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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: aldrums who wrote (11925)	2/18/2001 7:20:09 AM
From: TraderAlan	Respond to of 18137

Alex, They call it dumb money for a reason. It's supposed to be a negative connotation. The money at the beginning of 2000 was extremely dumb. Folks were throwing money at the market with no plan or risk control. That's dumb money. They showed how dumb by holding for a bounce that never came and getting wiped out. Pretty dumb, huh? 70-90% of all traders fail. Many fail badly (lose a lot of money). Most of these folks have never bought a seminar, book or taken a seat in front of a teacher. They get their stock picks from buddies, tips, boards and spam. They treat trading like a trip to the race track, i.e. speculation without strategy. They know only one way of trading: upside momentum. They can't finesse a rangebound market, sell short with any skill or know when to get out of a flat position. Once again, it's a lack of understanding and perhaps experience to attack me for thinking that I don't know my audience. I know it extremely well. They are the ones who aren't dumb or are tired of being dumb. And they're not the ones who think playing with market definitions has anything to do with trading. They'd rather get on with it and make money. I'm also a trader and don't need to apologize to anyone for telling the truth about a classic market mechanism. It's called greed. The crowd is actually singular, not plural. IT has well-defined behavior that makes folks who are able to act outside of ITS influence very wealthy. Alan

To: aldrums who wrote (11925)	2/18/2001 12:54:55 PM
From: Lancer	Respond to of 18137

In the context of daytrading, maybe slow money is a good term. Those guys hanging there a bit too long at reversals probably aren't dumb, just a little slow. :)

To: aldrums who wrote (11925)	2/18/2001 1:52:58 PM
From: Jon Tara	Read Replies (2) \| Respond to of 18137

Aldrums is right. And Alan is right. "dumb" does carry an extremaly negative connotation, and IS bound to rub somebody the wrong way. On the other hand, it does have a very specific meaning in investing community. It's a shame to have to avoid using standard termnology because it may offend somebody. Keep using "dumb money", Alan. Just have a handy rejoinder ready to let your audience know that you are not calling them stupid. Now, maybe he doesn't need to use the term at all, because I'm still not convinced that the term really applies to trading. Although I have heard it used that way - a secondary, more-recent definition - I HAVE heard a lot of traders refer to new traders, or traders using the "random trade" methodology :) as "dumb money". But I really think that as used on the "street" the term ("smart money") refers to insiders, investment bankers, VC, fund managers, etc. Hey, is there some online dictionary where we can look this up? :)