10 years ago
in a congressional hearing on day trading in US
a report concluded that “a growing number of people are giving up their existing careers or withdrawing their savings to become full-time professional day traders.”
concurrent investigations were launched...............
..........all of these investigations expressed concerns
about the potentially deceptive advertising practices employed by day trading firms.
as a result of these investigations, the NYSE and NASD adopted rules
that required day trading firms to make a determination
that day trading is appropriate for a particular customer.
--
Senin, 28 Februari 2011
do day traders make money?
do regular day traders perform better than occasional day traders?
= analysis indicates that regular day traders perform better than occasional day traders, though neither group is able to earn sufficient profits to cover transaction costs.
--
do day traders with past profits subsequently outperform those with past losses?
= day traders who historically earned net profits continue to earn profits net of a reasonable accounting for transaction costs.
--
* these are excerpts from research paper submitted by
Brad M. Barber (University of California) &
Yi-Tsung Lee & Yu-Jane Liu (National Chengchi University Taipei)
= analysis indicates that regular day traders perform better than occasional day traders, though neither group is able to earn sufficient profits to cover transaction costs.
--
do day traders with past profits subsequently outperform those with past losses?
= day traders who historically earned net profits continue to earn profits net of a reasonable accounting for transaction costs.
--
* these are excerpts from research paper submitted by
Brad M. Barber (University of California) &
Yi-Tsung Lee & Yu-Jane Liu (National Chengchi University Taipei)
majority individual traders fail early in their careers
"if far fewer day traders are profitable after costs
what keeps new traders coming (into the market)?
.........overconfidence plays an important role
just as participants in lotteries and casinos overestimate their odds of winning,
individual day traders may place too much confidence in their ability
to read market patterns out of the gate.
...the majority of individual day traders fail relatively early in their careers,
something that has been mentioned to me by executives at brokerage firms"
-dr.brett steenbarger
author of 'the psychology of trading'
what keeps new traders coming (into the market)?
.........overconfidence plays an important role
just as participants in lotteries and casinos overestimate their odds of winning,
individual day traders may place too much confidence in their ability
to read market patterns out of the gate.
...the majority of individual day traders fail relatively early in their careers,
something that has been mentioned to me by executives at brokerage firms"
-dr.brett steenbarger
author of 'the psychology of trading'
why 8 out of 10 day traders lose money?
a study of transaction history of the taiwan stock exchange over a five-year period
had revealed the following interesting facts
* individual traders put 22% of their money for day trading
* institutions put 5% of their money for day trading
but the real shocking statistic is this:
"if all day traders (individuals as well as institutional) are arranged in decreasing order of their trade value
then top 1% account for 50% of all day trading volume!!!"
this is the crux of the study
which proves
that day trading is the game which big players play with tiny (i repeat, they said "tiny") players
--
as the authors of the study concluded
"day trading is treacherous, but not entirely a fool's game."
according to them, 8 out of 10 day traders lose money
while a small fraction (i repeat, they said "fraction") of day traders earn large persistent profits.
had revealed the following interesting facts
* individual traders put 22% of their money for day trading
* institutions put 5% of their money for day trading
but the real shocking statistic is this:
"if all day traders (individuals as well as institutional) are arranged in decreasing order of their trade value
then top 1% account for 50% of all day trading volume!!!"
this is the crux of the study
which proves
that day trading is the game which big players play with tiny (i repeat, they said "tiny") players
--
as the authors of the study concluded
"day trading is treacherous, but not entirely a fool's game."
according to them, 8 out of 10 day traders lose money
while a small fraction (i repeat, they said "fraction") of day traders earn large persistent profits.
Sabtu, 26 Februari 2011
keep walking
(a true story)
the sun was yet to rise
it was still pitch dark
and damn cold outside
when i got into my car
turned on the ignition
to drive 120km thru snaky mountain roads
all the way to chandigarh
from shimla
to attend a meeting.
--
i love such journeys
when the entire world outside is sleeping
and i am alone
among the ever-awake
mountains and valleys
echoing with pin-drop latenight silence
giving me an excellent opportunity
to talk to myself!
--
i had barely come out of shimla
and reached shoghi
when i noticed
a medium height
dark shadow
walking some 200meters ahead of me
in the middle of the road!
--
i was jolted out of my thoughts...
i slowed down the car
checked the locks
said my prayer
and focused on the approaching creature
looking like a human!
--
as i neared further
it appeared like a woman
walking with a stick
double her height
with feet as big as those of a hulk!
--
i was petrified.
i never believed in ghosts or spirits
but a doubt always remains!
--
i silently shifted the gear
and got ready to flee at top speed
in case my doubts were to be confirmed!
--
i must have been within a few meters from her
when i saw what i had not seen before!
--
it was a 50plus lady
with dark complexion
in tatters
walking like a dead-woman
holding a 10 foot high stick
(which seemed to be a broken branch of a tree).
--
she never bothered to turn her head
and look at the slow car by her side!
--
who was she
where was she going
at that unearthy hour?
--
and then
i looked at her feet....
--
my eyes went wide open
at what i saw....
--
she was not wearing shoes!
and her jumbo feet
were nothing
but
dozens of
polythene bags
wrapped one over the other
on each foot
to protect them!
--
she was a human!
--
i stopped the car
looked at her
without any fear!
--
she was surely
a mentally challenged
middle aged lady
walking to
unknown destination
back from shimla
which must have failed
to shelter her!!!
--
but where would she go?
every other city she goes to
would just be the same shimla
with another name!
--
i had no answer
i felt helpless
and
decided to move on
with a heavy heart!
--
this entire incidence
got me late by around half an hour!
--
i drove a bit fast
to cover up
for the meeting at chandigarh.
--
all thru the meeting
i couldn't forget her face
the stick she was carrying
and her feet!!!
--
after the meeting
i went to sector 17
to buy a new pair of shoes!
--
i saw several brands
including the ones that said
"impossible is nothing"
"just do it"
"i am what i am"
--
but everytime i asked the price
i was reminded of the lady's feet
wrapped in the polythene layers!
--
i dropped the idea to shop
and started my 120km return journey
into the mountains.
--
it was 7pm
and i expected to reach shimla
before midnight.
--
by now i had forgotten the lady.
--
i turned on the music on the stereo
and kept gliding uphill
when i was again jolted
out of my thoughts
when i saw the same lady
walking downhill
with stick in her hand!
--
the place was jabli
and the lady had covered
over 80 kms
since morning
on foot
on the layers of polythene!
--
i felt a lump in my throat!
--
my head echoed
"impossible is nothing"
"just do it"
"i am what i am"
the sun was yet to rise
it was still pitch dark
and damn cold outside
when i got into my car
turned on the ignition
to drive 120km thru snaky mountain roads
all the way to chandigarh
from shimla
to attend a meeting.
--
i love such journeys
when the entire world outside is sleeping
and i am alone
among the ever-awake
mountains and valleys
echoing with pin-drop latenight silence
giving me an excellent opportunity
to talk to myself!
--
i had barely come out of shimla
and reached shoghi
when i noticed
a medium height
dark shadow
walking some 200meters ahead of me
in the middle of the road!
--
i was jolted out of my thoughts...
i slowed down the car
checked the locks
said my prayer
and focused on the approaching creature
looking like a human!
--
as i neared further
it appeared like a woman
walking with a stick
double her height
with feet as big as those of a hulk!
--
i was petrified.
i never believed in ghosts or spirits
but a doubt always remains!
--
i silently shifted the gear
and got ready to flee at top speed
in case my doubts were to be confirmed!
--
i must have been within a few meters from her
when i saw what i had not seen before!
--
it was a 50plus lady
with dark complexion
in tatters
walking like a dead-woman
holding a 10 foot high stick
(which seemed to be a broken branch of a tree).
--
she never bothered to turn her head
and look at the slow car by her side!
--
who was she
where was she going
at that unearthy hour?
--
and then
i looked at her feet....
--
my eyes went wide open
at what i saw....
--
she was not wearing shoes!
and her jumbo feet
were nothing
but
dozens of
polythene bags
wrapped one over the other
on each foot
to protect them!
--
she was a human!
--
i stopped the car
looked at her
without any fear!
--
she was surely
a mentally challenged
middle aged lady
walking to
unknown destination
back from shimla
which must have failed
to shelter her!!!
--
but where would she go?
every other city she goes to
would just be the same shimla
with another name!
--
i had no answer
i felt helpless
and
decided to move on
with a heavy heart!
--
this entire incidence
got me late by around half an hour!
--
i drove a bit fast
to cover up
for the meeting at chandigarh.
--
all thru the meeting
i couldn't forget her face
the stick she was carrying
and her feet!!!
--
after the meeting
i went to sector 17
to buy a new pair of shoes!
--
i saw several brands
including the ones that said
"impossible is nothing"
"just do it"
"i am what i am"
--
but everytime i asked the price
i was reminded of the lady's feet
wrapped in the polythene layers!
--
i dropped the idea to shop
and started my 120km return journey
into the mountains.
--
it was 7pm
and i expected to reach shimla
before midnight.
--
by now i had forgotten the lady.
--
i turned on the music on the stereo
and kept gliding uphill
when i was again jolted
out of my thoughts
when i saw the same lady
walking downhill
with stick in her hand!
--
the place was jabli
and the lady had covered
over 80 kms
since morning
on foot
on the layers of polythene!
--
i felt a lump in my throat!
--
my head echoed
"impossible is nothing"
"just do it"
"i am what i am"
4 ways a market can move!
traders want market to move
so they leap at every move of market
including the traps!
--
a market can move in 4 ways
* sharp move with low volumes
= unsustainable trend likely to be reversed
* sharp move with high volumes
= start of a trend
* normal move with low volumes
= just an insignificant drift
* normal move with high volumes
= big trend wave on the move!
so they leap at every move of market
including the traps!
--
a market can move in 4 ways
* sharp move with low volumes
= unsustainable trend likely to be reversed
* sharp move with high volumes
= start of a trend
* normal move with low volumes
= just an insignificant drift
* normal move with high volumes
= big trend wave on the move!
how traders learn!
"you make observations,
you formulate theories about what is happening in markets,
you express those theories as hypotheses,
and you test those hypotheses with specific trades that you place.
over time,
your trading experience
either validates your market understanding
or contradicts it,
supporting or leading to modification of your basic theories."
- dr.brett sleenbarger
author of 'the psychology of trading'
you formulate theories about what is happening in markets,
you express those theories as hypotheses,
and you test those hypotheses with specific trades that you place.
over time,
your trading experience
either validates your market understanding
or contradicts it,
supporting or leading to modification of your basic theories."
- dr.brett sleenbarger
author of 'the psychology of trading'
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