Altruistic traders - why?

[notouch 10]

The CFTC makes a very specific distinction between speculators and non-speculators (commercials). Going by that a speculator is just an entity (not necessarily a human being) without any commercial interest in the underlying instrument. The speculator's only interest is in making a profit from a favourable price movement. A hedger is the exact opposite and hopes to lock in profit regardless of the price movement. I think most people speculate at some stage in life, for example by buying a house in the hope that prices will increase. The difference is that traders speculate for a living.

[walterw 10]

Apart of trading I am on the construction bussiness... we build houses and sell them... its especulative and risky as trading... I think the best thing is to be diversified... cheers Walter.

[momentom 10]

Its a matter of concience, I believe.

 

Anyone who is profitable has had help along the way. Helping others is just giving something back. I don't think that the giver gets anything out of it except perhaps a good feeling. At least this is why I try and help.

[dalby 10]

i have been helped out by others, so i like to reciprocate. i also appreciate DIALOGUE.

 

certainly, i am not going to reveal individual setups. i worked too hard to develop them and would only release same to a client. i respect that many others do the same, feel the same.

 

that is not to say that i have not been greatly helped by free advice etc. which often is worth MUCH more than you pay for it

 

the signal/noise ratio is higher here than any other forum i have found on the internet, ESPECIALLY for index futures stuff.

[BlowFish 10]

I guess I am a terrible cynic but I think the reason anyone does anything is essentially selfish. There is nothing wrong with being selfish imo. Put another way people do things for others because it makes them feel good. Or as has been said they hope to learn something through the exchange (self interest). Or they just want to 'show off' (look at me aren't I clever). I think even when we do things for our children or loved ones it is because when they feel good we feel good (so a selfish action even if for another). Even when we do things out of a sense of responsibility or guilt it is to assuage feelings within ourselves.

 

btw Isn't a speculator simply someone that assumes risk for a potential reward. Not quite sure how that fits in (yet).

 

Personally I always wanted to be hugely succesful at trading (10's or even 100's of millions). Apart from satisfying my Ego I'd really like to make a big difference in the world (money affords that opportunity). The reason? to make me feel good. (Who wouldn't feel good about improving society?) Personally I see no conflict between altruism and selfishness.

[GCB 10]

A speculator is a Human bean...

 

Well then, "Como esta frijole?" I.e. "How have you beeeeen?"

[walterw 10]

Well then, "Como esta frijole?" I.e. "How have you beeeeen?"

 

jejeje I dont know how to spell that...

[thetradingdoctor 10]

I rarely recommend books, but "Atlas Shrugged" by Ayn Rand is, in my opinion, one of the best books a trader can read. In addition to the so-called Hymn About Money, there are some wonderful passages related to the reasons that we trade. If you are interested, I can provide to James the text of The Hymn to Money by Ayn Rand. Please let me know?

 

There is a virtue to selfishess. Why is that? Each of us has only so much energy. We use this energy to give to others. IF we do not take time to restore energy to ourselves, we become as dead batteries and have little or nothing to give to others. This is part of a delicate balance of life. First, we must keep ourselves intact and boost our own energy. This may be seen as selfishness. However, in its most human form, it is a way of storing and preserving our energy so that we can give it to people in need. There is more than this, however. It is a question of to whom we give. If we give to those who continue to sap our energies and give us back nothing in return, we become energy-depleted and then have to go store up so some more energy. If we give to those who return energy to us, even in small quantities, we have a give and take situation which renews us and adds some energy value to us.

 

One of the challenges in the markets and in life is to find people( life) and positions (market) that do not take our energy. In other words, there are drawdowns in life and drawdowns in the markets. Both depete our capital. Capital is financial, mental, emotional, physical and spiritual.

 

What can we do about this? Stay with what is working. Stay with the people and the positions that are enriching you, that appreciate you and that give back to you. Remove yourself from capital drawdowns, both in the markets and in life. This is sooooo difficult to do, and there can be much pain associated with it. However, once you get going, it is extremely freeing. You feel lighter, more energized, renewed and appreciated.

 

Thanks for the great posts! You guys rock!

 

Janice

[Guest cooter]

Here's a link to Ayn Rand's Hymn to Money.

 

Enjoy.

[dalby 10]

blowfish, you have reiterated what classical philosophers refer to as the concept of "egoistical hedonism".

[walterw 10]

Thanks Cooter for your generosity.... and Doc for such great input there, this thread rocks ¡¡¡ very great edge on this inputs Doc... I think I will start to consider even this topic on some personall issues I am going thru... great inputs ¡¡ thanks again... and thanks again... Walter.

[BlowFish 10]

blowfish, you have reiterated what classical philosophers refer to as the concept of "egoistical hedonism".

 

Ahh OK I guess I am a bit of a 'closet bar room' philosopher. While I would never assume that my thoughts where original I am a little surprised to find that there is a 'school of thought'. Whether this adds credibility (or indeed diminishes it) I am not sure. It seems reasonable from my own observations.

 

Anyway thanks for pointing that out time to head over to Wikipedia to check these guys out I guess.

[thetradingdoctor 10]

Thank you all for this great discussion and for your inputs. This thread is as much about trading as it is about being authentic and human. I welcome all comments as they are an opportunity for us to be in our integrity and speak our truth to ourselves and others. Every great trader gets to the point where they look in the mirror and realize that everything and everyone they are is right in front of them. It is all about having the courage to be radically honest with yourself. From all, everything good in life follows because you are walking a path of integrative evolution. This is how great traders become great and stay that way.

 

All ideas and thoughts are welcome here, and I reach out to each of you with unconditional positive regard. Kindness is the greatest gift we give to each other and to ourselves.

 

Thanks!

 

Doctor Janice

[notouch 10]

I like what you say about energy, Janice. I find it important to surround myself with positive energy and to keep negative energy away from me whilst trading. The good thing about being part of a trading community like this is that we can draw from the positive energy of each other. Helping others and seeing others help others and being helped ourselves are all things that give us positive energy which puts us in a better frame of mind for the emotionally draining world of trading.

[PYenner 10]

Doc

"Remove yourself from capital drawdowns, both in the markets and in life."

Never a truer (or sadder?) word spoken, hard but necessary, particularly when it is family.

 

The 90% failure rate is the biggest obstacle I see to altruism.

In one sense your help might shift that balance a little, but when dealing with individuals there is the apprehension that you may likely help them to fail.

 

Thats the bit that bugs me.

You can say "they didn't have what it takes" but once you become involved you cannot fully step aside from the consequences.

 

Helping a capable person improve would be good, but that leaves 90% who will not make it. I don't have an answer for that.

[Nick1984 10]

I would like to take this opportunity to offer out cyber cookies to all. Let the good vibes spread!

 

 

Talking about vibes: one of the best feel good movies ever is this low budget Australian flic called "The Castle" I love it. If you can find it watch it!

[notouch 10]

I agree PYenner. Sometimes you have to be cruel to be kind. With 90% of traders blowing their accounts, when you see some totally clueless newbie asking questions I don't think you're helping them by giving them false hope.

[torero 10]

I agree that you can do your best to advise and help but it's finally each person's own burden to take the advice and carry it out to succeed. Failure comes from not following their own rules, not because the books and forums didn't give the right answer. We give what we can but nothing can be done after it's imparted. Some will find let in and absorb the advice and change accordingly to merge with the markets' expectations. We also fail and fail again despite knowing all the rules and remind ourselves not to do it again. 90% fail because they cannot meet such high expectations of themselves.

[MrPaul 10]

This is an interesting discussion as it brings up the issue of how traders are classified. There is a taxonomy of traders, much like the taxonomies in the animal kingdom. In this regard, I would like to how from each of you: what is your definition of a speculator?

 

Thanks

 

Janice

 

Good question, My best response could be summed up as such...

 

A speculator is someone who is willing assume market price risk by purchasing or selling an asset in expectation of excersizing a profit from the net difference after the transaction is completed.

 

I should note that a speculator is different from a hedger, spread trader, arbitrager etc. And is very different than a gambler.

[Guest cooter]

 

I should note that a speculator ... is very different than a gambler.

 

How so, MrPaul?

[MrPaul 10]

How so, MrPaul?

 

Well the short answer to that would be a Gambler engages in a game or activity in which outcome of that activity depends partially or totally upon chance. aka There is typically no statistical edge involved in the process of gambling. Like a state lottery or bingo.

 

A speculator will typically act on some sort of statistical edge and engage not blind chance, but in the probability of the situation at hand.

 

Now I know that these examples open up a can of worms due to the fact that there is a major difference between an amatuer speculator, a professional speculator, a gambler that plays for fun and a gambler who engages gambling in the capacity of a professional speculator.

[mp_trader 10]

Well the short answer to that would be a Gambler engages in a game or activity in which outcome of that activity depends partially or totally upon chance. aka There is typically no statistical edge involved in the process of gambling. Like a state lottery or bingo.

 

A speculator will typically act on some sort of statistical edge and engage not blind chance, but in the probability of the situation at hand.

 

Now I know that these examples open up a can of worms due to the fact that there is a major difference between an amatuer speculator, a professional speculator, a gambler that plays for fun and a gambler who engages gambling in the capacity of a professional speculator.

 

As a semi-professional poker player, I consider a gambler as one who participates in an activity in which the outcome is based entirely upon chance. Having a long term statistical edge over most players in the game I played, I referred to my playing - somewhat euphemistically - as a series of very short term investments. I guess you could call me a professional speculator.

 

I have found a couple similarities between poker and trading; both can require a "tuition" nearly equal in time and money to that of a traditional degree, and both require a couple years to determine one's actual success. The latter point is not discussed nearly enough in the trading books I've read.

[thetradingdoctor 10]

Anyone who trades the markets is likely well served by understanding their microstructure. While the book can be tedious and not totally transparent at times, I think we can all be served by having a look at Trading Exchanges by Larry Harris. It provides an interesting taxonomy of trading types. It is a large book and expensive ( somewhere aroung $US60), so this type of book purchase is not to be taken lightly and only for serious traders who want this type of in-depth understanding of market microstructure. You don't need it to make money! I can assure you of that. What is does is put the various players in the market into some kind of interesting perspective.

 

Hope this helps a bit!

 

Janice

[Guest cooter]

Indeed, it does help - thanks for sharing, Janice.

 

In fact, here's an early draft of Prof Harris' tome for everyone reading pleasure.

 

http://www-rcf.usc.edu/%7Elharris/Trading/Book/Book-extract.pdf

 

Enjoy!

 

P.S. More info about Prof Harris can be found here:

 

Professor Larry Harris's USC Home Page

[The Bear 10]

How so, MrPaul?

 

In my opinion casino/card gamblers are not speculators...but most speculators are gamblers.