Comments on: Why Is Trading So Difficult? - Reason #1

by: invest4ff

Sun, 06 Apr 2008 17:23:18 +0000

Good post! I am a NYSE day trader and I have always lose money because I did not do enough homework.
Just for your information, I just started a carnival on Equity Trading. For more information, please visit:
http://invest4ff.blogspot.com/2008/04/carnival-of-equity-trading.html

If you are interested, please join blogcarnival and submit your entry to:
http://blogcarnival.com/bc/cprof_3971.html

Thanks.

by: Brett

Sat, 05 Apr 2008 20:57:41 +0000

Hi Babak,

This is only true of daytraders, particularly those at prop firms. It is not at all true of bank traders at prop desks or portfolio managers at hedge funds. They see the time in between trades as when the real work of analysis, sythesis, and understanding take place. So, for them, the not-trading parts are not boring at all. They love figuring out markets. It’s the daytraders who find inaction to be boring, because (by nature for the most part), they are inactive conceptually. If someone views inaction as boring, they won’t find the harmonious blend you write about. They’re wired wrong.

Brett

by: Holly

Fri, 04 Apr 2008 01:36:19 +0000

Oh my God, you are so right–I only wish I had read this 4 years ago, then I wouldn’t lose so much capital. What you said is exactly what I’ve learned during the past 4 years. Now I’d say I’m a baby cheetah who is still learning how to be more efficient, how to catch the most with a minimum energy…I love trading and have fun doing it, so I’m sure I’ll be a real cheetah soon…thanks a lot, you must be a brillient one already.

by: Prospectus

Fri, 04 Apr 2008 00:59:09 +0000

Babak,

Excellent post. I am an overspent cheetah, trying to hit anything close to me at the time. Looking forward to the next in the series.

by: John Forman

Thu, 03 Apr 2008 21:26:40 +0000

No worries. I work with a lot of new and developing traders, and have found that being specific is VERY important. You can’t make ANY assumptions because they have this tendency to take everything literally.

by: Babak

Thu, 03 Apr 2008 19:29:40 +0000

John,
yes, you’re right. I should have written that it much more relevant to intra-day trading but then I thought that was obvious.

by: John Forman

Thu, 03 Apr 2008 14:38:39 +0000

Very nice post. I only have one little argument. You say:

“In reality, trading consists of long bouts of (near) boredom, interspersed with spikes of adrenalin induced action. This makes trading extremely demanding, physically, emotionally and intellectually.”

I think this applies much more directly to short-term traders and much less to longer-term ones. Generally, the more frequenly you have to make those trading decisions the more demanding it will be, and vice versa.

I trade in several timeframes. When it’s more the position stuff that I hold for weeks things are quite relaxed.