Most who want to get rich or retire wealthy... have got it wrong

[Nortorious]

Not only does it cover how to save (for the future) but it also covers off wise investing.

To me, trading vs investing, it means the same. I'm putting my dollars to work (as slaves) so they can earn me a return. Then from any return gained, it joins the slaves already employed by me to do more work.

And that is how my empire will be created....

 

[tech/a]

REMEMBER their is only one thing money can't buy - POVERTY

Oh it can certainly do that!

it joins the slaves already employed by me to do more work.

Who is smarter
Those with a degree
OR
Those who employ those with a degree?

 

[DeepState]

REMEMBER there is only one thing money can't buy - and that's POVERTY

Yep. Sort of. Apart from revolutions and overthrows that happen because those without money don't like being in poverty on their own. Misery loves company and all that. But, then, in one of those internally water-tight things, once you are in poverty, you don't have money. If you are rich, you are not poor. This is wisdom? Actually, thanks for the suggestion on the book. It does sound interesting. I'll read it next up.

Remember: The chase for money via trading on inflated belief in underlying skill can lead to poverty.

If you serve enough time educating yourself you'll end up with a degree.
Spend enough time on the job and you'll become an expert.

Given the above a high percentage.

What is the percentage for an expert like yourself? 'High' is about as useful to this question as saying sell the DAX when it is 'high'.

 

[craft]

...as would a highly skilled coin. It too would blow the investor out of the water. The hard part being to know that the coin was highly skilled at the outset, unlike its lesser skilled siblings. Perhaps the coin that tossed three all-in binaries in a row to achieve the above outcome is 'highly skilled' and we should back it accordingly?

At a starting line on 9 Mar 2015, 1000 traders from ASF (incl lurkers) who have had more than three years on the site following various threads over time and, presumably, have a couple of hundred hours of flying time and sim time logged, start with $25-30k. The Institute of Highly-Skilled Traders gave this to them, so it is not even their capital. They are running a turtle experiment, X-Factor for traders. They get to keep the money only if they convert this to $200k in less than a year. If not, they walk with nothing. For the purposes, this money is presumed to be noticable as supplemental income and considered to be worth 2-hours a day of spare time by each candidate. Nothing stops them from trading on their own account either....etc. add legal stuff to close off the loopholes to the clear intent of this question. Multiply the dollar figures by 1000x if you feel the need to make the traders stupendously motivated for the chance to make $200m.

They trade FTSE and DAX only.

What proportion of traders, who make this attempt from scratch, do you think would achieve this outcome if this type of thing was their objective? Can you outline the reasoning?

If you make the system closed so the 1000 ($25K) only trade with each other (and expense free) and make it that everybody has to continue until you reach 200K or zero then 12.5% will achieve the 200K and 87.5% will achieve zero.

Add expenses and the winning % has to be less 12.5%; allow the winners to accumulate beyond 200K and the winning % has to be less than 12.5%; Allow the losers to shut up shop before losing everything and the winners percentage again has to be less than 12.5%. The drags on the pool are cumulative –so real world is way less than 12.5%.

 

[DeepState]

....so real world is way less than 12.5%.

Yep. Under that scenario. Although the experiment won't actually be run (per Habakkuk), the central issue to hand is actually the nominated probabilities.

Just to give it some flex, the system in the set-up I described is not closed. This allows the ASF trading league the opportunity to take or give from the entire market including the project funders (who have given them a head-start via the stake). Hence, the figure can be above 12.5%. In a random coin situation without frictions, the figure would be higher than this. If they are all expert traders, even 100% is possible. Heck, it's possible even if they are not. The expected figure isn't zero straight off the forum either. Or, at least, it is less likely to be zero than some positive figure.

So, let's see what world we are in.... I'm curious. To the advocates of trading as a means of supplementing income etc. ($200k is not a 'vast wealth' figure) what is the probability/proportion you think is about right? What does 'high' mean? 50%? 60%? 12.5%?

 

[skc]

in one of those internally water-tight things

I think the chance of success at trading is another example.

If you work hard and diligently and purposefully... you will be a successful trader.

If you can't become a successful trader, you didn't work hard and diligently and purposefully.

'High' is about as useful to this question as saying sell the DAX when it is 'high'.

So by that definition, the answer is not just "high"... it's almost an absolute certainty.

 

[craft]

Yep. Under that scenario. Although the experiment won't actually be run (per Habakkuk), the central issue to hand is actually the nominated probabilities.

Just to give it some flex, the system in the set-up I described is not closed. This allows the ASF trading league the opportunity to take or give from the entire market including the project funders (who have given them a head-start via the stake). Hence, the figure can be above 12.5%. In a random coin situation without frictions, the figure would be higher than this. If they are all expert traders, even 100% is possible. Heck, it's possible even if they are not. The expected figure isn't zero straight off the forum either. Or, at least, it is less likely to be zero than some positive figure.

So, let's see what world we are in.... I'm curious. To the advocates of trading as a means of supplementing income etc. ($200k is not a 'vast wealth' figure) what is the probability/proportion you think is about right? What does 'high' mean? 50%? 60%? 12.5%?

As far as outperformance goes the entire system is closed. But with your rules the 1000 can be a niche in that big system – so the question then becomes – is the forum 1000 above average so as to be more represented in a winner’s portion of a say typical Pareto distribution from the overall system.

Personally I reckon that most of the forum 1000 would be fools following bigger fools, so any theoretical % of winners would be lower than the overall market participant population.

Nominating a % would be a false indication of certainty – but the probability is that only a very small % of people will achieve the objective, and ongoing data would be needed to establish skill from luck to determine repeatability.

 

[DeepState]

Personally I reckon that most of the forum 1000 would be fools following bigger fools, so any theoretical % of winners would be lower than the overall market participant population.

Hehe...and what are the characteristics that distinguish run-of-the-mill fools from the bigger fools they follow?

Nominating a % would be a false indication of certainty – but the probability is that only a very small % of people will achieve the objective, and ongoing data would be needed to establish skill from luck to determine repeatability.

In a perfectly frictionless system, the chances of blind luck leading to the target is 25% in an open system. If you get given this chance, you expect to take home $50k just for showing up and whacking on a few random trades. I guess your general estimate, without false precision, is 'somewhat lower'. As was mine. But, then, given I don't see what they see either, I'm no expert at this money making stuff.

 

[craft]

Hehe...and what are the characteristics that distinguish run-of-the-mill fools from the bigger fools they follow?

I'm not too sure .... but I have heard that it takes 10,000 hours to become an 'expert' fool.

 

[DeepState]

I'm not too sure .... but I have heard that it takes 10,000 hours to become an 'expert' fool.

There is so much gold coming out here that I am going to take a massive short....

 

[burglar]

I'm not too sure .... but I have heard that it takes 10,000 hours to become an 'expert' fool.

You're allowed to learn along the way!

 

[tech/a]

Your right
Very few will invest the time.
So very few will have success.

 

[craft]

Your right
Very few will invest the time.
So very few will have success.

I hope you are only implying “your right” to the outcome that most if not all that follow this thread will fail and not the reason why, because I didn’t think it’s just a lack of time invested that can lead to failure.

Practice doesn’t make perfect – practice makes permanent! Better make sure you’re using your time wisely and heading in the right direction – heading in the wrong direction and having to backtrack is an exercise in futility.

Be very careful who you listen to and emulate – that’s hard when you’re starting out. My suggestion is to look for documented success – can’t get a better score card than this and what’s more he’s happy (and able) to simply lay out the core principals for anybody that wants’ to listen.

http://www.berkshirehathaway.com/letters/2014ltr.pdf

 

[tech/a]

Yep
Don't disagree.

 

[fiftyeight]

Me personally, I would love to achieve $200k but it is not my aim to do so and definitely not my aim to do so off of $25-30k

I have no idea if I will be a successful trader, I have to assume I wont be and will keep my job until something leads me to a different conclusion.

Should this prevent me from trying? I enjoy it and all it has cost me is a bit of time and at some stage if sim proves successful a small amount of capital to test live.

I am awesome at Two-Up will this help haha?

 

[pettlepop]

You could always save money on expensive wine by making your own.