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Nextek

Why are people attracted to trading?

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“Trading provides one of the last great frontiers of opportunity in our economy. It is one of the very few ways in which an individual can start with a relatively small bankroll and actually become a multimillionaire. Of course, only a handful of individuals succeed in turning this feat, but at least that opportunity exists.”

- Jack D. Schwager, Market Wizards

 

For anyone who has started up their own venture or put money into a project in which they hoped to see a return you know, Entrepreneurship is about working hard now, to reap the benefits later.

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  zdo said:
Precisely!

Gaming is around the circle or table pretend trading. Instead of outcomes being determined by the global mkt, chance is conveniently substituted. The flow of play and strategies involved for each game of 'gaming' is limited to recreating certain real life market and trading situations. The games of 'gaming' one enjoys and is competent at can tell a lot about what style of trading he should go toward etc...

Professional gamblers are actually not gamblers at all. They are traders adept at on the fly assesment of probabilities, other gamers, and sizing decisions... these days particularily, the level of skill and the individual's intrinsic rewards of that middle proficiency, reading others, determines whether or not they play at the tables or at the screen

 

I think that you are right about 'professional gamblers' here. I do think though that it depends on your interpretation of the word and your perception of reality.

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  Rande Howell said:
Some come to love the game. It's like a puzzle. And as they unravel it, they discover it is really a puzzle about themselves and their relationships with others. For the most of traders, the thinking that got them into trading are not the thinking that will bring them success in trading. They have to fundamentally change the way they preceive and react to the world in the microcosm of trading.

 

Rande Howell

 

Nice post.

 

I think these are the people that spend many years futures trading, and I agree that it this case it does take on a deeper meaning as any 5+ year endeavor does... if you spend a significant amount of time and energy that'll give you as high of highs and as low of lows as futures trading does then I think it'd be impossible to keep it from reaching somewhere into your soul.

 

But I think this doesn't apply entirely to why people are initially attracted to it, as 90% of people who try out futures trading are the ones who do not come to love it and fail relatively quickly. So I guess it depends on whether the OP meant why people were attracted to trading after or before they had experienced the lowest of the lows and the highest of the highs :)

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  samanthasing said:
Nice post.

 

I think these are the people that spend many years futures trading, and I agree that it this case it does take on a deeper meaning as any 5+ year endeavor does... if you spend a significant amount of time and energy that'll give you as high of highs and as low of lows as futures trading does then I think it'd be impossible to keep it from reaching somewhere into your soul.

 

But I think this doesn't apply entirely to why people are initially attracted to it, as 90% of people who try out futures trading are the ones who do not come to love it and fail relatively quickly. So I guess it depends on whether the OP meant why people were attracted to trading after or before they had experienced the lowest of the lows and the highest of the highs :)

 

No doubt people are seduced by the sirens of easy money and an easy life. All the things that feed into our culture's notion of success (and retirement). But just like the folks who retire to Florida after grinding out a life of work, believing they have paid their dues on the good life, the actualilial (MSP) tables show that they are dead in 5 years. Having given up on purpose driven life, they die. People inherently have to find a passion in their lives. What I look for when I'm interviewing prospective clients is whether they have this passion for trading. Passion enough that they are willing to change so that they can re-organize themselves because of their love for the game.

 

Rande Howell

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People are attracted to trading because of the competitive nature and the thrill of the uncertainty.

 

There's a unique satisfaction in taking a stand against the population at large (as indicated by current price), then being RIGHT when others are wrong. This is independent of the financial gain.

 

Additionally, studies have shown that risk seeking, aggressive traders tend to outperform, and this profile of trader tends to be the type that enjoys the fluctuations of fate.

 

Lastly, for people who ARE primarily in it for profit motive, capital markets are less size constrained that most ventures (i.e. if you had 50million in capital to deploy, you COULD do so if desired -- a characteristic that is not true for many other risk markets)

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  Rande Howell said:
No doubt people are seduced by the sirens of easy money and an easy life. All the things that feed into our culture's notion of success (and retirement). But just like the folks who retire to Florida after grinding out a life of work, believing they have paid their dues on the good life, the actualilial (MSP) tables show that they are dead in 5 years. Having given up on purpose driven life, they die. People inherently have to find a passion in their lives. What I look for when I'm interviewing prospective clients is whether they have this passion for trading. Passion enough that they are willing to change so that they can re-organize themselves because of their love for the game.

 

Rande Howell

 

Rande,

 

Can you please post a link to the actuarial tables that show the life span of a retiree in Florida?

 

MM

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perhaps the retirees 'retiirement plan' was not well thought out.the change in role compounded with possible worries over health and financial issues. all this stress could contribute to a shorter life span.

 

i retired at 55 and began a very active lifestyle...surrounding myself with great friends i love.. couple that with no financial worries due to income from stock trading.....

it doesn't get much better than that!

peter.

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  StevenSJC said:
I'm surpised the lifespan is 5 years of a retiree in Florida. I don't buy it.

 

Have you ever seen them drive there?

 

If you are a retiree and are not used to seeing college girls in bikinis, and struggle with the concept of not being able to do anything about it, perhaps we could argue that 5 years is a long time for plaque to completely block a continuously constricted artery and make one fade from existence.

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  peterjerome said:

i retired at 55 and began a very active lifestyle...surrounding myself with great friends i love.. couple that with no financial worries due to income from stock trading.....

it doesn't get much better than that!

peter.

 

I can't speak for you or anyone else Peter, but it seems as though many of the baby boomer age folks spent their lives working in a job that they really didn't feel a strong passion for. Now that they are retiring and have built up a small fortune over the years, they have the time, and the money to do the things that they really enjoy and feel strongly about.

 

College grads these days value living life for today and taking "mini retirements" along the way, not saving everything till when we're 65, social security, medicare, and medicare are not something to depend on for the 20 somethings of today.

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  MightyMouse said:
Rande,

 

Can you please post a link to the actuarial tables that show the life span of a retiree in Florida?

 

MM

 

MM

It has been many years since I read that. If you look at the tax structure and estate taxes of Florida (and FA's rigoroous enforcement of 6 months residency), you'll get the picture. They get separated from family and other sources of meaning and move to the march to the sea.

 

Good call on you part.

 

Rande Howell

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  TimRacette said:
I can't speak for you or anyone else Peter, but it seems as though many of the baby boomer age folks spent their lives working in a job that they really didn't feel a strong passion for. Now that they are retiring and have built up a small fortune over the years, they have the time, and the money to do the things that they really enjoy and feel strongly about.

 

College grads these days value living life for today and taking "mini retirements" along the way, not saving everything till when we're 65, social security, medicare, and medicare are not something to depend on for the 20 somethings of today.

 

They did jobs they have a strong passion for? How about they got paid for doing nothing and set up socialized retiree benefits for themselves to the detriment of generation upon generation of our youth. Sure they went to work, but they did not produce. There is a major major difference. They voted for and agreed to every major spending increase and war that got us to where we are. They have a small fortune because the glorious fed increasing the money supply and forced prices higher. They have a small fortune and left the younger generations holding the bag. I personally think that instead of sticking the bill to those who are still working and the children who are not working yet, that we should stick the bill back to them for the social services they set up and expect for themselves. They want them, they can pay for them. Make tho old shits go flip burgers or something or increase the tax rate for those over 65.

 

They want pity? Go break your bones producing and paying for the things you want and then I'll give you pity. Until then they are just leaches. They should be called the shameful generation.

 

In America you need to produce to survive. Am I pissed? Bet you ass I am pissed. I can pay all my expenses for a year with what I have to pay in tax and I do not get shit for it.

 

Sorry Tim

 

MM

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you blokes think the US has it bad....look at Europe....the Germans are paying for the retirement and spending policies for Greece, Portugal, Italy. etc;

One of the great things a past government in Australia did was force superannuation (basically a self funded pension system) on us.....mainly as most people are too lazy/incompetent/cant be assed/ selfish/living in the moment to save money for themselves. So sometimes the governments get it right (not often :))

Even if the returns are not great - its something.

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  TimRacette said:
...but it seems as though many of the baby boomer age folks spent their lives working in a job that they really didn't feel a strong passion for...

 

MM,

 

Might wanna stop and read a little closer next time.

 

-Tim

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  SIUYA said:
you blokes think the US has it bad....look at Europe....the Germans are paying for the retirement and spending policies for Greece, Portugal, Italy. etc;

One of the great things a past government in Australia did was force superannuation (basically a self funded pension system) on us.....mainly as most people are too lazy/incompetent/cant be assed/ selfish/living in the moment to save money for themselves. So sometimes the governments get it right (not often :))

Even if the returns are not great - its something.

 

Our Social Security Admin was supposed provide benefits for retirees and that won't likely be around much past 2035 or so or whatever the new blow out date is. Everyone in the US pays about 15.5% of their pay into SS. Each employee only sees half of it come out of his paycheck, but the company he works for pays SS the other half and lowers the employees pay by the same amount. Most people do not know this and won't accept it because they forget that a corporation's main function is to turn a profit. Tax is cost that gets passed along to someone. either the consumer or the employee.

 

By 2020 or so we will have 100 million people over age 65 on social security and there will be about 120 million working and paying into it. Does it sound like it has a chance of surviving?

 

SS began as a benefit. It was actually tax free like an insurance benefit in the beginning and now it is taxed. But when you are forced to pay or get arrested and go to jail it isn't a benefit it's a tax..It was set up at a time when fewer people lived beyond age 65. In the end it was a way for the government to get the people to fund government debt and an inefficient way to create about 60,000 jobs.

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  Rande Howell said:
No doubt people are seduced by the sirens of easy money and an easy life. All the things that feed into our culture's notion of success (and retirement). But just like the folks who retire to Florida after grinding out a life of work, believing they have paid their dues on the good life, the actualilial (MSP) tables show that they are dead in 5 years. Having given up on purpose driven life, they die.

 

Rande Howell

 

Quite a lot of assumptions there, Rande - "easy money ... easy life ... success ... the good life ... "

 

My own reasons for becoming a trader are very far removed from that. Life's circumstances and my own altruism led me to the financial wilderness - never bankrupt, but living hand-to-mouth basically. I discovered that at the age of 54 I had no hope of retiring from salaried work.

 

I realised I needed to find something that would ease the transition from my profession to a self-funded retirement, as I would one day be naturally unable to continue with my current salaried situation.

 

I knew before I got too far into this, that it would take time ... maybe three years I thought, but it has taken me until now to get it together ... 7 years later! I am a slow learner, it seems, but once I do learn, I have it for life!

 

Just another perspective - a trader not after the "easy life" or decadence ... but involved intentionally as a means to self-fund some kind of life after being unable to participate any longer in mainstream employment.

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Just as athletes run the gamut from the weekend warrior (who flames out) to the serious professional, traders run the gamut from the naive novice (who flames out) to the serious professional. Weekend warriors have different motivations than professionals, and so it is with trading. The get-rich-quick crowd does not define trading any more than the amateur enthusiast defines sports. Which side are you on? We've had an interesting dialogue about being attracted to trading; now let's refocus the same energy on being successful at trading!

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  Ingot54 said:
Quite a lot of assumptions there, Rande - "easy money ... easy life ... success ... the good life ... "

 

My own reasons for becoming a trader are very far removed from that. Life's circumstances and my own altruism led me to the financial wilderness - never bankrupt, but living hand-to-mouth basically. I discovered that at the age of 54 I had no hope of retiring from salaried work.

 

I realised I needed to find something that would ease the transition from my profession to a self-funded retirement, as I would one day be naturally unable to continue with my current salaried situation.

 

I knew before I got too far into this, that it would take time ... maybe three years I thought, but it has taken me until now to get it together ... 7 years later! I am a slow learner, it seems, but once I do learn, I have it for life!

 

Just another perspective - a trader not after the "easy life" or decadence ... but involved intentionally as a means to self-fund some kind of life after being unable to participate any longer in mainstream employment.

 

Taken out of context, anybody's message can be distorted. For the vast majority of people I work with, they seek to serve a purpose greater than themselves in their trading. Most frequently it is their families. And they are still seduced by the sirens of the song that many brokers and educators sing about trading. They get in, and they discover that there is a lot more to trading than they initially thought. Hopefully by this time they have developed a passion for trading and will give them the motivation to make the inward changes that allow for a successful trader to be developed. As Einstein quipped -- the order of thinking that got you into the problem is not the order of thinkiing that will get you out of the problem. The person you are that gets into trading is rarely the person that will bring success in trading. The person has to change, adapt, and reinvent themselves.

 

Rande Howell

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  Rande Howell said:
Taken out of context, anybody's message can be distorted. For the vast majority of people I work with, they seek to serve a purpose greater than themselves in their trading. Most frequently it is their families. And they are still seduced by the sirens of the song that many brokers and educators sing about trading. They get in, and they discover that there is a lot more to trading than they initially thought. Hopefully by this time they have developed a passion for trading and will give them the motivation to make the inward changes that allow for a successful trader to be developed. As Einstein quipped -- the order of thinking that got you into the problem is not the order of thinkiing that will get you out of the problem. The person you are that gets into trading is rarely the person that will bring success in trading. The person has to change, adapt, and reinvent themselves.

 

Rande Howell

 

 

I quite agree Rande.

 

Curiously enough, success from ventures in a previous life can slow down success at trading to a remarkable degree.

Perhaps it is because we tend to view successful behaviour in it's entirety, rather than being the sum of the parts.

 

Coming into trading from previous business success's really requires a complete audit of skills ... the applicable few are keep and polished and the others such as people skills are parked to one side.

 

That is why I regard trading more like a professional one man sport [golf for instance] rather than a business.

 

I know this flies in the face of popular opinion, but so be it....

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Yes, solo professional athletes and traders can have much in common. I was a trader back in the mid-nineties, and even then I thought that traders who succeed to a high degree must eventually acquire a certain amount in common with martial artists. But not the typical ones; the martial arts I am thinking of are the ones which flow with the incoming dynamic energy, instead of resisting it. Like Ba Gua, Tai-chi ( a very effective martial art in the right hands), Aikido, Systema, etc. All of these require enormous self discipline and self control, and emphasize the ability to sense both external and internal energy, and flow with it like water. You are alone in this warfare, and you must not let Fear get the best of you. A certain level of calm awareness, confidence, and even a lack of excessive thought. Instead, highly trained instincts take over, and the incoming energy is Mastered.

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  johnw said:
I quite agree Rande.

 

Curiously enough, success from ventures in a previous life can slow down success at trading to a remarkable degree.

Perhaps it is because we tend to view successful behaviour in it's entirety, rather than being the sum of the parts.

 

Coming into trading from previous business success's really requires a complete audit of skills ... the applicable few are keep and polished and the others such as people skills are parked to one side.

 

That is why I regard trading more like a professional one man sport [golf for instance] rather than a business.

 

I know this flies in the face of popular opinion, but so be it....

 

I believe you make an important distinction here. And, if you don't mind, I think I will start using it to describe the evolution of a trader. A one man sport is much like performance in trading. You quickly discover you can be you own worst enemy or you can be your best friend. Really requires an audit. Businesses fail at about the same rate as traders fail. It is the psychological skills that you develop in the running of the business that drive the business model. And in trading an alpha male psychological type forments a disastrous trading experience. The two skill sets are very different. You don't take and dominate in trading as you might in business. Type A needs to tone down to see the markets and self from a different perspective.

 

Rande Howell

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Gold’s Outlook – Uptrend may continue, but US jobs data could trigger profit-taking. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. 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    • Date: 31st March 2025.   Trump Confirms Tariffs on All Countries, Sending Stocks Lower.   The NASDAQ continues to trade lower due to the US confirming the latest tariffs will be on all countries. In addition to this, bearish volatility also is largely due to the higher inflation data from Friday. The NASDAQ declines to its lowest price since September 11th 2024. Core PCE Price Index - Inflation Increases Again! The PCE Price Index read 2.5% aligning with expert forecasts not triggering any alarm bells. However, the Core PCE Price Index rose from 0.3% to 0.4% MoM and from 2.7% to 2.8% YoY, signalling growing inflationary pressure. This increases the likelihood that the Federal Reserve will maintain elevated interest rates for an extended period. The NASDAQ fell 2.60% due to the higher inflation reading which is known to pressure the stock market due to pressure on consumer demand and a more hawkish Federal Reserve. Boston Fed President Susan Collins recently commented that tariffs could drive up inflation, though the long-term impact remains uncertain. She told journalists that a short-term spike is the most probable outcome but believes the current pause in monetary policy adjustments is appropriate given the prevailing uncertainties. Although, certain investment banks such as JP Morgan actually believe the Federal Reserve will be forced into cutting rates. This is due to expectations that the economy will struggle under the new trade policy. For example, JP Morgan expects the Federal Reserve to delay rate cuts but will quickly cut towards the end of 2025. Market Risk Appetite Takes a Hit! A big factor for the day is the drop in the risk appetite of investors. This can be seen from the VIX which is up almost 6%, Gold which is trading 1.30% higher and the Japanese Yen which is the day’s best performing currency. Most safe haven assets, bar the US Dollar, increase in value. It is also worth noting that all indices are decreasing in value during this morning's Asian session with the Nikkei225 and NASDAQ witnessing the strongest decline. Previously the stock market rose in value as investors heard rumours that tariffs would only be on certain countries. This bullish swing occurred between March 14th and 25th. Over the weekend, President Donald Trump indicated that the upcoming tariffs would apply to all countries, not just those with the largest trade imbalances with the US. NASDAQ - Technical Analysis In terms of technical analysis, the NASDAQ continues to obtain indications that sellers control the price action. The price opens on a bearish price gap measuring 0.30% and trades below all Moving Averages on all timeframes. The NASDAQ also trades below the VWAP and almost 100% of the most influential components (stocks) are declining in value.     The next significant support level is at $18,313, and the resistance level stands at $20,367.95. Key Takeaway Points: NASDAQ falls to its lowest since September 2024 as the US confirms tariffs on all countries, adding to inflation concerns. Core PCE inflation rises to 0.4% MoM and 2.8% YoY, increasing the likelihood of prolonged high interest rates. Investor risk appetite drops as VIX jumps 6%, gold gains 1.3%, and safe-haven assets outperform. NASDAQ shows strong bearish momentum, trading below key technical levels with support at $18,313 and resistance at $20,367.95. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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