I’d like to venture to paint a picture of the trading social strata…
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Bank trader. Got hired by a bulge bracket investment bank, went through a stress interview, got coffee and was yelled at for a while until he got to become junior trader. B-school grad, in their mid to late twenties, or guy who was very good in the back-office/mailroom and got lucky. Often has a masterful palette of rapid-fire, four letter word rich expressions.
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Retiree, either a school teacher or engineer who knows how to use a computer. Played stocks for many years, always checked quotes in the paper every day during lunch. Lives off of a pension, trading is a hobby.
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Doctor/dentist/lawyer. Has lots of disposable income. A broker called up one day, he/she got burned, then decided to learn it themselves. Studies patient charts during working hours, currency charts at lunch and at home. If they are psychologists, they quickly discover there’s a lucrative market in coaching traders, which probably makes even more money than trading.
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Casino maniac. At first it was roulette and craps, then baccarat and poker, and then someone told them about trading commodities. Spent a few months learning about the markets, got an account, made some real killer trades, then blew it all. Rinse and repeat many times over, stop losses are for wimps! Then they heard about the Forex market…
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The get rich quick hopeful. At first it was the make $1000 a week stuffing envelopes kit. Then the “get paid $100 for each friend you sign up” ponzi scheme. Then the blood diamonds in Nigeria. Then they discovered the Forex Money Printing Machine ™ software, which lets you make $10,000 a week while you SLEEP! That didn’t work. But then they discovered all you have to do is use a stochastic oscillator, and when it goes up you sell, and when it goes down you buy. Or the opposite? Ah it doesn’t matter, its supposed to work eventually…
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The frustrated software engineer. With a heavy background in math, there is some pattern to the market they are going to discover. They learn of MT4 and immediately begin writing Expert advisors. One pulls a good income for three months, then blows up. A few tweaks here and there, some help from a web designer, and then its “The Forex Money Printing Machine ™, reduced from $9999 to $999!”
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The little genius. High schooler who discovers the market, immerses themselves into it, and turns $5000 into $2,000,000 in six months. Planning to turn that into $80,000,000 in the same amount of time, end up with a fat margin call, but swears to never give up and starts again. Damaged ego from such a great loss is a big stumbling block to success, more capital is badly needed. Gets together with a frustrated tech analysis expert and starts a trading coaching business teaching you the “techniques that made me a millionaire in just six months!”
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The person with a five figure debt. See “#5. Get rich quick hopeful”.
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The wanna be big guns trader. Has 15 monitors. Leases a Bloomberg terminal. Borrows money from family and friends to trade, promises big returns. Has three weeks of 400% returns in demo and thinks that soon enough, they will be on the cover of the Wall St Journal making all the i-bank traders look like wimps. Is already paying an attorney to draw up papers for a hedge fund. Five years later, after being bankrupt and sued, more capital is needed. He starts up “MillionareTraderz.com”…
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The retail trader with the midas touch. Pulls in consistent, mindboggling returns in various market conditions with minimal drawdown. Has the dedication and focus of a professional athlete. Lives in an isolated, quiet suburban area or out in the wilderness. Is awfully frugal in all respects. Has a seven figure trading account, with another seven to eight figures shoved into fixed income or investments. If you saw them at a party you probably’d never guess they knew a thing about the markets, let alone knew how to trade…
