4 ms·

I know people who made millions day trading commodities, for no one in that cohort to have made any real money over two years is surprising to the point of disb

I know people who made millions day trading commodities, for no one in that cohort to have made any real money over two years is surprising to the point of disbelief. This may be something particular to the Brazilian exchange.

melling 7y ago
I’ve noticed a lot of successful traders trade commodities versus equities. What makes commodities easier to trade? Ed Seykota has been doing it for decades: https://en.m.wikipedia.org/wiki/Ed_Seykota https://en.m.wikipedia.org/wiki/Ed_Seykota
- Kranar 7y ago
  Commodities are generally harder to trade compared to equities. The reason successful traders do it is because you get access to much greater leverage compared to equities.
- reverend_gonzo 7y ago
  Leverage. You’ll quickly get big or go home.
- JackFr 7y ago
  No inside information on commodities. (However trading on embargoed government press releases is illegal. Though rather than kidnapping Clarence Beeks on the train, you can just interview the Florida farmers yourself.)
  - Macross8299 7y ago
    There is definitely inside information on commodities, it's just rare that insider trading on commodities is prosecuted. You would definitely have an advantage in trading oil/gas futures if you had access to ExxonMobil's seismic exploration reports, for example.
    - boulos 7y ago
      Indeed! I found Matt Levine's post last Fall [1], particularly useful, as he believed you couldn't be prosecuted for insider trading of commodities (only securities). Then he received a nastygram from the CFTC :). [1] https://www.bloomberg.com/amp/opinion/articles/2018-10-24/it-s-hard-to-be-an-insider-in-oil https://www.bloomberg.com/amp/opinion/articles/2018-10-24/it...
    - JackFr 7y ago
      Wow. But if Matt Levine can get it wrong too I don’t feel so bad. But the insider trading you suggest above, is predicated on having material non public information of ExxonMobil’s.
gnopgnip 7y ago
Many who make millions are risky and lose it all, or more. How many of them are net positive over more than a year?
- hn_throwaway_99 7y ago
  While I don't necessarily agree with Kranar's conclusions, I think his point is that the same can be said for many highly risky endeavors, like building a startup. IMO the main difference is that, while in both cases you'll see a small number of successes and a huge number of failures, in startup land the net expected value is positive while in day trader land it is negative.

melling 7y ago

I’ve noticed a lot of successful traders trade commodities versus equities. What makes commodities easier to trade? Ed Seykota has been doing it for decades: https://en.m.wikipedia.org/wiki/Ed_Seykota https://en.m.wikipedia.org/wiki/Ed_Seykota

Kranar 7y ago
Commodities are generally harder to trade compared to equities. The reason successful traders do it is because you get access to much greater leverage compared to equities.
reverend_gonzo 7y ago
Leverage. You’ll quickly get big or go home.
JackFr 7y ago
No inside information on commodities. (However trading on embargoed government press releases is illegal. Though rather than kidnapping Clarence Beeks on the train, you can just interview the Florida farmers yourself.)
- Macross8299 7y ago
  There is definitely inside information on commodities, it's just rare that insider trading on commodities is prosecuted. You would definitely have an advantage in trading oil/gas futures if you had access to ExxonMobil's seismic exploration reports, for example.
  - boulos 7y ago
    Indeed! I found Matt Levine's post last Fall [1], particularly useful, as he believed you couldn't be prosecuted for insider trading of commodities (only securities). Then he received a nastygram from the CFTC :). [1] https://www.bloomberg.com/amp/opinion/articles/2018-10-24/it-s-hard-to-be-an-insider-in-oil https://www.bloomberg.com/amp/opinion/articles/2018-10-24/it...
  - JackFr 7y ago
    Wow. But if Matt Levine can get it wrong too I don’t feel so bad. But the insider trading you suggest above, is predicated on having material non public information of ExxonMobil’s.

gnopgnip 7y ago

Many who make millions are risky and lose it all, or more. How many of them are net positive over more than a year?

hn_throwaway_99 7y ago
While I don't necessarily agree with Kranar's conclusions, I think his point is that the same can be said for many highly risky endeavors, like building a startup. IMO the main difference is that, while in both cases you'll see a small number of successes and a huge number of failures, in startup land the net expected value is positive while in day trader land it is negative.