read this article on a forum upon which I lurk ....
I've NOT read the entire article, but from this excerpt I find that I'm too old and you are just entering the right age .....
good luck in your new trading career in beans/beets/beer
//////////////////////////////
The trader:
Title: An Analysis of the Profiles and Motivations of Habitual Commodity Speculators
Author: W. Bruce Canoles (Merrill Lynch Pierce Fenner & Smith Inc.) and Sarahelen R.
Thompson (University of Illinois at Urbana-Champaign) and Scott H. Irwin (The Ohio State
University) and Virginia G. France (University of Illinois at Urbana-Champaign).
Contact: thompsons@CES.ACES.UIUC.EDU
Comments: Type of Document - Microsoft Word; prepared on P.C.; to print on HP Laser
Jet; pages: 46. Office for Futures and Options Research (OFOR) at the University of Illinois,
Urbana-Champaign. Working Paper 97-01. For a complete list of OFOR working papers
see w3.ag.uiuc.edu
Keywords: speculation, commodity futures
JEL: G, G0, G1
EWPA-references:
Report-no: OFOR-97-01
Abstract:
The focus of this study is the habitual speculator in commodity futures markets. The
speculator's activity broadens a market, creates essential liquidity, and performs an
irreplaceable pricing function. Working knowledge of the profiles and motivations of habitual
speculators is essential to both market theorist and policy makers. Responses to a 73
question survey were collected directly from retail commodity brokers with offices in
Alabama. Each questionnaire recorded information on an individual commodity client who
had traded for an extended period of time. The typical trader studied is a married, white
male, age 52. He is affluent and well educated. He is a self-employed business owner who
can recover from financial setbacks. He is a politically right wing conservative involved in the
political process. He assumes a good deal of risk in most phases of his life. He is both an
aggressive investor and an active gambler. This trader does not consider preservation of his
commodity capital to be a very high trading priority. As a result, he rarely uses stop loss
orders. He wins more frequently than he loses (over 51% of the time) but is an overall net
loser in dollar terms. In spite of recurring trading losses, he has never made any substantial
change in his basic trading style. To this trader, whether he won or lost on a particular trade is
more important than the size of the win or loss. Thus he consistently cuts his profits short
while letting his losses run. He also worries more about missing a move in the market by
being on the sidelines than about losing by being on the wrong side of a market move; i.e.,
being in the action is more important than the financial consequences. Participating brokers
confirmed that for the majority of the speculators studied, the primary motivation for
continuous trading is the recreational utility derived largely from having a market position.
posted by:
gapandgo (7/12/01)
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