A Question...

[MrPaul 10]

....Does the growth in the number of users taking up electronic trading systems reflect that more people are becoming increasingly knowledgeable in studying financial market behavior and are therefore accessing trading platforms to execute well-planned investment decisions? Or is the technology the advent of a sophisticated gaming medium that is excused and justified as a display place of "investment" opportunity?...

 

 

What do you think? Why?

 

 

 

excerpt from "The Psychology of Electronic Trading"

[TinGull 10]

I dont think the number of new online accounts and the number of knowledgeable people working those new accounts go hand in hand...I do think that with so much electronic trading it is bringing a lot of bright people to the game, but more than that there's a lot of people with false hopes. I think that's the majority of it. The surge in electronic trading is bringing in a lot of fresh money into the markets for the seasoned pros to take advantage of, and then those youngin's don't have a lot left afterwards and end up quitting...just like always.

 

So....I guess I take door number 2?

[Soultrader 12]

I also think that new traders tend to jump in a bull market. Alot of young professionals participated during the stock market bubble but most of them are all gone now.

 

Regardless, successful trading takes time and patience. Those who survive are the ones that have gained experience and the knowledge to trade. You will always find the new and clueless traders hoping to make that quick buck and going home with nothing but a wild and reckless story. It's the same with any game you play.

[torero 10]

I think throughout the decades since the beginning of century, new technologies bring in new players along with bull and bear markets. People come in with bull markets, then blow in bear markets. Some never come back, some stayed and make a living. But one common denominator is the human behavior factor: our nature has not changed in centuries and trading requires the survivors to do the most unnatural things to succeed.

 

The famous 5%-95% ratio (if it's true) remains constant so long as human nature don't change. It's no wonder chart pattern and price action in old charts look the same as they are now. If you look at dotcom bubbles, it's not the first bubble and won't be the last. History repeats itself because ... we're humans!!!

 

So technology won't change human nature. It may make it easier for us to trade but prevent us from screwing up the trades. Even with system trading, believe it or not, human intervention is very common (yep, dang human nature must have its hand in everything).

[Reaver 10]

I think that more and more people are simply falling victim to the new wave of marketing in the "get rich quick and easy" series. I don't think people are necessarily becoming more knowledgable about the markets, etc. (especially when even the ones that go obtain "knowledge" before entering the arena are being filled with a bunch of bs marketing garbage). I currently work in the revenue department of a large financial institution, and I have noticed alot of new attention being drawn to personal finance from large companies. For instance, the big rave right now is "check your FICO" or your "Beacon Score" from Equifax. It's just a big thing to get people to increase their debt and increase revenue for the banks, etc. I think this is very similar. The focus on trading and everything I believe is a way to generate income for hucksters peddling their snake oil, etc and brokers to increase commissions. This is all just my opinion of course, but I don't neccessarily think the quality of market knowledge is being increased per se. Back in the good old days, at least people had to do alot of legwork to really research and learn (not that I would know that from personal experience or anything) but nowadays it seems the sheer volume of knowledge and availability can increase the chances of "analysis paralysis" if anything. Sorry to ramble. I hope what I said made at least some sense. ha ha

[torero 10]

Reaver, you nailed it: more information can only distort the truth about the markets. So, the obstacles can only get higher, the learning curve can only increase with more and more indicators (supposedly TS itself has 2000 indicators), methods, strategies, auto systems, instruments, markets. Back to basics is the only method that works.

[MrPaul 10]

People come in with bull markets, then blow in bear markets. Some never come back, some stayed and make a living.

 

...but more than that there's a lot of people with false hopes. I think that's the majority of it.

 

You will always find the new and clueless traders hoping to make that quick buck and going home with nothing but a wild and reckless story.

 

I think that more and more people are simply falling victim to the new wave of marketing in the "get rich quick and easy" series. I don't think people are necessarily becoming more knowledgable about the markets, etc.

 

These are my sentiments exactly.

[Kiwi 16]

Its not bad that more people try or that more people fail.

 

Out of those potential failures will come the smaller number that succeed

[Reaver 10]

Yeah it's hard at first to separate the wheat from the chaff. Not knowing anything about the markets at all makes it easy to believe that there are some secvrets, etc to making it rich. I'm glad I used my brain when I got started and realized that there is no shortcut. I'm still learning, but then again, so is everyone. This forum makes an excellent sounding board and reality check for those caught in the mix of all the bs, etc out there.

[Reaver 10]

It's easy to get picked off by huckster marketers and scammers when you're new to the game, simply because you don't know any better. Kind of like a stranger giving a kid candy, same principle. I really think this forum serves as an excellent reality check and sounding board for those that would otherwise be surrounded by all the garbage out there.

[mohsinqureshii 10]

Its not bad that more people try or that more people fail.

 

Out of those potential failures will come the smaller number that succeed

 

The success and the failure of any trader is just because of himself - if he has chooses the right strategy he might have not lost. 99.9 % traders loose because of their own wrong strategy which Involves they emotions , greed etc.

[BlueHorseshoe 10]

I think that more and more people are simply falling victim to the new wave of marketing in the "get rich quick and easy" series.

 

I agree. The other day I pulled down an old chart pattern trading book from my shelves - Curtis Arnold's PPS - trading system. At the back was a wallet in which an old diskette must once have slotted. The whole thing just seemed so incredibly dated compared to the slick online marketeers of today - how many John Carter wannabes are out there now? Hundreds.

 

Personally I wouldn't be suprised to see a new wave of marketing around algorithmic trading systems arising. Yes, I know that these have been a possibility for retail traders for a good while, but I don't think they've fully come of age yet. One of the platforms was advertising on Bloomberg the other day with a slogan of 'where robots are traders' with the promise of users being able to give simple english language instructions to build a strategy. Now why did I ever bother learning EL or Java (or B.A.S.I.C. back in 1992)!?!?

 

As well as being a very real potential way to make money, simple algorithmic trading is also a marketeer's dream for lazy traders. Having said which, so is the ego gratification of discretionary trading . . . That's enough from me, I think.

[Obsidian 10]

...The surge in electronic trading is bringing in a lot of fresh money into the markets for the seasoned pros to take advantage of, and then those youngin's don't have a lot left afterwards and end up quitting...just like always...

 

Absolutely right...

 

People are trying to choose the easiest way to make money but at the end they are losing what they have...this will not change until they understand that trading is a concept that requires knowledge and experience...

 

Big sharks are sharing their profit with EA programmers (web scammers) now :rofl: