err, nope.......
let's see if i got this right.....apart from the posturing......the demand/supply side of futures contracts is not the same as the demand/supply side of (say) crude
TakeYourProfit: reading of tape is the reading of intent and bares no relation to what goes into newspapers, so, what's the point of mentioning papers and journalism?
this is the question that has not been answered:
"do derivatives serve a purpose ? I don't mean their stated purpose, I mean do they actually do what they say they do ?"
the question is not; can we make money out of derivatives .....that's starting at the tip of the iceberg and working your way down.......which is where most people start and end and lose their shirts doing it.......
youve quoted a 1935 book......which is nice.....what you've not quoted is how much the game, that creates those same (historic) patterns, is not the same today as it was when that book was written.....in other words the basic loopholes for extracting money from your pocket are not the same as the ones that existed in 1935 even if the basic human ambition is the same......the style hasnt changed but the fashion has......the style of extracting wealth from you is never likely to change, the facility has to change, that is, the fashion has to change.....the internet does not make people trade more, people trade more because the internet facilitates that trade......volatility is facilitated, or expanded, because we have provided more ways to gamble via meaningless derivatives with worthless credit debt (lol .....i feel a column coming on).....so understanding the societal ramifications to those who can ill afford the cost passed onto them and direct money extraction, as a function of that facility, are two completely different things.......
derivatives allow a player to extract to the extent of how much that player understands the mechanics of the trade and how those mechanics can be used against you .... in the bigger picture, they do not protect the other people whom are affected by that transacting......
the difference between supply/demand for a commodity is not the same as supply/demand for the derivative instrument simply because the time factor does not allow that to happen and rarely would they co-incide and you'd go nuts waiting for it or trying to figure it out and they are a different set of traders at any given time
i think, if correct, the original pre-empt for conversation is whether there is a genuine benefit for societies, en mass, for these derivatives to exist as opposed to being a benefit to individual mm's/bourses/traders...we know there is a societal benefit to insurance for crops etc, but, when does a basic insurance become a selective/elite groups ability to tap a larger groups ability to lose money to that elite group without gaining any real benefit going back into society......when you think about that question, in reality, the onus is on the providers (at all levels) of those instruments to prove their case......currently there is no proof offered that shows society receives any shore-up, consistancy of trade, or smooth markets as a result of derivatives......there is no mathematic that proves historic gains to other markets surrounding the derivatives market and what evidence is available improves our suspicion that derivatives move further and further away from being a secure investment idea with the expansion of credit debt.......aside from the obviality of what happens to the derivative scene with an implosion in credit debt facilities, the amount of time that is available to exit positions in that event is extremely small.....
the question that may be more pertinent, then, is, how would society benefit less if all the imaginative instruments were withdrawn? Could we prove that there would be a mathematic showing a return of liquidity into products/instruments that actually spur reliant trade if we know that derivatives are not an actual benefit other than to a select few?
quotes from a 1935 text book.......that still cracks me up.....sounds like someone with defense wounds
i dont think you actually read my original post.... the questions you are asking as to whether or not the markets should even exist, is a question for the person who controls our economic system & our governments... not for me. The understanding of this issue is for a person interested in a career in journalism.... not trading...
None of the questions you are asking are important for a trader whose business it is to make money TRADING... do you understand???
you can act like they matter, but the more you test your "theories" by testing the market with your money, i am sure the market will give you the answer you are looking for... if you are losing money, that is the market telling you your ideas are wrong...
you see, i have studied many pieces of market research dating all the way back to 1854... do you know what the ONLY thing i can tell by looking at that data over a period of so many hundred years??
the markets always do the same thing; they go UP, they go DOWN, or they go SIDEWAYS.... that is it....
as a trader your job is to simply put yourself in a position to participate in those moves... so please, forgive me for not even making an attempt at answering the questions as to why the markets even exist in the first place... the only thing i care about is that they DO, IN FACT, EXIST...
The scope of my job as a trader is to trade those markets profitably for my clients who have entrusted me with their money to make it grow larger... nothing more, because the rest doesnt matter. my client's money matters and I would be doing them a disservice by behaving in a manner that would prevent me from doing my job... do you not agree?
if you cant make money trading, you will not be a trader for very long...
which means you have to constantly educate yourself so you can always do your best to stay one step ahead of the market....
I am going to dismiss your sly insults that you have thrown my way as nothing more than an individual who is just ignorant of the facts of history and of the very nature of the markets themselves.... but the only way you are going to come to an understanding of the markets, IS by reading books that date back not just to 1935, but even to before the American Civil War!!!
i am uploading 2 pictures.... one is a chart of the market through the crash of 1929 and up to 1935 just before world war 2.... i took this image out of the 1935 book i mentioned in my previous post....
the second picture is the weekly charts for the S&P500, the DowJones Industrial Index, & the DOW Jones Transportation Index...
Do you notice any similarities between the markets from the 2 very different time frames.... theyre exactly the same arent they???
Imagine that, somebody with the knowledge of price action from 1935, would have been able to reap the rewards of a collapsing markets when they all lost MORE THAN 700 POINTS ACROSS THE BOARD JUST A FEW SHORT MONTHS AGO....
so again, I ask you, are you a Trader, in this to make money, or, are you a Journalist, trying to figure out why your bad decisions led you to the loss of your life savings?
that question is for you yourself to answer because it will lead you down very different paths... depending on how you answer it, and how HONEST YOU ARE WITH YOURSELF... if your intent is to try to make yourself look as cool as possible on a forum your not only wasting mine, and everyone else's time, but you are doing yourself a tremendous disservice by taking yourself out of the opportunity loop that reading and self educating yourself so obviously provides...
you can either be a trader by just understanding that your job is to put yourself into a position, on a consistent basis, that will put you in a situation where you can make a lot of money over and over...
or you can go work for CNBC everyday to talk about why the markets move and to try to figure out how traders like me make a lot of money after we have ACTUALLY traded the market and won onour own terms... you can earn a salary to do this, but it will be the same amount of money every week... just enough gas to get you to work so you can talk trash about the gladiators, the traders, actually in the coliseum that is the markets...
I will leave you with this:
"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcomin*g, but who knows the great enthusiasm*s, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievemen*t, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." - Theodore Roosevelt
have a nice day journo...
