As I browse through the AEI-Brookings Joint Policy Markets compendium (which is fantastic), I feel like something is missing. Namely, an insider's view. Who are the players who create the data and fuel the pricing mechanism that these many esteemed professors are publishing about? What are these people really like? More importantly, what common drivers bring the thousands of TS customers to the market to trade?
Not having researched it, but having instrospected and experienced and communicated with other traders in the Pit and Forum, I think I can boil it down to two primal drives:
1) The need to win. TS is not so much a place where people want to make money--there are other ways and places to make more money, with better historical odds. Money is important, though, because it is the final scorekeeper, whether someone trades one or one thousand of a single contract. At any trade size, each person who takes risk wants to know that they can be a contender, that they can enter the arena and prevail. And it is a contest of intellectual strength. Can I make more calls than the other guys, can I get better risk adjusted returns, can I be in the minority who can steadily grow their account, can I manage risk and save myself from losing it all? Whoever survives proves to be the fittest. As with anyone who sees the relevance of Darwin's thoughts on natural selection, TS is no place for someone who thinks affirmative action breeds strength. Rather, win, or die trying.
2) The need to be right. An even higher aspiration than wrestling with one's fellow man, there is something in each one of us that wants to be able to predict the future. To see farther, to understand more, to know Truth. If we can make the call to go left vs right, to take the shortcut, to go for it on fourth down, to see the incoming missile and get to cover in time, we can save ourselves and our loved ones. We'd be qualified to lead others to safety, and even to the Promised Land. And this need, to be proven correct, helps to explain the dialogues in the Pit and Forum, and why they get a little testy at times.
I concede that there is a dark side to trading: it's gambling addiction. There's a dark side to winemaking: alcoholism. There is even a dark side charity: enabling codependency.
But let's all celebrate the quest for victory, and for transcendence. And appreciate the futures markets that help us realize both aspirations.