengthy and argumented reply.

Hmm, so I was wrong the example wasn't good in explaining what I mean. :(

None of the arguments actually address my example.

You say that noone can know the exact valuation,.agreed.
However, you try to twist that to somehow saying all those hours put into day trading are somehow efficient.
Which you can't for the very reason you just gave: Noone knows that actual value of it.
Because, and that is what my example shows, the trader's profit is not usable for welfare aconomics.


It's fine that you think I have "false beliefs", but I actually think your problem is that you base your opinion too much on the theory and not nearly enough on the reality.
I.e. people with an mba are not the homo economicus, that they would have to be to make most of the theory directly applicable.
Examples: Bankers not understanding the impact of derivates they are structuring, accountants not seeing the negatives implications that saving $50 may have, management ideas that often turn out badly -> global outsourcing.

So yeah, there is no efficient market aas humans will make mistakes. Those mistakes also cause that friction in the engineering example I brought up earlier.

If you have a chain of 10 people to transfer money instead of 2, theory may say it becomes more efficient, while in reality that odds of someone fucking things up, grow a lot.

I feel what will really help you in the future is if you ever start to work on the decision side of business, (as opposed to consulting) I promise you it will be quite the eye-opener for you.
It was for me and everyone I know.

tl,dr: Theory most often ignore the mistakes humans make. While in reality in most jobs having a great idea or solution doesn't change much, the important thing is actually making as few mistakes as possible. (making no mistakes is impossible.)

The marketplace is not a chain, which is where your misunderstanding comes from. The market is more of a seminar group where the result comes from collaboration of different viewpoints and ideas.

Say you have a seminar with a group discussion. One group has 2 people, the other has 10 people. Without knowing anything ex-ante about the qualifications and intelligence of the people, which group is likely to get the best solutions to problems? Which group is more likely to make the least mistakes answering a given set of problems?

And no, you literally have false beliefs. For one, you stated that speculators drive up the prices of oil. Unless we're talking about speculators that physically buy oil and store it in a warehouse somewhere, that is not true and the claim that speculating with futures and forwards drives up market places has never been proven at a satisfactory level. It's just something that the media claims and a thousand people repeat as some dogma.

BTW, there is a link between trading profits and efficiency. You can not make infinite money from a preset number of instruments (as an engineer familiar with the law of energy conservation, you should know this). At 100% efficiency, any new trader entering the market will not be able to make a persistent profit, because there are no errors in valuation to profit from. That's where traders get their profit from, mistakes in security prices. If there's more money to be made in engineering lasers than trading, people will switch from trading to engineering. It's that simple. And while the process is not instantaneous, it is there eventually.

You keep coming back to the claim of "we can eliminate some of the people and links to make the economy more efficient." Great. I already asked you who and on what grounds we should forcibly send back to other jobs. As long as you can't provide a solid answer to that question, your theory is academic masturbation at best, because the problem is unsolvable. Your argumentation is similar to "democracy sucks, because the majority rules over the minority". So yeah, okay, that might even be true, but that system is widely regarded to be the most advanced we have and I haven't heard you suggest any better alternatives. So what's the point?

BTW, the consulting business (as in the company) is mine and I am making the decisions, even though I have no clue as to how that's relevant to this discussion.

And no, you literally have false beliefs. For one, you stated that speculators drive up the prices of oil. Unless we're talking about speculators that physically buy oil and store it in a warehouse somewhere, that is not true

i work in the oil and gas industry, as does my father. My company builds underground gas storage facilities mainly used for securing supply during the winter and also the seasonal price differences. but more and more they are used for *gasp* speculations. The very same thing is done with oil.
Additionally, and apparantly completely unknown to you, most ressources are traded in long term agreements and/or in derivative form. Which are highly susceptible to speculation.

Another example: Three weeks ago a manufacturer for high-pressure valves told me they will have to considerably increase prices, because someone bought out 60 million worth of a production certain steel that they need. AS you might not know this, the means steel that has not yet been produced and therefroe does not need to be stored anywhere. Could be another production company, but 60 million is really peanuts for a bank, who could then expect to resell those production lots for a higher price, cause production companies can't adopt as quickly as a market can.
We have to pay more for those valves and of course forward the bill to our customers, energy companies. They forward the bill to their customers, the people wanting heat and electricity.
Effectively, the people end up paying for the bank's profit. Awesome!


So yeah, why don't you try to actually look away from your books and into the real world for once, instead of calling what I know for a fact "false beliefs"?

Yeah, you're right, you obviously know best and every fund manager, strategist, analyst that I know bases their opinion on stuff they read from books, not real world market experience.


"and apparantly completely unknown to you, most ressources are traded in long term agreements and/or in derivative form. Which are highly susceptible to speculation."

http://en.wikipedia.org/wiki/Price_of_petrole...estigation
"The U.S. Commodity Futures Trading Commission (CFTC) announced "Multiple Energy Market Initiatives" on May 29, 2008. Part 1 is "Expanded International Surveillance Information for Crude Oil Trading." The CFTC announcement stated it has joined with the United Kingdom Financial Services Authority and ICE Futures Europe

...

The interim report by the Interagency Task Force, released in July, found that speculation had not caused significant changes in oil prices and that fundamental supply and demand factors provide the best explanation for the crude oil price increases. The report found that the primary reason for the price increases was that the world economy had expanded at its fastest pace in decades, resulting in substantial increases in the demand for oil, while the oil production grew sluggishly, compounded by production shortfalls in oil-exporting countries.

The report stated that as a result of the imbalance and low price elasticity, very large price increases occurred as the market attempted to balance scarce supply against growing demand, particularly in the last three years. The report forecast that this imbalance would persist in the future, leading to continued upward pressure on oil prices, and that large or rapid movements in oil prices are likely to occur even in the absence of activity by speculators."

I'm sure you can find the original document yourself if you want further reading on the matter.

This will be my last reply to you on the matter, as you have clearly made up your mind that you're right and everyone who disagree are book-worm morons who have no idea what they're talking about.

yeah, how about you ask someone who actually trades gas.

Cause I have, and they will all tell you the very same thing.

I know for a fact, as in I have seen the compressors running that companies were storing gas in February. If you had any actual in-depth knowledge on the topic you would know what that means.
A report from the bush administration is not going to change that.

How exactly would you react if I tried to teach you about tax models in Estonia?

And yet an engineer is trying to lecture a financier how the financial market works.

I am a "Wirtschaftsingenieur", which can be translated to "Master of business and engineering".

So yes, I studied the exact same thing you are still studying. Only that I studied engineering on top of it.

I also work in the very field we are discussing. So excuse me if I have "made up my mind" when discussing that field with someone who doesn't know much about it ...

Business != finance. And that sounds horribly like an MBA degree.

I studied Macroeconomics with Banking and Finance specialization in my BA and am two months away from graduating (pure) Finance as my MA. I'm guessing I have had over 5 times the amount of finance courses that you had. So no, you did not study the exact same thing I am studying.

Working as an engineer installing pumps does not give you any practical expert insight into how financial markets work any more than I am an expert in engineering because I have audited companies that sell industrial machinery.

My university program included that I had to specialize in one engineering field and two business fields. Finances was one of them, so how about you stop trying to tell me what I learned at my university???

Furthermore, you trying to belittle 6 MW compressors as "pumps" clearly shows that you have no fucking idea what you are talking about.
But yes, technically you are correct, simply installing pumps would not give me any insight about the financial side, at all.

However, having a father who was in charge of one company's oil and gas production in Tunisia and one time, who was part of the project team that build the underground gas storage facility in Berlin and who was later in charge of that very facility gives me some knowledge as i talked about such things with him. Working for a company that as buld those underground gas storage facilites gives me more insight.
Optimizing the compressors for their job means I absolutely have to discuss such topics with the traders and their respective engineers. This includes the prices and times for storage. I know how much the average cost for storing gas in a aquifiers and caverns is.

Conversly, you know fuck all about all of this. Most likely you heard the term "aquifier" for the first time in your life. Which is pathetic considering you are attempting to explain the financial side of it to me.

tl;dr:
You should stop trying to tell me what my job is, cause all you are achieving is showing that you are full of shit regarding this topic.


/edit

forgot to add: Two good friends of mine who took the same financial specialization and took the very same lectures (one as a construction engineer and the other as a "financial mathematician") ended up working for banks. so it's really time for you to stop assuming stuff about me, cause I do not think you could be more wrong if you tried.

Yeah, I know nothing fuck all about aquifiers and compressors, fortunately, those things have absolutely fuck all to do with financial markets.

And your argumentation is shit. You still haven't answered me what it is you would change in the current system, even though I have asked you twice.

Oh, and your assumptions about what I do or know are no different from mine. While it is true that I have no firsthand experience with trading commodity futures, I have invested and traded on the market with stocks, bonds and equity derivatives for over 4 years now and I've worked at an investment bank. What's your first-hand experience with actual financial markets, aside from "these couple of guys that I have talked to" ?

Yeah, I know nothing fuck all about aquifiers and compressors, fortunately, those things have absolutely fuck all to do with financial markets.

You might want to read that again.

You admit that you don't know anything about the topic and then do a 180 in that very same sentence and proclaim that you know they have nothing to do with the financial market.

Can you seriously explain to me how you could possible know something about a topic you know nothing about?

I actually wrote my thesis about the life cycle costs of compressor stations for underground gas storage, so i could explain to you in detail how wrong you are and how those costs directly influence the gas price.
But with your attitude that would be a complete waste of time, cause you want to believe that you know better.

Oh, and your assumptions about what I do or know are no different from mine.

wrong again. I never assumed anything about what you did or did not study, because there obviously is no way for me to know that.
Unlike you, who pretends to know what I studied and was wrong.
Again you were trying to tell me something about a topic where anyone can see that you can't possibly know the details.

While it is true that I have no firsthand experience with trading commodity futures, I have invested and traded on the market with stocks, bonds and equity derivatives for over 4 years now and I've worked at an investment bank.

That's great, the problem is that we aren't discussing stocks or bonds at the moment but gas and oil speculation. And you have been very sucessful in showing that while you don't know anything about it you are still convinced you know more about it than someone who works in that field.

Pathetic, really.

The topic wasn't pumps, the topic was about financial market and it's efficiency. Among other things I told you that speculation in oil futures doesn't affect the price of oil, citing a study from the relevant financial supervision organisations of the US and EU.

To which you basically responded "but my father/trader friend told me otherwise so that study is bullshit". Anecdotal evidence does not refute a study made by the people who are experts in market supervision, sorry.

Then you progressed into telling me how you deal with pumps and you know the costs related to oil storage. Great. How does that have any relation whatsoever to financial market efficiency or even the effect of futures trading on oil prices?

Also keep in mind that I never once pretended that I know which fundamental factors affect oil prices or how the oil industry in general works. But yet you start making yourself some sort of expert on a field I never said anything about. Better yet, you claim that I did claim I was an expert on those things. Straw man fallacy.

Remember in all this, your initial problem was with financial markets in general and their efficiency in general and you started cherry-picking the topic of oil trading, ignoring everything else that I said or asked.

And then you say "That's great, the problem is that we aren't discussing stocks or bonds". I have never wanted to discuss oil, you fixated on it completely ignoring everything else that I said. Plus you deny that we were talking about the market in general at the beginning of all this.

To top it off, you try deliberately leave out things said in previous posts:
"why don't you try to actually look away from your books and into the real world for once"
And some posts later:
-"Oh, and your assumptions about what I do or know are no different from mine. "
-"wrong again. I never assumed anything about what you did"

"Additionally, and apparantly completely unknown to you, most ressources are traded in long term agreements and/or in derivative form"
My previous post:
"the claim that speculating with futures and forwards drives up market"


tl;dr
* You attacked a straw man you made yourself
* You ignored most of my argumentation only to focus on meaningless details
* You tried to refute an expert study with anecdotal evidence
* You pretended to have not said things that you have
* And are generally using as much demagogy and manipulation as possible to prove you're not wrong.

Yeah, I'm the one that's really pathetic.

I have never wanted to discuss oil

in that case you should have said so and not give your wrong opinion, which you are still doing.

You can't just state your opinion and then after i reply to it and tell you where you are wrong say that you don't want to discuss it ...


Oh and if you quote try doing is corectly, don't cut of the "study" from this quote in an attempt to look correct "wrong again. I never assumed anything about what you did or did not study"


but the most ridiculous thing is that we start with one specific example, then move to more general terms, the you are the one who brings up market manipulation, I provide an example for it, and now you attack me for cherry picking...
Additionally, after I brought up the example in a one-liner (!) we did not discuss it for a few posts until you bring it up again only to now attack for it ...

then you make a this statement "Unless we're talking about speculators that physically buy oil and store it in a warehouse somewhere, that is not true", I tell you that that is exactly what happens and you don't accept the consequence that you wrote down yourself.

What the fuck?


Oh and since you keep referring to that report, there are many papers hat disagree, e.g. http://www.globalresearch.ca/index.php?context=va&aid=8878
And generally would you rather believe the report from the bush administration or from someone like this: http://www.telegraph.co.uk/finance/newsbysect...ubble.html

"Unless we're talking about speculators that physically buy oil and store it in a warehouse somewhere, that is not true" was meant in the terms that I am aware that physical purchases drive up the price of commodities, as opposed to derivatives deals.

To my knowledge, physical purchases of commodities are a very small minority of commodity speculation. Since this is an impression based on reading some articles, and you're the industry insider, could you perhaps tell me what percentage of the yearly oil consumption is being stored at all times and how much that has changed during the recent period (i.e. how big of a share of annual demand is made up by changes in physical storage). I would also be interested in how much annual worldwide consumption itself has changed in the same period. A period of say, the past 3-5 years?

And of course there are papers that disagree. You can find papers for and against everything. as I'm sure you're aware as someone with a higher education, the question becomes who is more reliable and whose methods are more reliable. A newspaper article about something some guy said (even if he's well known) and a an article from a page that looks like it's from 1993 don't look too credible. But it's a far cry away from "roflcopter derivatives trading certainly affect oil prices"

"Fuck" and "pathetic" don't add any weight to your arguments, by the way.

i know a lot more about gas storage, specifically in Germany, than oil, so I will stick to that.

Here are few numbers.

German storage facilities have enough room for 20 billion standard m³ which is roughly 40% of the annual German gas consumtion.


You need a lot of energy to compress that gas, the biggest compressors I know of are 6 MW machines, that means the use as much energy in one hour as a average four person household in one year.
To make it shorter, the energy cost of one average station (one for each of the 43 sites) is around one million €. Per month.
Of course there are more costs than that.

Regarding the physical storage, your information is inaccurate.

You can rent storage space from the operator companies and if you buy gas through a future or long term agrrement you absolutely have to store that gas. Sure you can also resell that future, but then the buyer has to store the gas.
If you don't store you have to pay a hefty penalty. I was never able to find out the standard conditions for that penalty, but several sources agreed that by rule of thumb it is around a million. Which is way almost all stations are completely redundant in case one machine fails.


That much for the some basic numbers.
Now in the past the rhythm was mostly that gas is stored in the summer and taken out in the winter. But nowadays that periods from withdrawal/storage have come down to sometimes just two weeks. Speculation being the reason.
Now taking the basic numbers I gave you, I think it is quite easy to say how speculation adds to the gas price.


concerning oil, there are also storage facilites, for example in rotterdam. But all the oil is "stored" during transportation for example i tankers and pipelines. Don't know how much of the worlds consumption can be stored in those different ways, but it's not a little.


Regarding the articles, of course you are right that you will often find articles for both sides of the discussion. My point is that yours is the wrong one, because:

You have one report from an administration that is known to have been industry friendly and susceptible to lobbyists.
I have papers that say differently, a statement from one of the world's most sucessful investors, statements from people who actually work for gas trading companies and the knowledge of how the storage process works as well as how the market is set up.

As for the course of the conversation:

I did not start with oil other than giving it a passing mention. I did not try to generalize it after that. You're the one that insisted we talk about that. Look at comments 121 and 122. You singled out one sentence and completely ignored the main part of my post.

What I quoted was irrelevant. My point was to draw your attention to the fact that you have assumed far too much about me, so me returning the favor is not something you can cry wolf over.

First me:

For example, how exactly does it benefit everyone that we pay roughly 10-20% more for oil and gas, simply because of speculations?

One sentence.

Then, four posts later, you reply:

For one, you stated that speculators drive up the prices of oil. Unless we're talking about speculators that physically buy oil and store it in a warehouse somewhere, that is not true and the claim that speculating with futures and forwards drives up market places has never been proven at a satisfactory level. It's just something that the media claims and a thousand people repeat as some dogma.

three sentences.


You first attack me by accusing me of having falses beliefs.
Then I reply to that accusation pointing out that you are wrong. You even admit that you do not know the details of what you are talking about.

Then you attack me for replying to you.


i suppose you would have preferred that I let you attack me without replying to your accusations ...
I'm so sorry.

Edit. I don't give a shit. I'm tired of this nonsensical argument.

I have been and still am pointing that out without changing my actual statement once.
Conversely, you made a correct statement: "Unless we're talking about speculators that physically buy oil and store it in a warehouse somewhere, that is not true" but now don't want to acknowledge it's truth.


Instead, you continues speculation does not add to the price of commodities.
That you can't accept that you were wrong does not in any way mean that you are not wrong.

Just to clarify, I never tried to argue that physical purchases don't affect the price. My point (and the relevant article) was about futures investing/speculation, where you will indeed sell the future to someone who actually needs the underlying asset before you have to take physical delivery, and then you just buy a new future.

well, in that case you might find it interesting to hear that banks like Goldman Sachs and Morgan Stanley actually how oil storage tanks.

Meaning they do not only speculate with futures.

Yes, I am aware of that. But as far as I have been told by bankers, the amount that banks speculate via physical purchases compared to derivatives purchases is quite small.

As an interesting tidbit, at one point during the financial crisis, because of weird futures pricing and very low shipping fees, banks actually rented oil tankers (filled with oil they had physically bought), then let the tankers sit in the middle of the sea for a few months, because the profit via future contango (delivery dates further away are more expensive) was greater than the cost of carry (the cost of renting the tanker for that long).

http://www.cpeterson.org/2011/03/10/why-gas-i...not-libya/

this is exactly the point. in a normal market demand drives the prices. in a clusterfuck of a speculative market today the investment inflow drives the prices. so the more money goes in, the more prices go up. this is not a healthy mechanism.

"My name is Chris Peterson. I think about and work with Internet technologies and how they affect human communication and behavior.

My full time gig is at MIT, where I work on web communications, outreach, and strategy."

So essentially, we have an article from a guy who has nothing to do with finance, very little to do with economics, the article itself is comprised of "proof" that would not be accepted in any economics department in the world. Reading that article is a waste of time and the conclusions are meaningless.

Remember kids, correlation is not equal to causality.

Remember kids, ad hominem is not equal to arguments.

I have neither the time nor the desire to debunk every idiot on the internet, sorry.

oh my mistake, that must be why you wrote fucking essays arguing over things in this very thread.

TL;DR, Matt Taibbi is an idiot.

You have to watch his posts and shut him down before he shifts the argument. Once you've stopped him from changing the subject, or attacking a straw man, he will give up. Otherwise, it's safe to just ignore him. =P

Let's agree to disagree and remain civil in the next argument that considering our personalities is bound to happen eventually?

ok.

You can not make infinite money from a preset number of instruments (as an engineer familiar with the law of energy conservation, you should know this)

I lol'd.
Stop pretending finances are a hard science like physics, unless you want to make a fool out of yourself.

Or can you tell me what the physics equivalent to Basel III is?

"What you are, basically, doing from an engineering viewpoint is saying that adding more and more gears between a motor and the wheels will make an engine more efficient. Cause when you simplify the problem that would be true. But what you are really doing is completely ignoring the friction between each step, ignoring that it may even overheat the entire system and make it crash."

this is the first time I got to the middle of your essay, congratulations.

a bit late, and from my pov.

Forex trading solves one of the main problem for global companies.

Imagine you're Airbus, which
1/ produces airplanes in europe, and as a result has all your costs in EUR (compensations, buy side, etc etc)
2/ sells all your planes in USD, because this is the standard market.

Then, you want to hedge yourself against the EUR/USD moves (in my example, basically against the EUR/USD rising) ==> you trade forex, either by buying some EUR/USD or by trading some more complex stuff like forex derivatives.

Same goes for oil (for oil & gas companies), commodities (for food producers) etc etc

Here lies the need for such a market

don't know whether you are talking about the principle or the actual company.
Because it is not like hedges weren't possible before the internet and neither do they require day trading.
All the current sytem does is reduce the cost of the hedge (a little).

the hedge for the product sold to the company has to be done on a daily basis
that's what I meant

k, I agree with that.

why bother daytrading when you can just load silver on margin and get rich in 3 years doing nothing while the douchebag central bank know it alls print us into hyperinflation.

i did some metatrader expert advisor coding including the genetic algorithm optimization and there is definitely a way of making consistent profits by short term technical analysis based trading in forex. however, i would never trade manually because of the randomness caused by not being able to be in the market 24/5 and plain old human ego.

buying on margin, certainly, if you get a reasonable rate.

But imo silver and gold are quite likely to lose in the nearer future, as the economy is somewhat picking up.

I don't think the economy picking up will affect the prices much. There is finite amount of silver available, most of it has already been mined out and a lot gets irrecoverably used up in the various medical applications it has. The historical ratio to gold has also been a lot lower during the history so you have people actually diversifying to it from gold. Compare that to the constantly increasing amount of debt-money in circulation. No wonder our crooked government put a VAT on it, it is far too available and profitable for the average Joe.

hahaha, reality is a bitch. it went up like 100% in a month so exchanges raised margin on it and now its back down. Anything below 38 is a good buy imo.

Long term investments. eod

+ diversified!

wonder why

as an asset manager maybe, as an individual or company, pretty much doubt it

really depends on your "risk-appetite"

I and I believe vium as well as talking about really long term, like a decade.

Because in the end, when regarding long timeframes, the average stock markets has always performed better than bank accounts and was higher than the inflation. And you have to spend the least time with the topic.

Basically, the old "buy stocks of big companies, put em in a safe and forget about them" approach.

Of course nowadays, with all the mergers and turbulences it is probably wiser to invest in some very conservative fonds, but the basic idea is the same.

yes, all my investments are long term, and I rarely check to see how they are doing, cause its pointless and it just makes me anxious and I then sell at a bad time. 10-20 years to collect profit is a drag, but it works :>

Depends how long of a timeframe we're talking about. In the past century, there have been periods of over a decade where someone that invested a lump sum didn't ear any return whatsoever.

In some cases, it may be a really long time to wait for that "historical average" ;)

Of course, it can take a long time, see vium's post.

But if you don't want to constantly invest time into the matter, still buy stocks and don't trust intermediaries too much (and don'T want to pay their fees) it is is viable choice.

I mean, I think you will agree that if you want to trade stocks yourself and do it somewhat short term, you should better check the stock prices daily.

Following the money sequences is the epitome of unproductive activity, one of the best signs of the sick system we live in.

obviously you don't know what you're talking about.
Nevermind

Its hard to accept what is, when youre giving nothing of value while earning millions, except for people with small brain damage that dont care about other people... YAY for natural selection.

that's the pb: there's some value behind most kind of trading, despite everything that has been said.

I mean, many derivatives or structured products can effeciently protect a company, or answer to asset manager desires, and these derivatives need a day-to-day trading hedge.


From my pov, only high frequency trading (orders being sent and cancelled to the market in only micro seconds or less) doesn't create value for the economy (except for banks ofc ;-) )

"can efficiently protect a company"

See bro? Although I was talking of people you reply about protecting companies. Btw i never said there should be no place for this type of activity in the actual economic system, just that it has become a monster.

companies are people in the end...

Exactly people in the end, profit above all.

I subscribe to the Nassim Taleb school of thought, with the minor caveat of: You make money by insider trading. You lose money by not being an insider. That's pretty much it.

Feel free to throw your money away and blame it on "bad luck" though.

don't agree

with a bit of experience, you can manage to see what's expensive and what's not on the market.

I read once about exploiting the lag between e.g. europe and usa to microtrade by having an automated server in the middle of the ocean.

That's pretty cool I thought. <:

10

11

22

21

and 20, and 10+11+22+21=64

but kooma took #164 x(

They should put up some QL servers there too so we could play the Americans on equal ping.

:3

It's called Iceland.

they be cooking assange now, OMNOM ASSANGE theory

If you are reading this thread, you might find this somewhat related link interesting. I know it's old for those with understanding but it's a good reminder of what kinda absurd world we live and trade in.
http://en.wikipedia.org/wiki/2010_Flash_Crash

I swing trade stocks and I've been doing it for the past 2 years.

However, I'm going long for about 70% of my br in solid large cap stocks and the rest is for diversified trading. I make about 4-5 trades a month and I'm currently in the green.

Ez game.

Don't bother with forex.

Yeah, I haven't touched Forex and don't intend to, it seems far harder to make any kind of psychological evaluation for Forex while that's working fine for me for shares. I've been using a combination of investing in inherently solid and undervalued shares with responses to short term movements based on news items (just the bleeding obvious ones).

buy some gold instead m8,
world economy is going down soon ...
the cheap countrys from asis/latin-america have a great impact on economy ... in the end the lifestandard of the working people from the west have to be equalized to the lifestandard of the asian/latin-america ... there will still be people working, but the money will only be sufficient for the survival ... besides some electric toys (which are made of plastic and silicon and are very cheap to produce) there won't be that much people will have ... there won't be any real goods ... when this state is reached economy will reach its dead end ...
and the sole purpose of money will be to keep warm the fireplace ...

Gold is a horrible long-term investment because it's not really an industrial commodity (at least that's not why it costs so much) and does not generate any additional value. Besides, when Joe Blows everywhere start talking about investing into an asset, it's generally a good sign that you should sell, not buy.

what is better than gold?

platinum

but why does fort knox store so much gold?

Actually I've gone one better than that as I own a bit of a gold mine at the moment. =)

How is the gold purchasing working out for you cx

Cxe cpm community favorite

Well, then poorly. Tech did better but I fairly rapidly learned it's better not to trade unless you're going to approach it at a professional level and if you're going to do that then why aren't you working in the City?

if you bought gold back then, you would be better of now ...
inflation eats up all your money and global economical crisis is very likely to come next year ... just the fact that a bitcoin is worth 700 $ should make you wary of this money system ... go back 50 years, normal workers could buy houses then and feed their housewife and family ... nowadays an academic as sole earner cant to do that ... although everything became much cheaper with better technology, globalization, etc. ... the normal working class is being ripped off and the fun thing is productity has risen now to at least 300-400 % compared to back then ... and instead of working a 20 hours week, people are working even longer compared to back then about 45-50 hours nowadays, and social standards are at the same time lowered, isnt it all ridiculous? And you cant get out of the rat race as a normal working person or you are out of business

Lloyds are down due to the PPI repayments, whereas common sense would dictate that such a massive bank (and given what's happened) will inevitably return to an upward trajectory. That kinda investment?

The amount of shit I've read in this thread is unreal, I don't understand why some of you look at money so negatively. Gotta fix your mindset about it.

Starting with the trading is not difficult but you'll need someone who can mentor you, learning on your own is always going to be a costly adventure.

I'd probably say mess with stocks when you've got some extra bank.

Here's a simple scenario for you.

If you gave me £5 and I gave you £10 in return, how many times would you repeat that transaction?
Unlimited times right?

If you're looking into building a long term passive/recurring business that's scales incredibly easy, I'd look into the whole ecommerce hype with Shopify. It's massive and I'm using it to casually make between £100-£200 profit daily on 4 niche specific items. I really only touch it now to fulfill the orders and that takes about 1-2 hours worth of work.

So far I've managed to create a buyers Email list of 10 000+ customers which I can directly market through, build trust and use that to leverage social media's - It's traffic on demand.

I'm definitely going to be building up some extra bank on the side and dabble with day trading in the future.

All about the multiple streams of income - fuck the 9-5 grind. Looking to get rid of that shit by August 2017

Expect a call from Jamerio.

I'm alright m89 q:D

In it for long term etc. All about the hustle yo.

you drop shipping or dealing with it physically?

drop shipping is more convenient right now, until I started to do branded items and hook up with amazon FBA.

https://www.reddit.com/r/thatHappened/

https://www.reddit.com/r/thatHappened/

can't believe someone's comparing a 100% rng game like poker to something serious as trading.

I assume you meant insider trading, because that is what its all about

exactly this

to be fair, stock trading is also RNG if you dont have insider info

It's not.

Just because you say so, doesn't mean Its true.

http://money.usnews.com/investing/articles/20...-investors
A year-end study by S&P Dow Jones Indices found that "over the 10-year investment horizon, 82.14 percent of large-cap managers, 87.61 percent of mid-cap managers, and 88.42 percent of small-cap managers failed to outperform (their index benchmarks) on a relative basis."

So called experts losing almost 90% of the time. I suppose anyone could beat index funds 10% of the time.

Market trading is a lottery if you play by the rules. A fucking cat can beat market experts:
http://www.forbes.com/sites/frederickallen/20...k-picking/

Read more at: https://en.m.wikipedia.org/wiki/Random_walk_hypothesis and https://en.m.wikipedia.org/wiki/Efficient-market_hypothesis

It's still not rng as you make it out to be.