Are Markets Random?

[itsmepemba]

Hi All,

Based on the research done so far, I find that people claim that 90-95% of the traders are losers (in intraday trading). My confusion is that, how can the vast majority is always wrong each single day. Are we all fools? Isn't this a pattern??? and a system kept in place to make people lose money. I doubt there are some privileged elites having access to high level market data and making money each single day and the vast majority always keep complaining about the trading system, sometimes the software, sometimes psychology and what not.....

Please guide me here as I am in a great confusion to continue trading. I have stopped it for sometime now and just watching markets.

 

[oi trader boi]

Hi,You can refer my thread,I'm also in a same boat-

http://www.traderji.com/general-trading-investing-chat/102303-should-i-quit.html

 

[anuragmunjal]

Hi All,

Based on the research done so far, I find that people claim that 90-95% of the traders are losers (in intraday trading). My confusion is that, how can the vast majority is always wrong each single day. Are we all fools? Isn't this a pattern??? and a system kept in place to make people lose money. I doubt there are some privileged elites having access to high level market data and making money each single day and the vast majority always keep complaining about the trading system, sometimes the software, sometimes psychology and what not.....

Please guide me here as I am in a great confusion to continue trading. I have stopped it for sometime now and just watching markets.

Okay interesting question. you want to know why/how majority of traders loose money...
lets take a hypothetical example.. there are four friends A, B, C, and X.
A B and C have 10000/- Rs each. they decide that they will play cards everyday.. their total kitty is 30000/-. X says he does not know how to play cards properly, so he will not play... but since he stays alone , he can let the others play in his house.. but for a small fee of 200/- Rs. per day.. the others readily agree.. okay someday A gets lucky, someday B or C ... what happens after 3 months...
at 200/- Rs per day * 90 days.. X has 18000/- Rs now.. A, B & C's kitty has now reduced to 12000/- from 30000/- and all three are loosing money.
Equate A, B, C to traders and X to Brokers who take commission, Exchange which takes Exchange charges , Govt . which takes stamp duty, stt, service tax etc...

Regards

 

[desiwarrenbuffet]

Everyday we make the trades with great belief that we have mastered the market,but everyday we are in rude shock.

 

[gunsho]

Okay interesting question. you want to know why/how majority of traders loose money...
lets take a hypothetical example.. there are four friends A, B, C, and X.
A B and C have 10000/- Rs each. they decide that they will play cards everyday.. their total kitty is 30000/-. X says he does not know how to play cards properly, so he will not play... but since he stays alone , he can let the others play in his house.. but for a small fee of 200/- Rs. per day.. the others readily agree.. okay someday A gets lucky, someday B or C ... what happens after 3 months...
at 200/- Rs per day * 90 days.. X has 18000/- Rs now.. A, B & C's kitty has now reduced to 12000/- from 30000/- and all three are loosing money.
Equate A, B, C to traders and X to Brokers who take commission, Exchange which takes Exchange charges , Govt . which takes stamp duty, stt, service tax etc...

Regards

In this process, A,B,C if they are little smart, 'A' start tip service saying, they mastered the art of playing cards, 'B' brags in forum catching tops and bottoms, 'C' says, he is the best trader and can manage others fund for little fee. There you go, they attract D,E,F,G,..... all come in with their funds.

Damn it guys, X is the only group making money :rofl::rofl:

 

[deba72]

Hi All,

Based on the research done so far, I find that people claim that 90-95% of the traders are losers (in intraday trading). My confusion is that, how can the vast majority is always wrong each single day. Are we all fools? Isn't this a pattern??? and a system kept in place to make people lose money. I doubt there are some privileged elites having access to high level market data and making money each single day and the vast majority always keep complaining about the trading system, sometimes the software, sometimes psychology and what not.....

Please guide me here as I am in a great confusion to continue trading. I have stopped it for sometime now and just watching markets.

Don't you think Lehmann Brothers ( and so many others ) had the best available tools,data,manpower and financial resources in this world ? Still why did they shut down ?

 

[oi trader boi]

@ anurag Sir and gunsho Sir,pls do reply my queries whenever free-

http://www.traderji.com/general-trading-investing-chat/102303-should-i-quit.html

and

Scalping Query-
http://www.traderji.com/general-trading-investing-chat/102421-bnf-scalping.html

ty

 

[Smart_trade]

Markets are mostly random but sometime they get into non random phase and that is where good traders make money.Random market behaviour is discussed in economics but the people who discuss it in great length remain economic professors and analysts.But if markets are always random how does one explain few traders make consistant money from the markets..weeks after weeks and years after years. They cannot be lucky every week and every year.

So we have to take our pick...either believe that markets are random and no one can make a rupee from it in the long run or find out how consistant performers are making money and follow them....it is our choice really.

I believe that money can be definately made very consistantly from the markets...so I belong to the second group

Smart_trade

 

[Smart_trade]

Don't you think Lehmann Brothers ( and so many others ) had the best available tools,data,manpower and financial resources in this world ? Still why did they shut down ?

No risk control is the reason...many times the losing positions are kept hidden from the RMS to avoid losses and liquidation.

ST

 

[gunsho]

And your mantra of RR will help on the different cycles!!!

Markets are mostly random but sometime they get into non random phase and that is where good traders make money.Random market behaviour is discussed in economics but the people who discuss it in great length remain economic professors and analysts.But if markets are always random how does one explain few traders make consistant money from the markets..weeks after weeks and years after years. They cannot be lucky every week and every year.

So we have to take our pick...either believe that markets are random and no one can make a rupee from it in the long run or find out how consistant performers are making money and follow them....it is our choice really.

I believe that money can be definately made very consistantly from the markets...so I belong to the second group

Smart_trade