An indecent proposal for Peter

[ruthlessimon]

anyone who consistently profits from trading (I assume you included) has solved the problem, even though there are always other wicked problems to solve in order to progress your trading.

I'm sure I've seen Peter write the following somewhere (along similar lines, although I might have made it up ):

"People have found a pattern that yields consistent returns, but they cannot do the background work to prove it."

I'd put myself in that category. My experience means mostly I've "stumbled" on certain opportunities, but it's pretty much all "instinct" (whereby my journal is based on videos, not data). This is acceptable to a point (i.e. fillrates), but it lacks finesse & ultimately "true" scalability (i.e. does my pattern work equally well on this race? on this runner? etc etc). Maybe I'm a rare breed who wants to prove their edges in cold hard data. But I think all top top traders, have a fundamental base in statistics & data handling - therefore can prove why what they do works - which can be taught.

[Derek27]

If you've made a profit every month for 12 consecutive months, that in my opinion is conclusive proof that your methods are profitable.

I analyse my journal on a meeting-by-meeting basis and find that I'm highly successful at some, and dreadfully bad at others. The reasons why are still a work in progress and perhaps I can do better by changing my approach to the losing meetings. But your overall profit and consistency is most important.

[newaustralian]

Great string of comments. I cannot prove with data that I win however if you have achievable targets they can be achieved with good, repeat good money management. I win using arbitrage between betfair and the online bookmakers and laying. My target is to make 1.17% on my capital each day, addint the profits to the capital and thus winning more each day. Having started with $1000 on August 1 ( birthday of Australian race horses) . I now have $2714 - slightly less than my target as back in September I made a mistake with my arbitrage and lost both sides. By adding the winning to my balance and still aim for at a win target of 1.17% I consider I will have a balance of over $20000 by July 1. Last year while developing my ability I turned $1000 into $12000 in a year. As I write this I have just bet on the US races - woodbine $300 @ $2.00 - Potential win $300 and layed $335 @ $1.89 - Potentail loss $298. The horse won so I made $2.00 BUT if the horse had not won I would have made $35 less commisssion of $17 = $18.00 or a return of about 6% on the bet. Another example - On Saturday an online firm offered a bonus bet equal to your original bet ( up to $100). My arbitrage of the original bet lost $12.00 BUT the bonus bet was placed such that I would make $76.00 on the race . Over all a win of $64 was certain. .. No ability or knowledge is required just the ability see the arbitrage and be willing to take small profits.

[Euler]

Are you still teaching trading to your daughter Peter?

And the other two now.

[Derek27]

I cannot prove with data that I win...

It's easy to prove with data that you win, you just subtract your total losses from your total profits.

As I write this I have just bet on the US races - woodbine $300 @ $2.00

Lucky you. I arb on US racing. With UK bookies you'd be lucky to get more than £100 on an evens favourite and they stop accepting your bets after you've won as little as a few hundred. I take it you don't have that problem in Australia ?

[spreadbetting]

.............
- therefore can prove why what they do works - which can be taught.

I'd agree, this week my greyhound bot made a little over £1.5K from a very simple trading process that could be taught to anyone. Whether the people I'd teach it to would be satisfied to make less than a couple of quid a market or put in the hours doing it manually is a completely different matter though. The simple truth is edges can be given away or taught, your mindset simply decides how much money, if any, you'll keep from the edge.

[Euler]

You can teach people, but some people just won't be taught. It was an amazing lightbulb moment for me to understand the psychology of why as that leads you into a world where you start searching for where that's likely to happen.

[mcgoo]

A saying from a much wiser person than me: " The Master is the Student and the Student is the Master"

[northbound]

There’s also another thing to consider.

In the early 2000s I was working for a software company and they sent me to two expensive courses to learn a new technology. I couldn’t understand shit, even though the teachers were experts.

Fast forward one year, I moved to a different company, had a chance 10-minute conversation with a new colleague that made me understand that new technology right away. He made me understand the main concepts so well that then I was able to learn the rest all by myself just by practising and looking at online examples.

The point being that different people learn in different ways. Paying an expert won’t necessarily help, unless the expert’s teaching style is compatible with your mind’s learning style.

[Iron]

Nobody can prove that they have an edge that will work between now and the end of time. I know someone who used to use a particular technique to make six figures a year, easily, but that technique no longer works as the markets have changed, for example.

If you're looking for a detailed understanding of exactly what the market does and when, so you can predict it with precision, good luck. You may become a legend and absolutely dominate the markets, but while you're getting to that point, someone with a tiny (possibly temporary) edge will be furrowing away and making a decent income.

Self-belief is a great thing, but the markets generally punish hubris.

You pays your money, you takes your chances...

Jeff

My experience means mostly I've "stumbled" on certain opportunities, but it's pretty much all "instinct" Maybe I'm a rare breed who wants to prove their edges in cold hard data. But I think all top top traders, have a fundamental base in statistics & data handling - therefore can prove why what they do works - which can be taught.

[Kafkaesque]

Are you still teaching trading to your daughter Peter?

And the other two now.

Can everybody hear that?

No?

I predict a stampede of gentleman callers asking for their hands in marriage

Edit: Realized they may be of an age, where that's a bit inappropriate. No offence intended, of course, should that be the case

[Kafkaesque]

Surely it's not about the money as there's no real end game. Unless the end game is to quit and do something else. I've always thought the biggest threat or downfall for a professional gambler or trader is to be too successful. Of course there are exceptions, these tend to be those who can invent new motivations and goals. They have the ability to trick their mind into believing there is actually something at stake once again. It's not easy though, most will fail in this aspect. It's just human nature.

I'm tempted to say, of course there's an end game. But then it might just be for me.

I get what you're saying, but "falling out of love" with trading - or anything else that requires continious self-awareness and self-improvement - can happen for any number of reasons, including the fall-outs of too much success, as you say.

Apart from enjoying myself and being mentally challenged, I have a clear end game in everything I do. Which is very much revolving about the monetary aspect of it.

[newaustralian]

Apart from enjoying myself and being mentally challenged, I have a clear end game in everything I do. Which is very much revolving about the monetary aspect of it.
As stated prevoiusly I am in to arbitrage. I agree with the above the challenge is the main game. Within the last 30 minutes being able to place a lay on Betfair at $2.22 and bet online at $2.65 with a certain profit is the thrill not the money although the money is enjoyable. Yesterday betting at $7.00 and laying at $2.75 gave me more profit than today but not a bigger thrill. Yes! it is the challenge