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Can successful Traders have a conscience?

Can successful Traders have a conscience  

7 members have voted

  1. 1. Can successful Traders have a conscience

    • Yes
      4
    • No
      2
    • Not Sure
      1


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This is a very interesting question, and not one which I have seen mentioned.

 

Can successful Traders have a conscience?

 

When a Trader is in working mode, I do not think that they can afford to have a real conscience, and also be successful. To have a conscience is to deal on emotion.

 

A good Trader will only see a commodity, not the investment itself. They are always dealing on trends / fundamentals, and have no feelings for or against the underlying investment.

 

E.g. they would have no problem dealing in Tobacco or Gambling stocks, to name but a few.

 

I believe that you could give a Trader a number of graphs, and not even price them, or say what they are, and they could make their mind up about a possible trade.

 

What do you think?

 

OBVIOUSLY THIS ONLY APPLIES TO LEGAL INVESTMENTS

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I dont really think that a successful trader can have a conscience.

 

The best traders seem to deal on cold hard information, and not have "favourite" areas of investment.

 

Take "Black Monday" in the UK, when George Soros took on the Bank of England and won. He knew that the facts did not stack up with the reality and gambled on a change in policy by the UK Government. He was right, and he made a fortune.........

 

He dealt on cold hard information, with no guilt about what he was taking away from the Bank of England. A real Trader!!!

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This is a bit of a loaded question, as to me the comments thus far seem to suggest that a professional trader suffers from a lack of ethics and I simply do not subscribe to that theory at all.

 

I also do not subscribe to the theory that successful traders are emotionless automatons when trading either. There is not a trader alive who is totally emotionless in the heat of trading. The difference is that he or she has learned how to both notice their emotions and control them. There was a study done of professional traders recently, by a prestigious university, that fully supports that belief, despite the common myth to the contrary which most often circulates amongst traders.

 

Also, supposedly everyone has a conscience and although I am certain that includes traders, there are undoubtedly some who choose on occasion not to be guided by what their conscience is telling them. That however is perhaps best left for a spirited discussion about ethics.

 

Happy Trading ;)

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Interesting but hard topic to answer. Traders by nature are very aggressive and thick-skinned. That does not necessarily mean we suffer from a lack of ethics or values.

 

Yes, I am sure you will find unethical traders such as the Enron traders who found it entertaining to shut off California's electrical power. (so they can profit from rising electricity prices)

 

I also saw an interview of a commodity floor trader in the CBOT who made a fortune on 9/11 trading gold. Is this unethical?

 

On the other hand take a look at Warren Buffett who just donated $30.7 billion to the Bill and Melinda Gates Foundation. (respect to that man!)

 

I think it would be wrong to judge the entire trading population as unethical people. Just like any profession you are going to find ethical and unethical people.

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I agree Soul.

 

There are undoubtedly some actions taken by certain parties that members of the general public might find in bad taste or even unconscionable, yet you will often find those self same people who were so quick to judge others taking similar actions on their own that they quickly excuse away as acceptable. There is just no accounting for the way some people treat other people. Their interpretation of the Golden Rule is that those who have the gold make the rules. That is indeed a shame, but a reality of Life nevertheless. Luckily, we don't have to become one of them in order to become and remain a professional trader.

 

Happy Trading ;)

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Sorry if I have been a little misunderstood.

 

I am not trying to say that all traders have no ethics or values, just pointing out (like Soultrader said) that traders tend to be more thick skinned than most.

 

Its like the traders who sell airlines short after a crash - now I would not do that, but I know some traders who would. That opens another issue, if nobody acts on bad news then we risk a false market - after all the market is only a reflection of supply and demand.

 

Some people see gambling and tobacco stocks as unethical, but personally that would not stop me trading in these stocks.

 

I hope thats clears up any misunderstanding?

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Its like the traders who sell airlines short after a crash - now I would not do that, but I know some traders who would.

 

I hope this does not make me unethical but I would disagree with that statement. We have become traders to profit from market inefficiency's. I say this because as a trader, I am looking for opportunities in the financial markets. If a trader can not short a stock because one feels unethical, I find it hard to make any money in the market.

 

Your profit is another man's loss. Is that considered unethical? I do not think it is fair to say traders are unethical since they would short an airline stock that just had an accident. (or other examples) We are trading supply and demand or numbers. When I trade stocks or futures, 80% of the time I do not watch the news. I just trade price action. I will find out any siginificant news on the market after the close.

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Trading in general is amoral (setting aside hostile takeovers, pillaging companies, stock scams and the rest). You buy from people that want to sell, and you sell to those that want to buy. Your actions have no impact on the company.

 

If you want to hold stocks for longer terms and don't want to get all icky by associating with tobacco, for example, then remember that shares tend to be a net loss to companies as they pay out dividends. The money raised from a public offering is a one-time affair, and after that the shares just drain money. By holding shares, you are taking money away from a company you don't like. Maybe that eases your conscience. (Of course no one cares who holds these shares and you know someone will, so we come back around to trading being amoral :) )

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As a simple addition: if you're so magically, supernaturally good as a trader that you know the stock will drop, then by shorting, you are depriving someone from their potential profits. So if you think you're God, you shouldn't trade.

 

Speaking personally, if you think you're God, I would like you to trade. To ease your conscience, why not tell me what you're trading so I can take the other side.

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Some interesting comments, and maybe not the poll vote I had expected.

 

There appears to be some difference of opinion as to what may or may not be ethical, but no matter what we think, the market will always react to different situations and the "true" price will always show through.

 

I think a good trader will just see a situation as that, and not think of the underlying reasons / factors. Follow the Trend has been my main rule since I began trading (with the odd exception of trying to catch a fallng knife), whatever that trend may be.

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Only in the right context. Virtually all business endeavors are based on the notion of providing value, and the profits are the exchange for that value delivered.

 

Gambling and trading do not create or provide value to the one putting in the money. It's a win-lose situation and winner's profits have to come from somebody's pocket. Even the Casinos express their profits in gambler's losses and trading is very analogous.

 

If you're okay with the competitive nature and the fact that it is clear to the prospective loser that he is risking his money on a wager, then no guilt is due.

 

However, if one of your core beliefs is that you wish to make the world a better place by provide value to others, then trading may present a subconscious challenge, as your subconscious knows the win-lose scenario exists here.

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Colorado

 

I think you just hit the nail in the head. I cound't agree more with your coments.

 

It's unbelievable but there's still some traders/investors outhere who believes that shorting a stock is totally un-american. Sometimes I watch comedy central, you know in order to entretain my self, and this guy....whats his name/ oh ok..Jim Kramer always is buy, bullish, etc. It's unelievable how many people calls that program for advice...oh boy..This is just my opinion please apologize if I offended anyone.

 

Regards

 

Raul

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I am so sorry

 

It's not comedy central...it's CNBC.

 

for some reason I don't understand, I mix CNBC, Comedy Central and Cartoon Network. Maybe there's some sort of subliminal message implanted in my brain, well I don't know. They're not similar rigth??

 

My apologies

 

Regards

 

Raul

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One can inject ones views, beliefs and concerns into trading as much or as little as one wants. eg, only long on your countries stocks, only short on opposing countries stocks and futures, no purchases of suspect stocks etc etc.

 

No problem; only two issues. 1. Don't actively trade the beliefs just use them as a filter to remove trading opportunities. 2. Recognize that the beliefs limit some opportunities which may occasionally cause frustration followed by the satisfaction that you're sticking to your beliefs (but the opportunities are nearly infinite anyway).

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I am so sorry

 

It's not comedy central...it's CNBC.

 

for some reason I don't understand, I mix CNBC, Comedy Central and Cartoon Network. Maybe there's some sort of subliminal message implanted in my brain, well I don't know. They're not similar rigth??

 

My apologies

 

Regards

 

Raul

 

lol.... we might as well have Dave Chapelle come on CNBC.

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CNBC is Comedy Central LOL! Freudian slip it may be but many ways similarities are uncanny. These "comedians" make us laugh with their "recommedations" one after another and they are out on the line trying to forecast and predict. Worst, the hot fund managers make their money on fees, not from their stock pick wizardry. I prefer to see floor traders whose livelihood depends on their trading. Charts tell me more quickly and honestly than some talking head tooting their own horns and their picks.

 

I used to avidly watched their shows that result in losses before I turned it off and turned a profit. My opinions of their performance was in some ways linked to my past performance: recommendations don't work without your own homework involved.

 

Sorry, back to the question at hand, the rules were set for most. Some started trade without knowing the rules but this is what free enterprise is: as long as you don't break the rules, the world is yours if you can outsmart your competitor to get customers to your door. Some chose to be ignorant and trade until ruin while others go slowly and learn all the rules then trade to become profitable. Most of us chose the ignorant way (I included) but everyone is accountable for their actions to participate or not and their way in participating. So conscience shouldn't exist because the rule applies to everyone and ignorance is no excuse (as cops like to remind infractors of this). I paid my dues.

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I am a good and successful trader and i don't buy the crap you are saying. I have got a good conscience and i trade well. They have nothing to do with each other. Your conscience don't in any way affect your trade.

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