What it means to be a "Trader"...Fact;
- The top 3 Hedge Fund managers, in excess of +11,000% net lifetime earnings, have no more than 3 trades, total, constituting >85% of their total, life-time earnings.
- Every last one of the top life-time earners ("Trading Legends") - in excess of +11 000% (eleven thousand percent net return(!!) - have made their fortunes in
Commodities and FX. (Soros, Druckenmiller, Jones, Lewis, Kwane, Trout, the Richies, etc.)
No stocks / equities / or similar dog sh#&t! - None, nada, zero!
Now, most morons attribute the above facts to the "power of leverage". Are you friggin kidding me?! That is absolute nonsense!
In what universe does "leverage", in itself, contribute to trading success??...
But if you want "fast money", know this;
Commodities and Forex have real hedgers and therefore it is a positive sum game for speculators.
Whereas stocks?... It is the same idiots trying to make money ripping each other off. It is truly a zero sum game, a pyramid scheme.
To make any money on any of those bags of odorous excrement (20x, 100x, 200x earnings) one would have to not only hold them for years but also *** be right about the trade ***!
Otherwise what?...
Are you going to hold the bag on some dog crap for 5 years, at a time, just to learn that you were wrong?! Is that the plan?...
At the same time a Commodity or a Forex trade will provide you with the "meat of the move" in days, weeks or a couple of months, max.
You will at least know, right or wrong, about the trade's prospects, aeons before some garbage stock trader ends up holding the bag for the better part of his natural life.
Traders are like snipers; They sit in wait for the right moment and are there for one, singular, solitary reason: For the kill!
No more, no less. Whatever it takes.
What Traders are not;
A) Traders are not "investors";
B) Traders are not "scalpers", nor "grinders";
C) Traders do not exist to "forgive", to "let off the hook" or to "give back".
Traders have zero problem to tear you from limb-to-limb and to eat your still beating heart in the front of you, as you watch. - And all that before ever breaking a sweat.
... because anything short of that is a loosing proposition! E.g. "trading" is not a forgiving business so you better be right!
Man (as in: The Species) has two (2) fundamental and overwhelming driving forces: Fear & Greed. (Man is also territorial! E.g. trading is not a team sport.)
Every time you enter a position you are taking on massive risks. That is the name of the game: The buying and selling of risk.
Thus, being careful and selective is much regarded as in good form.
Here is what you are up against;
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- In 2019 the 5 major FX Dealers have booked $147 Billion US in profits;
- Top life-time earners, between 1980-2010, made: +11 000% (eleven thousand) - Total;
- Top earners between 2010-2020 are currently earning: +3000% (three thousand) Annually(!!);
- A typical, top FX Dealer (UBS) has ~210 traders, working in 3 shifts, 24/5;
- A top FX Trader clears $6-$13 Million in bonuses, annually;
- The average Trade Portfolio size (per trading floor) is $4.7 Billion US;
- The average dealer risk limit per $100 Million is 3.5 pips.
In short, these people do not get up every morning to let you take their Rolls Royces or to have their wife leave them because they can no longer afford the private schools for their children.
They do not go to the office, day after day, to let you load your $50, $500, $5 Million, in the correct market direction, with nice tight stops, for you to sleep easy because little risk is involved.
No Sir!
Put yourself in their shoes! They must buy when you want to sell and vice versa.
So when you spot that big, one-way move... So do they! - But they have no choice in the matter because that is what dealers must do - e.g. the opposite of what you have decided. So how could they ever make money?
Simply, by taking that nice, tidy, one-way, mega move and shove it back up where the sun don't shine, as often as possible, all along the way. It is simple as that.
So the next time you sit down in the front of the computer to make a trade just remember who is on the other side of that screen.
Ergo, you better be ready - by whatever means - to do the same thing to them as they are sure to be about to do it to you!
"... and when you see it, you bet the farm!" - Stanley Druckenmiller
