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What many of these studies rely upon is the law of diminishing returns. Simply stated, it says that each person's utility curve flattens out as income increases. The concept of utility can best be explained economically through eating pizza. When one is starving the first slice of pizza...

You are still missing a big part of this. Let's say you have 10 systems. And the performance is the same on all for the sake of simplicity. Avg annual return of 30% and avg drawdown of 15%. Here is the problem. And let's even say that you NEVER exceed a 15% drawdown. Who is to say you only...

Keep your pants on King, weekend ain't over yet. :)

Have you heard the story of the guy who drowned in a river with an avg depth of 6 inches? "IF" if you have a profitable trade system, and that's a big "if" because no one really knows till after the fact, then you have to take ALL the trades. The worst thing you can do is cherry pick the...

Don't sweat it. I bring out the best in people sometimes. Just ask Don Bright.

Right in that way we are ALL market makers. I put out offers by appt as well. :) My comments were geared towards the idea that any bank is stupid enough to tie up obscene amounts of cash to engage in a business with no edge by making two way markets in GOOG. LOL.

TJ, are you going to leave me hanging?

Yeah man of course! I took that EUR/JPY trade for size and it blew me into a thousand pieces. Never saw so much red in my life. Good Lord man. Are you going to reimburse me for that? That was one hell of a stinker. It just kept going and going and going. I begged for it to stop. I...

I think we are disagreeing on semantics here. If your "definition" of trading is simply improving someone then shit, yeah OK. Hell, by that definition if I show someone how to place a stop order I've taught them to trade. When these questions get brought up on ET, they are usually in the...

I wasn't responding to you, I was responding to newwurldmn.

You obviously have never made a market in options before. Our biggest losses on the floor were quoting wide markets. Our DPM lost 1 million in a single day when NSOL popped 100 pts intra-day. We were making dollar to 2 dollar wide markets in options that were normally 1/4 to 1/2 pt wide...

Options....yes. Structured products....yes. Shares of GOOG.....no. Dark pools of liquidity (where 100k shares of GOOG gets posted)is crossed internally with another customer. That is not the same thing as sitting on a bid or offer on GOOG. Shit, would you do that newwurldmn? Of...

The vast majority of banks are NOT making markets. Banks trade structured products. They are not putting up bids and offers on GOOG. Quoting a wide market is very different then no market. Ask anyone who was looking for liquidity during the flash crash. If I don't HAVE to make a market...

Uh....no. Market makers were REQUIRED to make markets. HFT's are NOT. That is a BIG difference. In fact, it makes the entire comparison moot.

No, you can't teach trading. I've been doing this for a long time. I've been on the floor, prop, retail, etc. What you CAN teach is an edge. When I was on the floor my market making firm "taught" me the proper way to make a market. I learned synthetics, put to call parity, etc. When I was...

BTW, this weekend I'm going to write a short novel on here about ACD and currency trading. Stay tuned...

Do you know how I got over that? Number lines. That's the beauty of the number lines. They give you the confidence to play the bigger move. There are breakouts with flat number lines. There are breakouts with negative number lines. And then there are breakouts with confirmed number...

When does the model blow out of this trade?

Anyone else watching this EUR/AUD? Rocket ship. To the moon Alice!

VX futures breaking out. ES working on that monthly confirm. The 1725 level is in sight.