Disillusioned

duard · Jul 20, 2006

When slalom skiing how hard you push is determined by boat speed, rope length, skier preparation (strength, tiredness-- number of runs for the day/week), and especially water conditions. If the water is choppy experienced skiers SAVE THEIR ENERGY for the appropriate conditions. Some days are crap. Skiing crap is a good exercise in honing skills as it is hard to do or do well or not get hurt but if you're a pro you wouldn't waste your effort and there is no chance in hell you're gonna win any medals or break any records. Know your market, trade when conditions are right. You wouldn't even consider 30 off @ 36mph in afternoon chop or sideways boat wakes, you'll just get hurt. So why would you wager hard earned money on a crappy set-up. But then again when the water's smooth and you've got your game on it's time to layer on some carefully applied risk.

Just an analogy.

vital-statistix · Jul 21, 2006

Quote from mokwit:

acrary once said "there are lots of edges. Just don't expect to find them in the Open, High, Low Close data."

.....

One of the best traders I knew only looked at the high and the low. Remember Darvas what he mentioned in his book?

vital statistix

Holmes · Jul 21, 2006

Quote from duard:

When slalom skiing how hard you push is determined by boat speed, rope length, skier preparation (strength, tiredness-- number of runs for the day/week), and especially water conditions. If the water is choppy experienced skiers SAVE THEIR ENERGY for the appropriate conditions. Some days are crap. Skiing crap is a good exercise in honing skills as it is hard to do or do well or not get hurt but if you're a pro you wouldn't waste your effort and there is no chance in hell you're gonna win any medals or break any records. Know your market, trade when conditions are right. You wouldn't even consider 30 off @ 36mph in afternoon chop or sideways boat wakes, you'll just get hurt. So why would you wager hard earned money on a crappy set-up. But then again when the water's smooth and you've got your game on it's time to layer on some carefully applied risk.

Just an analogy.

It ain't always necessary to wait for smooth waters, surfers wait for that real big wave to arrive, very patiently, and then try to ride the wave as long as possible.

So sometimes, although the water seems to be too rough at first glance, there may be some great opportunities.

Sherlock

niceneasy · Jul 21, 2006

surfing is a great analogy for trading. once you are experienced -you are ok with waiting as long as it takes for the right conditions. might never come.... when you are new - you chase everything and end up tired and frustrated. just like trading...

BCE · Jul 21, 2006

Quote from mokwit:

To earn more money, you must see yourself as capable of earning more money and worthy of keeping it. If you see yourself as a $24,000 per YEAR person, youâll NEVER earn and keep $24,000 per MONTH unless you see yourself as a $24,000 per month person."

Andrew Sarris, I think it was, from Fortune Magazine, interviewed some of the top hedge fund guys and asked them why they were focused on making such huge sums of money. He said that if he could make $100 million that would be plenty. And the guy he said this to told him that attitude was the very reason he'd never make $100 million.

I'll see if I can find the article.

2manywhiners · Jul 21, 2006

Quote from tireg:

As far as Risk Management/Money Management is concerned, as mentioned in the 'Edge' thread, Risk and Money management serve as magnifying glasses to amplify the results of your strategy or stop you from bleeding from deep cuts if your strategy has no built in edge or positive expectancy. They do not serve as a real 'Edge,' as they are a necessary part of a successful system. Yet no amount of risk management will stop you from dying the death of a thousand cuts if you don't have a profitable strategy. You'll just lose your money slower...

There is truth to your statements, yet I would not say they are correct, at least not in my opinion of what is anyway. Risk Management/Money Management are necessary parts of successful trading methods, but not because they amplify the methods result, but because Risk/Money Management ARE the system. They make up the core of any successful trading method or system. Without sound Risk/Money Management there is no positive expectancy. If a trader were to develop a trading model, one that didn't produce positive results and it was never based on sound Risk Management, introducing the appropriate corrections to that specific methodology's exposure to risk would either correct the faltering rules of the system or it would prove the methodology as being ineffective at its core.

TraderFred · Jul 21, 2006

Quote from 2manywhiners:

There is truth to your statements, yet I would not say they are correct, at least not in my opinion of what is anyway. Risk Management/Money Management are necessary parts of successful trading methods, but not because they amplify the methods result, but because Risk/Money Management ARE the system. They make up the core of any successful trading method or system. Without sound Risk/Money Management there is no positive expectancy. If a trader were to develop a trading model, one that didn't produce positive results and it was never based on sound Risk Management, introducing the appropriate corrections to that specific methodology's exposure to risk would either correct the faltering rules of the system or it would prove the methodology as being ineffective at its core.

Survival in trading starts with money management, no doubt.

mokwit · Jul 21, 2006

Dramatically skewed risk:reward profiles or you won't survive.

Cheese · Jul 22, 2006

There is always a lot of talk about risk management.

Simplistically, what is it? It has to mean that you stop out loss positions and don't oversize entries in relation to your deployed capital.

The key ingredient is never oversize your entries or total entries in relation to your trading capital.

If all or most of your trades are successful it pretty much puts risk management in the back seat. What it comes down to is the amount or proportion of trading you do which is unsuccessful (ie losses). The weaker your trading methodology the more important would be your risk management.

zdreg · Jul 22, 2006

Quote from BCE:

Andrew Sarris, I think it was, from Fortune Magazine, interviewed some of the top hedge fund guys and asked them why they were focused on making such huge sums of money. He said that if he could make $100 million that would be plenty. And the guy he said this to told him that attitude was the very reason he'd never make $100 million. I'll see if I can find the article.

shoot for the stars you get chorus girls. shoot for chorus girls you end up with nothing.