Did Robert Hoffman really lose 312K in a single TF trade? Yikes!

Quote from EPrado:

I agree a 2 yr good track record is enough to say that one is a good trader. But, within that track record you have to look at a lot of things. The size of your winning days vs losing days to me is the most important. If people just looked at his numbers without knowing the kind of risk he took (risking 100k to make 1-3k........horrendous), then they could have been fooled very easily. Myself, if I saw a guy who had 15 mos of small winning days without a losing day, I would ask a lot of questions. First being what size does he trade/what's his biggest position. That will tell you right away that he is a loose cannon/average down guy.
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Yes and no, you would have to break-down the strategy, not just look at the biggest drawdown. Take a guy that started in 2004 selling way OTM options on the equity markets, levered to the max. For three years he may not have had one losing trade and had solid returns. Then 2008 hit...
 
Quote from joneog:

Yes and no, you would have to break-down the strategy, not just look at the biggest drawdown. Take a guy that started in 2004 selling way OTM options on the equity markets, levered to the max. For three years he may not have had one losing trade and had solid returns. Then 2008 hit...
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Good point.

To me though, if I saw a guy who did not have one losing day in 15 months, it would set off red flags big time. No real trading firm/hedge fund would hire a guy like that. The firms I worked for/know of want to see what happens to a trader when he takes losses. A guy that hasn't taken a loss in that long a period either is a huge scale down trader, or is holding any losing trades as open trades/refusing to get out. Either way they are a disaster waiting to happen.
 
I am very sure that during the course of the 2 years of "no loss",

a significant number of traders in his room will get wiped out, however

it is still the minority, and like any service, there will be ppl who make money and ppl who don't, so the ppl who make money continue to promote him.

Also, it is easy for many ppl who has been with him so long to think that "This guy actually has the holy grail. This is how u shud trade, markets mean revert and this guy knows where it will bounce"..

I mean, after seeing him take no loss for so long, it is very easy for many newbies to just wanto follow him blindly..


LOLOL
 
Quote from EPrado:

Good point.

To me though, if I saw a guy who did not have one losing day in 15 months, it would set off red flags big time. No real trading firm/hedge fund would hire a guy like that. The firms I worked for/know of want to see what happens to a trader when he takes losses. A guy that hasn't taken a loss in that long a period either is a huge scale down trader, or is holding any losing trades as open trades/refusing to get out. Either way they are a disaster waiting to happen.
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Agreed, most people can be good winners, a lot tougher to deal with the (multiple) losers.
 
Quote from EPrado:

Yes. VN's strategy was exactly the same as Hoffman......and VN blew up twice. Was very predictable. The problem is, it's very tough for guys like Hoffman and VN to change their ways. VN blew out, came back later, did the same thing and blew out again. If Hoffman reloads his account, he will eventually blow out again. It might take a while, but he will.
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I know several cases first hand. They get imprinted like ducks after winning for maybe 2 or 3 years. Leeson went through several billion that way too. It's a waste of time explaining it to them. They can and do win 90-95% of the time. In fact 99% of the time can be built too, still loser at the end.
 
Quote from EPrado:

Good point.

To me though, if I saw a guy who did not have one losing day in 15 months, it would set off red flags big time. No real trading firm/hedge fund would hire a guy like that. The firms I worked for/know of want to see what happens to a trader when he takes losses. A guy that hasn't taken a loss in that long a period either is a huge scale down trader, or is holding any losing trades as open trades/refusing to get out. Either way they are a disaster waiting to happen.
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A pure arb'er or a guy using multiple strategies across multiple instruments can have this kind of results, but a mentor trading a mainstream overcrowded contract like TF, no way...I would be interested to know how consistent the best TF traders are. I suspect they may still lose one day per week or so.
 
Quote from TraDaToR:

A pure arb'er or a guy using multiple strategies across multiple instruments can have this kind of results, but a mentor trading a mainstream overcrowded contract like TF, no way...I would be interested to know how consistent the best TF traders are. I suspect they may still lose one day per week or so.
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Fair enough, but during the 87' crash some of the index arbs took a big hit and during summer 07' and throughout 08' a number of the big stat arb guys suffered big losses. (although the latter aren't pure arbs)

Even the most advanced quant funds can show profit day-after-day for years and suffer a blow-up. If MIT PHDs can blow-up what chance does a guy in a chat room averaging down have?
 
Quote from joneog:

Fair enough, but during the 87' crash some of the index arbs took a big hit and during summer 07' and throughout 08' a number of the big stat arb guys suffered big losses. (although the latter aren't pure arbs)

Even the most advanced quant funds can show profit day-after-day for years and suffer a blow-up. If MIT PHDs can blow-up what chance does a guy in a chat room averaging down have?
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My point exactly. These firms have at least legitimate steady gains even if they may blow up in some rare events. This guy averaging down had just a short term loan to the market.
 
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