Altruistic traders - why?

[notouch 10]

Here's an issue I was pondering because this forum is full of helpful traders (including myself at times). Why would any trader help another trader? Futures trading is a zero sum game which means if you help other traders it's going to make it more difficult for you to make profit. The guy you helped may be on the other side of your trade taking your money the next day. I thought maybe it's just our natural inclination to help others we feel we can relate to (altruism) but then how is it altruistic to help one trader make money off of another trader? My conclusion was that it's similar to the old story of the lion with the thorn in his paw. We're hoping that if we help someone out today, that person will be helping us out another day.

[walterw 10]

Not exactly Notouch... if 100 traders would do what you do still they will not hurt your bussiness (markets are too big)... even most probably they will help you (more liquidity on your side)....

 

Posting is a way of teaching... and when you teach you are the first to learn more, it is a process that helps you put out what you have inside and its dificult for yourself to understand, when you start sharing, it starts to get more clear to you what before was unclear...

 

On the other hand when interaction starts, you see that your followers start to show you things you would never see, and grow thanks to their inputs...

 

Collaboration its a great way to grow... and yes you have to be some how generous... but obviously you will be the most benefited...

 

Some years ago a man/God said : "it is more blessed to give than to receive"... cheers Walter.

[thetradingdoctor 10]

There are two schools ( probably more!) of thought about this. For my part, I have had a trading partner for the past 10 years. I like trading with this person and I trust him. Others like to trade in large ( or small) trading groups, as it gives them a sense of belonging and helps with the isolation that so many traders feel. Trading really can be a lonely profession and many are cut out to go it alone. For the others, there is something that feels good about working with one or more people that you can trust, sharing ideas and making money. Whatever works best for you in terms of being consistently profitable is, in my opinion, the best way for you. Each of us finds his or her own way in the markets. If you are going to get a partner or partners, make your choices carefully.

 

Thanks!

Doctor Janice

[TinGull 10]

I just think it's good ethics to help, no matter what the circumstances.

[Guest cooter]

Ethics aside, it's also good business sense to help out like-minded people. You never know when you'll need their help. When everyone prospers, you will too.

[Soultrader 12]

I agree, there is so much to learn through sharing and receiving feedback. You constantly want to improve yourself when you are put in a situation of helping and sharing.

[notouch 10]

I don't believe it's good ethics because you're just helping one trader take profits from another trader. The other points I agree with. We help others to help ourselves. We learn and grow from helping others. Discussing set-ups and strategies helps clarify things in your own mind and you learn new things from others.

[TinGull 10]

"Helping" is what Im talking about. In anything. I dont care what the matter at hand is. If you think about it, whenever you're helping someone, you're always helping them get an advantage over someone else, aren't you? If you're a teacher at a cooking school...you're helping students get a job that someone else who didn't go to the school might not be able to get.

 

My point is, helping is good, no matter what. If you don't feel that helping is the right thing to do, then so be it. You just won't be the kind of person I would ever want to converse with.

[notouch 10]

Geez man relax. A lot of your posts seems to be personal attacks against me.

[Guest cooter]

Geez man relax. A lot of your posts seems to be personal attacks against me.

 

Is there a Doctor in the House to mediate this?

 

LOL

[TinGull 10]

I didn't mean for it to sound as an attack against you. I just used the word "you" where I should have used the word "someone". If someone doesn't feel that helping is a good thing, then I wouldn't want to converse with them as thats not the kind of person I like to be around.

 

Sorry if it came across that way...

[thetradingdoctor 10]

You have to do what works for you. If you think it is not helping to help other traders take money from other traders, then don't do it. If you think it is helping, then do it. No two people have the same ethics, values or morals. No two people think alike, especially in the area of trading. It is important to remember that trading is a game with very high stakes. This is why emotions run so high. There are those who believe that they should not help anyone else, that they are an island unto themselves and that all they need to do is to take other peoples money before those people take their money. There are those who will tell you that this is "wrong" and that it is our responsibility to "give back" and share knowledge with others so that we can help them learn and trade. There is no right answer and no wrong answer to this issue. It is highly personal. Each of us must find our own way in the markets, just as in life.

 

Thanks!

Janice

[GCB 10]

The desire to help and especially to feel we have something to offer others is part of human nature. This is why the veteran quarterback will mentor the rookie, not just because the coach tells him to, but because he wants to, even though he knows he might be helping the rookie take his job.

 

There is also a need in most of us for camraderie and feeling we are part of a team. When you work with other traders that need is somewhat met. It makes us feel good.

 

The idea that by helping others you are potentially hurting yourself is sort of like worrying you are going to kill your lawn by pulling up a few weeds. In other words, it's very unlikely. Oh, if you have some super-innovative trading scheme you might want to keep it to yourself. But which of us really has such a thing? Most of us are using things everyone has known about for years.

 

Let's suppose you write a book about trading and from that book 1000 people become a better traders than you. Is that measly 1000 people going to effect the market to the detriment of your trading. Not in the least. Plus, for that 1000, 100,000 will try trading and fail.

 

If someone has the gift for trading and is meant to trade I'd rather be the one who helped them along on their path. Their success can't hurt me.

[notouch 10]

I think you hit the nail on the head GCB. We do it just because it makes us feel good. People tend to contribute to "feel good" charities with a human face more than they contribute to charities like medical research that do more long term good to those who need it. Likewise it makes a trader feel good to see that he has helped out someone he can relate to (a fellow trader).

 

Imagine being a large trader who runs stops and generally makes money from 'cheating' other traders. That's all part of the game but I wonder if it makes them feel good.

[thetradingdoctor 10]

There are millions of people trading the markets. We trade the markets to make money. In order to make money, you take it from someone else who is less experienced or less lucky than you are. This is something which people do not often think about, since they are so focused on the making of money. Where does the money you make come from? Where does the money you lose go to? Whom does it come from and whom does it go it?

 

You will read of many traders who actually do think about where it comes from and have periods of remorse or discontent about it. I think that they have to find a way to overcome those feelings as they are likely to cause some inhibition or hesitation in their trading. When you think about it, it is a sad and vicious game. Yet, it is the way of the natural world, where the strong survive and the weak perish. This is rather heavy food for thought and a poignant and powerful topic. Thank you for starting this topic and for giving everyone something to think about.

 

Janice

[torero 10]

I agree. Lots of people seem to be skeptical with the "gee, why is he helping me? what's in it for him?" As long as there is no money or favors involved, then the help is genuine. I think there is always an ulterior motive, but the one I can think of is in the end, teaching others your method or belief reinforces them into yourself, making them stronger, in the end, help you become a better trader of your own method. Not sure if anyone understands that, but it does for me. I complete agree with what Walterw says above because I perceive the same way when helping others.

[Guest cooter]

Greed is good. And if everyone succeeds, that's better in the long run.

 

But Janice is correct. It is a zero-sum game at the end of the day.

 

Someone, somewhere has to be on the losing end of your winning trade.

 

I don't mind helping; but I do hate spoon-feeding folks.

 

If people can't bother at least doing their own legwork or homework to help themselves, why in the heck should I help them?

[thetradingdoctor 10]

Helping people makes us feel good. At some level, we are all hardwired to help. In life and trading, it is important to take personal responsibility for what you say, do and think. If you are thinking about helping another trader, you may be well served by first examining and your motives. Be honest with yourself and speak the truth to yourself. Once you do that, you can speak the truth to others. Integrity and being authenticity begin from within and spread outward.

 

Thanks!

 

Janice

[GCB 10]

Probably another reason traders like to help other traders is to counter the ruthless feeling that the so-called "zero-sum-game" principle (which I think is a fallacy and a canard) brings in. If we help others we perhaps are attempting to assuage the feeling that we are taking advantage of others.

 

But the feeling we are taking advantage of others is unjustified. When you get right down to it, trading is not much different that any other market. We sold our house in California and a year later it was valued at $100,000 more than we sold it for. Did the person that bought it "take" that money from us? Not in the least. If the market had crashed would we have been taking money from him? No. That's just the market. Nobody really knows what's going to happen. Which is why no one is taking anything from anyone.

 

You might say that a house's value couldn't go to zero. Ask the couple in Dallas whose house had to be leveled because of incompetent exterminators. Or ask people whose houses were in the path of Katrina. Futures contracts rarely go to zero anyway, and I'm sure they do less often than houses do.

 

The fact is the world needs trading. Traders narrow spreads and keeps prices honest. Futures markets need speculators to take the other side of trades from hedgers. Speculators serve the purpose of assuming risk, which adds to financial stability. Thus they need to be rewarded handsomely when they do it well, or no one would do it at all and financial markets would suffer greatly.

 

Trading is even mentioned positively in the Bible by Jesus himself*.

 

* “For [the kingdom of heaven] is just like a man about to go on a journey, who called his own slaves and entrusted his possessions to them. To one he gave five talents [a unit of money], to another, two, and to another, one, each according to his own ability; and he went on his journey. Immediately the one who had received the five talents went and traded with them, and gained five more talents. ... Now after a long time the master of those slaves came and settled accounts with them. The one who had received the five talents came up and brought five more talents, saying, 'Master, you entrusted five talents to me. See, I have gained five more talents.' His master said to him, 'Well done, good and faithful slave!' Matthew 25:14-16, 19-21

[rolange 10]

Futures markets need speculators to take the other side of trades from hedgers. Speculators serve the purpose of assuming risk, which adds to financial stability. /QUOTE]

 

This is a fundamental truth that a suprisingly large number of traders are unaware of.

 

Once this is understood then the 50% retrace suddenly has a whole new meaning.

 

As for Jesus trading I'm not so sure. Reckon he had better things to do

[thetradingdoctor 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

[Nick1984 10]

I initially joined this forum with a limited knowledge of trading derived from jumping into the stock markets. I only just started trading futures and its a different experience and I'm only keeping my head afloat at the moment while I iron out kinks in my strategy. I believe that the majority of people which join the forum and don't contribute by way of posting just use the posts here as an educational tool.

 

I don't have any problem with someone else wanting to learn, and by teaching someone else I believe that you not only have to be objective about your own learning but that you will learn more as well at the same time.

 

While there is always going to be a disparity in the levels of experience that traders here have, the one thing that binds the forum together is that everyone no matter how well they are doing wants to keep on learning.

 

I asked myself often: Why would James put up his videos showing his entry and exit techniques; why would he offer this forum as a learning tool to so many people?

 

The answer that I came up with was that, James is putting his own cards down on the table so to speak and he is holding himself accountable to thousands of people he's never even met who can critisise him for his techniques, so therefore he is receiving back not just giving.

 

I might not have been as technical in all of my posts as some of the other experienced traders here, but when I have posted something serious, I try to be as helpfull as possible.

 

As to the doc's question: I think a speculator is simply someone who takes a position in a market with no underlying interst beforehand based upon a set of supposed facts which they believe will arrive at a pre-determied outcome which they aim to profit off.

[Guest cooter]

In this regard, I would like to how from each of you: what is your definition of a speculator?

 

One who speculates!

 

Actually, it's one who gambles or takes risk. You wouldn't be speculating if there was no downside risk involved for your future positive return on investment (ROI).

 

All traders are speculator, by definition, whether they choose to acknowledge the definition or otherwise.

 

Just my two ticks worth....

[GCB 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

 

I have a pretty broad definition. A speculator is anyone who buys (sells) anything with the sole intention of selling (buying) it later at a profit. A speculator assumes risk to obtain the possibility of profit.

 

 

BTW, Another reason traders offer information is as a motivation to organize and be thorough about their own study. John Carter and my personal mentor both put out newsletters and both have said doing it is one way to force themselves to do their homework.

[walterw 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

 

A speculator is a Human bean... all humans speculate... be it on trading or any other human enterprise... Risk is embeded on human existance and speculation is dealing with it...