Is Trading Ethical?

Need More Help? Book Your FREE Strategy Session With Our Team Today!

We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.

BOOK YOUR FREE STRATEGY SESSION NOW >>

Is it ethical to trade? 🤔 The answer to this question depends primarily on the personal conscience of each of us and the intentions and methods with which we operate in the financial world.

In this video, we will focus on the connection between ethics and systematic trading, i.e., working with automated strategies that buy and sell according to the characteristics and physiological dynamics of the market.

As you will see in the video, these strategies do not aim to speculate on specific events but follow the market movements regardless of their causes...

Want to learn more about this topic? Then watch the video now! 👀

Transcription

Why Do We Wonder If Trading Is Ethical?

Hello and welcome to this brand new video! One of the coaches at Unger Academy here.

And on my screen you can see the profit curve of a trading system on Crude Oil.

Its best performing period? February 2022, the beginning of the conflict between Russia and Ukraine.

This raises a rather provocative question: is it ethical to trade?

Well, we'll discuss this together, but before we begin.

So, this is an equity line or profit curve of a Crude Oil trading system coded about 5 years ago.

In February 2022, a year and a half ago, this system was in my trading system portfolio, and I used it along with other strategies in my personal account.

In the second half of February... Here we see that we are exactly at the beginning of February.

In the second half of February, this system outperformed along with many others.

I particularly remember that it was a Thursday, February 23, 2022.

And from then until the end of the month, we saw very good market movements in commodities, especially related to the energy sector.

And they all produced excellent profits.
But I remember that the same week, on February 23, 2022, Russia invaded Ukraine and caused a whole series of atrocities that only war can produce.

So is it fair to say that I am delighted with the gains I made during this period?

Or can we think that maybe these gains are a direct result of the deaths of thousands of people?

These are pretty serious issues, and I often think about them. So, I’d like to share with you some thoughts on that.

What Traders Truly Look For

So, first of all, what is the trader looking to profit from?
Mainly from market movements, but not necessarily to take advantage of crisis situations.

Trading systems, especially the ones we develop at Unger Academy, focus primarily on financial momentum and not on speculation during difficult times.

That means that a trader or a trading system we develop will never trade or buy stocks related to the war industry during the course of the conflict.

Neither will we use speculative strategies on energy and agriculture during a crises.

So, if a trader is making profits on moves that are related to problematic situations, it’s simply because their strategies fit well with market trends.

So, it’s essential to understand that what happens in trading isn’t the result of pure speculation, but of the global context in which we often find ourselves.

Trading During the COVID-19 Pandemic

Imagine, for example, about three years ago, in March 2020, the COVID outbreak created a particular situation.

There were a lot of short systems that would have generated many gains, especially in the stock indexes.

They were systems that were based on high volatility, so stormy market periods in the market, like the one in March 2022, because precisely that’s just how the market tends to work.

And we traders, who trade systematically exploit exactly these physiological behaviors of the market.

However, it must be said that in March 2020, I hardly had a single operation.

In fact, I suffered slight losses at the end of February because the market started falling on its knees and changing its behavior.

I was also very emotionally attached to the situation that was emerging.

I was pretty emotionally involved because Covid also invaded Italy, after China, and I lived in Italy.

This thing really made me shut everything down because I just couldn’t think straight.

I know the systems continue on their own, but it must be said that that period in the market, as my everyday life in that period, was absolutely not the best.

In addition to that, there were so many other considerations to be made regarding the markets. There were so many trading halts that were simply dictated by the markets when there was an excessive decline or an excessive increase that it was difficult to trade.

So, there were quite a few situations where, it was really impossible, especially for me, to continue my activities.

So in those cases, I stopped trading and resumed trading about a month or two later.

Ethics in Finance and Everyday Life: What's Considered Ethical and What Isn't?

Why did I tell you this? If it weren’t for the personal emotional involvement and some of the technical aspects associated with trading on the busiest days, you would have had to keep the whole business running to take advantage of the statistical benefits the market offers and continues to offer today.

So I think the line between what is ethical and what is not ethical is extremely thin.

And to expand the discussion a little bit, you could also apply it to the actions we take in our daily lives.

An example would be, let’s say, buying items that are generally cheaper than average that may have labor exploitation behind them.

Or if we stay in finance, we should ask ourselves every time where our banks invest our money.

For example, how is it managed, in what products it is invested, in what companies and for what purposes.

So the reality is I don’t think the world can be easily divided into good and bad. The ethics in our daily lives are reflected in all the decisions we make and the interactions we have with others.

The Ethical Aspect of Trading

So, I go back to the original question: Can we say that trading is ethical?

The answer of course is very complex and depends on the individual nuances and values that each of us has.

But what’s important is that we always need to develop some kind of critical and conscious awareness, that leads us to make responsible ethical decisions in the financial world.

Conclusion

Well, that's it for this video.
I hope I inspired you to think a little bit more about the ethics of trading and more generally, how we manage money.

If you have any questions or opinions you’d like to share, feel free to leave a comment below so we can discuss them in another video.

Then if you need help investing systematically in the markets, I recommend you click the link below.

In fact, this link will take you to a page where you will find some very useful resources. There you can sign up for a free presentation by Andrea Unger or you can get our best-selling book "The Unger Method" by covering shipping costs.

You can also book a call with a member of our team to get free strategic advice.

Finally, if you have not already done so, I’d like to remind you to subscribe to our channel and click the notification bell, so that you will always be informed about the release of new videos and new content.

Thank you also for the likes you leave us and your support to this channel.

See you soon with a new video about systematic trading. Until then, bye-bye!

Need More Help? Book Your FREE Strategy Session With Our Team Today!

We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.

BOOK YOUR FREE STRATEGY SESSION NOW >>
Andrea Unger

Andrea Unger

Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.

I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems. 

In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.

Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.

Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.