QuoteDislikedYou only need to make one big score in finance to be a hero forever
QuoteDisliked
Merton Miller
I recently stumbled across some quotes by Merton Miller and it got me thinking.
First let me say that my very first trade I went BIG! I traded 1 lot of crude oil and made a few thousand bucks in a few seconds. I knew I was going to be a HERO! In my first 3-6 months of trading I was trading between 6-12 lots of wheat, soybeans, cotton, crude and gold. In those days I would routinely have $10k days and never really experienced any significant losses.
Then I started to educate myself (I started trading in 2006 after having lunch with a hedge fund manager using only the advice he provided). I bought every book you could find and started tinkering with my entries and exits and I thought I was becoming a better, more professional trader. I stopped going for the big trades and started looking for logical places to exit. Suddenly I started losing. Not big losses because I educated myself to risk reward ratios, but I was losing more frequently as each day passed. I was dying a slow death by a thousand cuts! (to be fair, market conditions changed drastically between 2007 - 2010)
Ever since I have traded small with inconsistant success. Then this past week I came across this interesting statement by Merton Miller:
QuoteDislikedany state of affairs that will allow traders of any market instrument to create a riskless money machine will almost immediately disappear.
Now the light bulb in my tiny brain is glowing! I distinctly recall telling anyone who would listen back when i was throwing lots around with reckless abandon, that the Chicago Board of Trade (now part of CME) was my personal ATM machine!
Is it possible that the market provides short windows of opportunity, glitches in the matrix, that allow for "ONE BIG SCORE"? And if so, once the market (or the matrix) realizes the tiny window has been opened, does it quickly closes it and that state immediately disappears as Miller suggested??
I would be very interested to know how other traders feel about this concept.