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Entertaining piece, but also reminds us of the risks associated with leverage.

Thanks for responding, Acrary. You are indeed correct. The initial drag simulations did not take into account the possibility of 'win-win' or 'all win' and 'lose-lose' or 'all loss' scenarios... in such instances, 'all wins' are large enough (due to compounding) that they equal the...

omg easyrider those MILLISECONDS ARE CAUSING YOU TO LOSE BILLIONS! :eek: :p

FaderTrader, while I can see your line of thinking, you make some assumptions that what works for you would work for everybody. That being said, of course we'd all like instant fills and less commissions, and minimized slippage etc. Hell, I want to be able to enter the market with whatever...

Thanks for the input, guys. I whipped this up last night around 3-4am. But totally agree with what's been said, namely that it's actually *cumulative* wins I meant. And indeed true that the way to maximize profit is to have maximize frequency of trading if you have positive expectancy...

We all understand the idea of expectancy: Expectancy = (Probability of Win * Avg. Win Size) - (Probability of Loss * Avg. Loss Size) Namely, over the long run, with positive expectancy, your average winners will be greater than your average losers. Now... how does this relate to money...

Wow. You are a true inspiration. Thanks for sharing your wisdom with us. Going to spend a few hours studying your spreadsheet now...

Oops forgot the attachment.

FINALLY SOLVED IT. Derived the inherent drag :P Lol.. common sense won out in the end... but it took a while to finally realize what was going on. In Acrary's proposed simulation, there was actually a negative expectancy - the avg. wins and avg. losses in the proposed simulation, as well...

Bringing this post back from the archives as Acrary mentions some shocking items that was previously untold of to me in this thread about money management, risk management, and effective position sizing. Hugely insightful. Up until now I had been using a % equity-risk based positioning...

lol To bring back an old thread, this topic has been on my mind lately. Since we don't know about their performance histories etc, for the sake of argument, let's assume that those #'s are their first year. So no history... who would you put your money with? Knee-jerk reaction would be...

how much exposure do you have to the market? how much of your entire portfolio are you risking per position? It can be ok to concentrate your efforts on a few good positions, as long as your risk stays low. I've often found that I'm usually in no more than 4-5 positions at a time, which...

As I understand it if there's no bid/ask then it's worthless and you can get a worthless stock letter from the broker to get it out of your account? Umm.. don't put all your money in penny stocks? Or sub-micro-penny stocks?

20, Seattle, WA; going to UW, applying for business school (finance) this qtr. Actively trading for 5mo. now, not consistently winning, but not losing much either due to a fair risk-reward money management strategy w/positive expectancy and effective position sizing. (2% portfolio risk/6%...

Yes yes many here have said it before.. not quite sure why we're all wasting time on this thread but it's like a bad trainwreck.. can't help but watch him crash and burn :P Anyhow, Mr. Double.. I think you should do well to memorize this chart: Loss of capital (%) Gain to recover (%) 5...

Smallfil you bring up a good point. For users of fundamentals it is a sad day when the financial statement you're looking at cannot be relied on. But I think no matter what tools you use, be it charts or financial statements or price and volume action, the market has the final say. I started...

You're definitely on the right track with your experiments. As far as your questions go, what works for me is... if you do decide to add to winning positions, buy on 'secondary buy signals', usually dips on low volume etc. Usually I enter with my full position and if I get stopped out I get...

I'm also interested in meeting some NW traders. I'm located in Seattle.

i second that.

1. Presently, what is your single biggest fear in life? It need not be limited to the trading arena. Fear of failure. Working all my life toward my dream and being unable to achieve it. . How, and to what extent, do you think this fear has either helped or hindered you? It's helped and...