I am a professional investor and trader; at a time for clients but on my own accord. The whole ‘digital nomad’ concept still has me under its’ grasps.
That might sound weird, given my conviction in the title of this post.
I actually hate the stock market…
But as long as it is around and there to take advantage of consistently, it’s a sort of why not mentality. Somewhat like this quote…
“The few who understand the system, will either be so interested from its profits or so dependant on its favors, that there will be no opposition from that class.” — Rothschild Brothers of London, 1863
Nobody is quite sure if that quote is actually from the Rothschilds Brothers of London but it certainly sounds spot-on.
A few years ago I decided to start sharing some of my trading strategies, as well as most of my trades. StockTwits has treated me very well as a platform for refining my trading strategies and meeting some really smart and fun people along the way.
What actively engaging with traders of a very widespread background has taught me is this. Well, not taught me, but reminded me to include in my fundamental rules for the market.
One of those rules is one that people struggle with. But as soon as they establish this as a mindset, they tend to turn profitable.
The Markets Are Rigged Get Over It
I had written a short outline of this article a few months ago.
At the time it focused on the markets rigged beyond what the very talented author Michael Lewis. He’s written a few expose pieces on the market, but this one focused on High-Frequency Traders and their practices of front-running.
While that’s certainly evidence of rigging; the truth is this thing has been rigged from the start.
The Myth Of The Stock Market
The markets are intended to be a ‘dustland fairytale’…they are supposed to be a big part of the American Dream.
Anyone can invest in stocks and end up retiring on that investment.
They can trade their way to financial freedom. Beyond that, they can trade their way to vast fortunes.
That’s how the movies make it look anyway.
But there’s a reason people seem to revere the two Wall Street movies (the pair starring Michael Douglas) and The Wolf of Wall Street” more than they revere Boiler Room or Too Big To Fail.
I think those favored movies being a part of our culture has caused an exponential growth in people interested in the stock market. Those films as well as this digital age of investing. You don’t have to call your broker and get a confirmation at close any more.
You can get real time fills at tiny or 0 commissions these days.
This has brought about a general train of thought that, as well written in a few “girl power” Nike commercials, stands as: “anything you can do I can do better, I can do anything better than you.”
New Investor Bias
They say crashes are caused by panic selling. But does that really make any sense?
The avalanche needs to be on volume as well as some sort of news. Who controls the most stock volume as well as the news outlets?
“Big money”. “Smart money”.
Market manipulation? Rigged markets? Call it what you would like, but at the end of the day
- Approximately 20% of retail investors/traders are consistently profitable on an annualized basis. So 1/5 of the people reading this with equities in-mind with actually make profit every year.
- Approximately 10% of retail options traders make consistent annualized profit. 1 out of 10 of you will do well with options.
- Roughly 5% of retail futures traders are consistently profitable on an annualized basis. 1 in 20 of you reading this will be consistently profitable each year.
Trader Statistics and Reality
It is very easy to say that you’ll make it into those tiny percentages. That you’re smarter than everyone else so obviously you’ll make it.
Frankly, it has nothing to do with intelligence. Tests and people have told m I’m a fairly smart individual. And yes, I’m cocky enough to believe them…but only up to a certain point.
Intelligence has noting to do with your ability to make money.
Sometimes buy and hold really is the best strategy. But as I find in my trading room, there’s a lot of people engaged with the dreams of flipping themselves into wealth with options.
Which yes, is possible, but don’t ever rely on that assumption until you have enough capital to.
I’ve got way more to say on rigged
markets but Trump made me do this.
Yes. Donald Trump forced my hand to post this tiny version of the intended post.
Because after taking credit for the all-time highs across the indices, he came out with a statement back in February that I only came across as a
Well, to be honest, I was going to post a chart. But I’ve already mentioned recent all time highs.
There are talks of a Trump impeachment. While I doubt such a thing will happen during this first-term, I must say that if anything that would be bullish news.
Because it would mean Wall Street is still calling the shots. As such. it means they got wanted from Trump and he’s been there best hired gun yet with ‘his’ tax and banking reforms already going through. The street got what it needed, and now it doesn’t really care.
It’s all just a distraction.
I love this quote, have likely quoted it on this blog already, and it stays shining on my ST profile. I made a cool image this time though.
That’s all for now. I’ll have a longer form piece on rigged markets later in the week, this just seemed like a great time to enter the ‘are the markets’ rigged debate.
Trade safe. And to quote a quote I coined myself in my first trading room:
“Invest like a gentleman, trade like a G”