A Discussion on Trading

What was your first memorable experience trading? What was your motivation behind it? Overall was it a negative or positive experience? Give us a brief history and some instances.

ie; Sports cards, pogs, hot wheels..




This is a discussion of trading before 'grown-up' monetary goals. The reason for this is to understand how we trade and why we do by breaking it down in to the simplest form.. understanding instinctive trading habits that were formed.

I just finished watching Mind Over Money by NOVA.

anyone?

When I was about 7 years old I started collecting baseball cards.

I wanted to get really good cards of my favorite ball players, and to get them I had to buy lots of different packs. Eventually I had thousands of cards. I had a subscription to some sort of monthly magazine that listed all the cards that came out during various years, listing their previous value and their current value.

Depending on the brand, the player, and the rarity of the card, the values would fluctuate. I decided I might be able to profit off of the fluctuations by trading and selling the cards, so my mom helped me set up a card table in the front lawn, and I set up shop so that I could sell cards for more than they were worth as well as trade and buy cards that were undervalued from anyone who had cards.

Too bad nobody stopped by my table. Eventually I made a bad trade by selling a Sammy Sosa rookie card for a couple of dollars to a sneaky looking man in a baseball card shop.

Not sure if this story fits with the theme as it does involve money.

My motivation was a fascination of the way cards' value would fluctuate and I thought I could make money.. (which I didn't)

I was fortunate/unfortunate enough to be up late one night and spotted an infomercial for 4X Made Easy. This was the first time I'd heard of trading currencies. Although I had dabbled in stocks, I never really caught the bug until that fateful night.

I downloaded an FXCM demo and realized that the quickly moving quotes were of no help. And frankly, very intimidating. It wasn't till a few months later that I got my hands on an MT3 demo. This was much more intuitive, and I liked the idea of having a chart to look at. Keeping in mind that in 2002 places like Forex Factory and all the other resources available now were completely unavailable online.


Anyways, long story short:

A few days into playing with my MT3 demo account I put a position on the USD/CHF, and ran off to do a few things.

By the time I had opened up the demo the next day, I had earned approx $1K on an initial starting demo balance of $2K. Once I saw that... I caught the bug and obsessed over the market for many years to come.

Unfortunately for me, that unrealistic and lucky 400:1 bet set a terrible precedence in terms of realistic returns. I spent the next few years trying to replicate those kinds of gains without success. Needless to say, it cost me thousands of dollars worth of blown live accounts, and even more in health and mental stability.

However, I'm pleased with the way things worked out. The market and I are extremely close friends these days, and we share a mutual respect and understanding for one another.

Not sure if this is exactly what you were looking for, Emerald... but that's all I got.

Great story frankkn

I had a very similar upbringing and I believe the pricing magazine was Beckett. I had (still have) a large card binder in which I'd sort my cards in order of value, checking the prices very other day. Not very good to be handling cards all the time, but I didnt know. lol
It wasn't until around 8th grade when I started getting serious in buying a McGuire rookie card at its all-time high as he was going for the HR record and selling it when he broke the HR record in '98. Of course in the end I lost more than I profited.

Overall my experience was one of enjoyment because I liked sports and following atheletes while visiting card shops frequently.. and I know what you mean, they're the dealers!

I hear ya there.. overleveraged gains seem to leave you wanting more. Did you have any adolescent experiences with trading materialistic items before your introduction to FX?

You know oddly enough, I didn't. I've always been motivated by the idea of generating wealth, but for some reason never had those types of bartering skills.

I'll add my first here; Pogs were my first trading experience while growing up in California in the early 90's and the foundation of my endevors following them.

What I wanted (higher percieved value): Ones that pleased me (could be shiny or have a skull), ones of favorite sports teams, 'expensive' looking slammers.

What I didn't want (lower value): Girly ones, cheaply made ones.

My motavation was to "collect them all", a phrase which pokemon later used to cash in on. I remember wanting to buy more pog holders to show my cousins how many I had.

Overall experience was positive.. I did not know how much allowance $ I spent, but I gave these materials value.

I take it you never frequented moneytec or elitetrader back in 02?

I used to collect Star Wars and Empire Strikes Back cards when I was a kid. I got started in 1977 or so when there would be a card in the Wonder Bread. I think I still have those somewhere. Anywho, I had collected all of the 1st series of Empire cards the hard way.. one pack at a time at .25 a pop. My allowance was $1 a week so I'd get 1 pack of cards, 1 pack of Hubba Bubba bubble gum, and the last 2 quarters went to the arcade.

Anywho, I was only missing one card to complete the set and I got sick of spending a quarter... sometimes 2 to get a pack of cards I already had. The market was pretty tight and I had already traded my duplicate cards to everyone else and now there were quite a few of us hunting for that elusive card. I had essentially created a local inflation scenario almost by myself.

One day I was at the hardware store with my parents for a going out of biz sale. On their meager toy/kid aisle they had full box sets of the Empire cards. I was so pissed that they would sell full sets and that some spoiled kid could get them all the easy way whereas I was devoting 25% of my weekly income doing it the hard way. Apparently someone else was pissed too because one of the boxes was open and a bunch of cards were missing. Luckily the one I needed wasn't missing. So I stole it. Call it insider trading, call it fraud, call it what you will... but I completed my set. And I felt like shit about it and I retired from card collecting forever.

Weird.. just sitting here typing this I still feel like shit for stealing that card and that was 30 years ago!

How about something of value to you which was worth less to others?

ah the desire to complete your collection. Glad you came out on top and I'm sure there were others that did similar.

I was just here pondering how to describe the correlation between cheating then(kids) and now(market trading).. all while trying not to type any illegal doing.. but you started it. lol. During my card bartering phase, I wanted a certain old rookie card so I saved up and purchased a case of vintage card packs. Upon opening them all I found nothing of worth.. so I glued them back up and resold them. Since I was a teen and knew everything, I didn't need to double check my work.. until someone found a wrong year card in their pack... [guilt trip] haha

Back when Yugio and Pokemon were the rage, my mom had a small costume store. The previous tenant of the pad was a card seller/buyer/dealer and kids kept coming by asking about cards. My little sister worked the counter and got the idea to enter that card market since it was generating more traffic than the costumes were. Also, she was quite adept at market values on those cards being a collector herself. So my mom's shop started dealing in collectable cards and started making some decent coin.

The funny part was all of these kids trying to pull one over on my sister. She doesn't put up with crap from anyone and you'd be hard pressed to ever get an edge over her when trying to bargain. She's wasn't bitchy about it.. she just drew the line and stuck to it. She developed quite a reputation among the collectors and dealer shops in the area as a fair dealer. But it worked both ways. She wouldn't take advantage of people either. I think she was 13 or 14 at the time. haha. She's doing some real estate stuff now but I think she'd do better in financial markets. Not so much trading but brokering or mediating big deals.

About cheating... I absolutely abhor cheating and get pretty f**king pissed off when I'm accused of cheating be it poker, whatever.

But it wasn't always that way. My best friend in jr. high and I used to play monopoly with real money, poker, chess, paper/rock/scissors/whatever else we could think up to satisfy the competition bug and also the betting bug.

One time he was over at my place and we were playing 5 card draw. I made up some weird story about why I kept dealing weird. 2 cards to him 1 to me, 3 cards to him, 4 to me, etc. I was using an old deck that belonged to my grandpa that had some bent corners. Ironically (purposefully?) those were all face cards. I cleaned my buddy out and then he figured it out. He didn't' get mad. He just stared at me in utter disbelief that I would do that and then left. The look of disappointment still haunts me. That pretty much ruined the trust and the friendship. I was 14 at the time or so and we hardly spoke for the next 6 years even though we were always around each other for other stuff. I don't think I"ve cheated at anything ever since.

I have a bit of a different background. I grew up in an agricultural environment. The first recollection of "price quotes" are those of live cattle prices which were published in the local newspaper. Perhaps that taught me something about supply and demand.

I also remember being interested in the DJIA quotes which were on the local TV news every evening. At the time I really didn't know what the DJIA was but it was interesting.

I was once told by a female companion that "you're way too complicated for me" and I'm still trying to figure out what that meant. I'm probably a psychologist's worst nightmare or best source of income though I've never been to one.

As some old song says "I've looked at life from both sides now". When I was in my early twenties I flew to Toronto from the Midwest for a first 'business meeting' and realized that "these people are different and will eat you alive if you let them".

I won't let them.

well i loved to play monopoly with my friends when we where kids , its not quit trading but it has some related stuff towards trading , psychology .. mindset etc..


well what i did was to trade streets, etc.. and negotiated deals.. etc. with everyone.. just to come out ahead in the end.. i even intervene into deals two other players made .. just to get an advance out of the deal later when the time has come....

man i was a crook .. played all sorts of psychology tricks.. back then.. that was fun... if everything worked out as planed of course.. but playing with all players and there characters/mindeset or outplay them was fun...


kinda like selling toxic debt packages.. or trading them against someting with more value.. ... just to buy them back if the other party is broke... etc...


hmmm.. but as a retail trader .. this wont come in handy .. (for now) ...


but in the end i always loved the idea to buy low and sell high.. i am a born merchant/dealer/trader .. i knew this since iam 10 years old...

entering the trading arena was just a mather of time ... and that was when i was 21 ... as a former co worker .. who made a small fortune back then with trading options but lost everything (he never really got over it) introduced me into the wonderful world of trading...


so here i am..

Cool post PrymeTyme. I kind of want to play Monopoly now since you gave me tips. lol

I'm sure you also used the power of compounding with the more properties you purchased.. when you weren't legally robbing the poor.

I played an MMO that had a free market in highschool. In the game crafters would provide items for players to purchase through an exchange(auction house). Crafters had to compete with others to profit. Supply/demand controlled prices. When there was excess supply crafters would undercut each others prices offering discounts to buyers in order to sell first. Buyers would typically underbid items in the hopes of getting a discount when there was excess supply. There was no way to see what the sellers prices were. There was only a price history of sales to go by. Most people would play the game for the adventure aspect of it. I preferred to do what I called "Camping the auction house". At several points in time my character was essentially without gear and this was all I did in the game. The system was very deep so it attracted some interesting people. I remember having a friend who would record several thousand samples of crafts trying to find out if certain actions would effect your %win rate.

Being a crafter in the game meant I had to study recipe lists for several hours calculating profit ratios and going about finding edges over other crafters. I had to learn to manage risk around win rate variance. The only way to profit on most items was based on a %win rate at 2% 10% 30% or 50%. The most profitable ones required you to endure the brutal variance of a 2-10% chance to profit. The items that we're profitable without variance were tough to find since the market was so competitive, you had to do your homework to find them. I would search for oversights by the game developers in order take advantage of opportunities where items could be created cheaply and sold back to non-player merchants for profit. I would take into consideration that some items had more liquid markets than others when it came to offloading large amounts of items without having to discount. I'd directly compete with other crafters for raw materials to make items and would constantly look to edge them out to get a corner going on certain items. I would regularly use tactics like buying out other crafters items to dry out supply and resell their and my own items at higher prices when I expected demand to spike. I every week I would buy out a certain item on Thursday then wait for demand for the item to spike over the weekend. Then I would resell into the higher demand at higher prices as the weekend hit unloading my inventory. I spent more hours than I'd care to admit doing this stuff but I really enjoyed it.

Oddly enough by the time I quit the game I was pondering doing things that are similar to tactics used in real exchanges. I considered Cross server arbitrage to take advantage of items selling cheaply on one server and double the price on another. The "crystal" market in the game was also incredibly liquid and I thought of taking advantage of price fluctuations that occurred. I was also watching how the in-game currency would deflate/inflate as the developers tried to balance the money supply of game currency into the game economy. I was a huge nerd for that in-game economy LOL. I would frequently say the only thing keeping me playing the game was the economy.

I finally quit the game when I was talked into taking exposure from a friend who had a much higher tolerance for draw down. My risk capital as I called it back then took a 30% hit in a single day(an entire months work). It really sucked and I felt horrible because it took real tedious work doing this stuff. The worst part was that I was going to have to sell non-profitable items back into an illiquid market meaning I would have offer a considerable discount on my prices or wait months to get the initial 30% loss to a 20% loss. So I said fuck it and quit the game.

Although I didn't realize it at the time I had learned some very valuable lessons in that game that were relevant to trading.

SALTY BISCUITS TACT1CAL, +1000000 IF THIS WAS PROJECT ENTROPIA/ENTROPIA UNIVERSE.

That post describes my experience with trading perfectly. Couldn't have summed it up any better. Very interesting concept behind the game, using a real cash economy and a free market - that is if we are indeed speaking of the same one.

Regards,
xXTrizzleXx

my first memorable experience in 'trading' was selling console and pc games on ebay. I would buy them wholesale in bundles and sell for profit. I did this for 5-6 months and I would get $25-$50 total profit on each bundle.

Then I saw those late night informercial on forex. Prior to that i never been involved in any financial market.

i remember i was so damn excited when i made $17 dollars trading usdjpy that i called my fiancee then and told her how 'easy' it was. I was so delusional...

After reading the book Orderflow Trading (yet again ) by Darkstar here on FF, I've decided I would bump this thread up and maybe get more responses.


I forgot to say what a great post that was, Tact1cal! Knowing what we know now, you were playing the (financial) game the way it was meant to be played!

That's funny Hilmy.. in the beginning I lusted over the markets bc of how 'easy' it was too. Ah if I knew what I know now...