Some Realities About Trading… Bear Style :o)

Once every few weeks I carry out a wide online search for material about Forex and trading in general to understand how new traders are thinking and how professional traders, marketers and bloggers are addressing the needs of the trading community. A few days ago – while carrying out this task – I found out some of the funniest and most sincere videos I have ever seen about trading, not only are these videos filled with truths about new traders and market realities but they are filled with a lot of sarcasm and the funniest teddy bear characters you will ever encounter. On today’s post I want to share with you some of these videos so that you too can have some fun – and learn some of the harsh realities – surrounding trading.





The first video I encountered – which was perhaps one of the funniest – involves a “kid” who wants to become a trader after getting a degree in literature. The other bear starts to ask him questions about becoming a trader and the harsh reality behind trading. The “new kid” has definitely some very bad misconceptions about trading regarding the easiness to make profit and the obstacles on the way. Some things said by the wise bear are actually very true :

“What about being a meaningful contributor to society?” — says the wise bear

This is a harsh reality many traders do not want to accept. Speculating is an activity which – by its very nature – provides little or no benefit to society as a whole (some would even argue that it harm society altogether). Traders become parasites in the sense that the mere act of trading has no final objective besides the making of money. Warren Buffet once said something very wise — if all your business does is make money, then you don’t have a very good business. In my view, trading – on its own – brings no benefit to society but the use of the money obtained through trading does not need to follow the same path.

I view my trading as a way to obtain the money I need to do meaningful contributions to society in the creation of real world businesses, generation of employment and helping those in need. Trading gives me the money that enables me to contribute in much more meaningful ways than any other activity I could be doing :o) The wise bear also points out another harsh reality in a very sarchastic way :

“what about staying awake at night deciding whether to jump of a bridge or to start a ponzi scheme to hide your losses”

It is no mystery that in the real world the large majority of traders fail. I have talked before about the illusion created by media and marketing which always tell stories about those people who succeed but never about the thousands which fail. This phenomena causes people to have higher expectations of becoming successful than what is truly found in reality. If people saw 98 marketing stories about failed traders and only two about winning traders the story would be very different but obviously what you get is a massive amounts of material telling people “they can” while only a few people ever tell them otherwise. In the end most people do not believe their chances of success are slim because simply everything is telling them that they will be able to succeed. The harsh reality is that almost all traders fail, most do no end up with a scenario as bleak as the one mentioned by the above wise bear but many do end up with large financial losses and the need to “start from scratch” after taking bold risks and underestimating the importance of adequate risk management and statistical analysis.





There are another ton of very interesting harsh teddy bear videos which will make you laugh almost to the point of shocking (at least many of them made be laugh hysterically).  I would recommend the videos about Goldman Sachs and those about Quantitative easing although the above video about equity traders is perhaps the funniest amongst all the videos about trading. An inherent truth about any probability based game where future odds are not known : You’re a f***in gambler!

If you would like to learn more about my work in automated trading and how you too can learn to build and trade your own automated trading systems with sound analysis and robust trading techniques please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach towards automated trading in general . I hope you enjoyed this article ! :o)

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2 Responses to “Some Realities About Trading… Bear Style :o)”

  1. Chris says:

    Daniel-

    Great videos and very funny.

    The reference to ‘Big Swinging Dick’ is from “Liar’s Poker” by Michael Lewis about his time at Salomon Brothers. Its a great book and definitely worth the read if you haven’t already.

    The videos also bring up a sad truth about trading that is a soul-less business in that most of the time you are trying to take money away from someone else. Therefore, its not a world where kind, meek and moral individuals will find much comfort. Better those people become writers, librarians or computer programmers like myself.

    Another reality is that for full-time traders, the Internal Revenue Service (Government Tax collecting authority in the US) makes traders jump through all sorts of hoops to get ‘Active Trader’ status which simply allows you to deduct all of your trading related expenses. People like myself could easly get tagged as “hobby” status which means all your expenses are paid with after-tax money and of course all your profits are fully taxable as ordinary investment income.

    Another potential future pitfall for the full-time trader is the ‘Transaction Tax’ proposed by the government where they take some percentage of EVERY transaction, forex, stocks, options, futures, ATM, etc. This law alone could put another heavy burden on the trading community. And the general public would have little sympathy since traders are widely considered to be parasites of society and produce no real value.

    On the plus side, trading can be done from anywhere, requires no employees, no employer if done sucessfully can mean the freedom to live life as it was truly mean to be lived. With the help of all your great work, I will get there someday.

    Thanks again for the great post,

    Chris

    • admin says:

      Hi Chris,

      Thank you for your comment :o) I haven’t read “Liar’s Poker” but I will certainly give it a high priority within my to-read list now that you have recommended the book. Probably you’re right about the fact that trading always takes money from someone else’s hands and therefore you could think about it as a “predatory business” altogether. Certainly this makes it difficult for people not looking to “harm anyone” to work on this business – from an ethical point of view – but I like to think about myself as a type of “Robin hood” kind of figure. Take some profit out of the “big boy’s pockets” to help the little guy succeed and create small businesses and sponsorship opportunities for children who aren’t very fortunate.

      You’re also very right about taxes and costs for the little guy. The smart thing to do is certainly to achieve active trader status as soon as possible (in the US) or start trading through a type of legal entity which allows you to ease your tax burden (think corporation like trading structure, a.k.a hedge fund). If a person can then it might be best to simply get a nationality where trading taxes aren’t as high (think Switzerland – if I am not mistaken – or places like Panama where taxes on this business are non existent).

      As you mentioned in the end a big advantage from a business stand point is that trading can give financial freedom if done successfully as well as independence from a specific physical location (as long as you have Internet access). Certainly these are some of the things new traders think about when they attempt to reach success through trading but certainly the huge amount of work required to do so is generally understated. That said, I am very glad to know you consider my work a valuable tool to achieve success in this field. I will certainly keep on doing my best to ensure this is the case :o) Thank you very much again for your comment,

      Best Regards,

      Daniel

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