Cold Traders

E

ELR

This pertains to any market, but the cold trader I am referring to is a stock trader.

Anyway, this individual who is a friend of a friend is just a really bad trader. Buys stocks at brand new highs, ok good. Takes small profit. When the stock has a big reversal, exits his long and goes short, then the stock goes back up!!!

I have noticed that when he is in a big losing trade (relative to his account size) and is not taking his stops, holding on...holding on....etc, when he exits the position, when he stops the pain, that is a good proxy for that stock going up (assuming he was long in the trade).

Question is whether this is something that can be traded as in when he exits a bad losing position, I take the trade?
 
What I really want to know is how this can be traded systematically, any suggestions? How to systematically figure out when he is cold, neutral, or hot. For instance 3 losing trades in a row = cold streak start.
 
Emotions.

When a stock is going up strong he just projects it into the future as a straight line, so he will go long. Sometimes the stock continues, sometimes they reverse and it is when they reverse and he is in a losing trade and exits the losing trade that the cooper works best.

I guess it is best to get some actual stats.

Quantify it, and if it looks tradable then I will trade it.
 
Quote from ELR:

Emotions.

When a stock is going up strong he just projects it into the future as a straight line, so he will go long. Sometimes the stock continues, sometimes they reverse and it is when they reverse and he is in a losing trade and exits the losing trade that the cooper works best.

I guess it is best to get some actual stats.

Quantify it, and if it looks tradable then I will trade it.
More...

Even if you have statistical analysis that you'll be profitable if you took the other side of his trades...

You will still need to have access to EVERY ONE of his trades in real-time that he makes. In addition, this has been tried before by others here at ET and there was even a trade journal posted here in the past to reflect the results.

All failed miserably and they were too naive to figure out how could they have "consistently lost money" by taking the other side of someone's losing trades. You're going to need to determine that answer by yourself before you continue with your hypothesis. :cool:

Hint: There's more to profitable trading than just trade signals.
 
Quote from southbeach4me:

ELR, why don't you just admit that the "friend of a friend" is actually YOU.
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Haha :)

Reminds me of the movie "Analyze This".

Paul Viti tells the shrink, "I have this friend.." The shrink says, "I think 'this friend' is YOU".

Priceless..
 
Quote from ELR:

Emotions.

When a stock is going up strong he just projects it into the future as a straight line, so he will go long. Sometimes the stock continues, sometimes they reverse and it is when they reverse and he is in a losing trade and exits the losing trade that the cooper works best.

I guess it is best to get some actual stats.

Quantify it, and if it looks tradable then I will trade it.
More...

I think I better option is just to look at his entry positions and see if you see warning flags. Depends on the frequency of his trading, obviously. That may or not be possible.
 
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