Why trading?

I'm tired of giving my time, energy, and productivity to effectively a headless behemoth of a corporation (or worse, to the biggest cartel in town: the government). I figure most people in the world can relate at least a little.

Maybe you're just tired of giving your time and energy for the profit of others, seeing very little of the rewards yourself.

While I have had a complex relationship with money, I think it's far to say that I don't care about wealth except in so far as it buys me freedom and buys my time back.

The best way to make money and get financially free is owning a business. At any given time, I always have some independent project for wealth creation underway. But businesses fail. In fact, the majority of businesses fail.

I personally had 3 separate lines of business all fail within months of each other in 2007. For the first time in over 6 years, I had to look for a job and my lack of work history hurt me even more. (Clients weren't paying invoices or returning calls, let alone offering to give a reference.)

I'm still recovering from that hit, and it's been nearly 20 years.

In other words, business may be a great path to financial independence, but it's not necessarily a path to true freedom unless you also have financial security.

Freedom (the allegory of Japanese traders).

For those who have not paid attention to global markets, the Japanese economy has been in a miserable state since the 90's. Their Nikkei stock market index (I believe as measured by Yen) hasn't even gotten back to the point they were at in the late 80's.

They have tried all kinds of ways to repair their economy, but recovery from their popped bubble probably will take years longer. Negative interest rates, mass purchase of US Treasury Bonds, attempts to increase both internal and external competitiveness, efforts to strengthen the faith of Japanese citizens in the economy, "Quantitative Easing" (QE), and a variety of other strategies all seem to have failed.

The Japanese economy went bust and it has been stagnant ever since.

This gave a kind of hopelessness to many of the citizens. They don't have faith in their jobs/careers, their pensions, or the economy. They don't see positive prospects for the future.

Out of the continued dumpster-fire that is the Japanese economy has arisen a new hero: the market trader. Over the past couple of decades, there have been several icons who rose from mediocrity into wealth and fame among the people. They got especially good at making money in the bear markets, when economies were crap.

Even recently, I have watched street interviews where common Japanese were asked how to make a decent living in Japan and almost all had the same answer: trading.

I think the U.S. economy heads to the doom of a bubble-busted as well. It's only a matter of time, really. I see most other "developed nations" all moving in the same direction.

To me, learning the skill of trading the markets is financial security that is available anywhere in the world that I may end up - financial security, not just financial freedom. Just like you can get good at playing poker (i.e., it's not all random luck), it has been proven time and time again that people can learn to beat the markets and come out ahead.

Beat the house with data (and effective risk management).

I have a friend whose cousin is a convicted felon, but has stayed out of prison for over a decade and a half. No one wants to hire this man, who served his time and reformed his ways. The felony is a lifelong scarlet letter that follows him everywhere.

This felon has made a living in the casinos. Specifically, at craps.

Is that insane? Actually, it's not if you know the statistical probability of a series.

On any given roll of the dice, you have the same odds. However, as time progresses and more dice rolls have been made, the statistical probability of a series changes the overall probability. An obvious example of this is that 3 snake-eyes in a row is very unlikely compared to snake-eyes once and any other pair following.

The markets are much like rolling the dice. On its face, you simply have a "random walk" of probability playing out. Except there are qualities and properties to markets that make it less random than a pure "random walk". There is psychology. There are orderbook dynamics. There are news events and other catalysts. Many of the market dynamics also can play out in similar patterns.

You can learn or discover different "plays" and market setups that give you an "edge". If you have measurable conditions, you can systematize those situations and gather data so you know the statistical probability to win on any play with the correct conditions. You also can study conditions to know better what play is likely to succeed or fail in any given situation.

This is called technical analysis.

Even if you had 60% probability to succeed with any given strategy (and some that I've gathered data on show statistically better odds than that), you could couple that with risk management rules and always come out ahead over any given period.

Or maybe you have a 60% lose rate, but losses only take an average of 4% of what you risked and winners give you an average return of 30%. That situation also can be leveraged to give yourself an advantage and always come out ahead (over the long run).

Effectively, your statistical probability for any given play becomes an advantage that allows you to position yourself like "the house" in a Casino instead of some degenerate gambler.

Proven techniques to have an advantage when implemented strategically.

Some plays are better than others. Many plays are only effective under certain market conditions or within specific timescales.

No matter what, you can combine your data that indicates probability for any strategy to succeed with effective "bet tactics" and risk management (e.g., bet more on the strategies that have a higher likelihood to succeed, Martingale skewing methods, etc.). This means the disciplined, scientific trader always has a means to win in the markets, no matter what.

I say "scientific trader" because it should have nothing to do with emotions or intuition. Your moves and plays should be developed and learned over time, and data needs to be gathered so you can always know the odds in any given situation that relates to your strategies/plays. (This is called "rules based trading" or "systematic trading".)

I have studied technical patterns and trading as a hobby for a while. I resisted it for a while, but could never stay away from trading for long and I've lost too much money by playing around without leveling up and getting good to continue just gambling.

Now is the time to learn and apply what I learn so I develop the skills of a seasoned and winning trader.

Everything I've learned so far is just the basics. I am currently working through SMB Capital's lessons and I then plan to study as part of the Unger Academy.

Rules based trading -> Algorithmic trading

(Successful trading * defi) == rising tide that raises all ships

This blog is about me learning new skills to advance and progress in life. To create a better world for all, and experience my dreams made manifest.

Trading is one of those skills.