How many accounts have you had access to, for to come up with this opinion, or are you just going on what you read on the internet
Prudent Risk Management Is The Only True Edge In TRADING
- Thread starter Buy1Sell2
- Start date
How many accounts have you had access to, for to come up with this opinion, or are you just going on what you read on the internet
Not trying to argue or contradict you, I just want to get a better grip:
So is your definition of risk management simply put a tight stop loss on all your trades? How tight is the stop? 1%? Also when and how do you take profit for if you "let profit run" and coupled with tight stops could most of your trades eventually turn into losses and become death by a thousand cuts?
Thank you.
Regardless how you feel about b1...this post makes a ton of sense.
Never risk more than 2% of Total Liquid Net Worth (TLNW) on any one trade/idea.
Stops are trailed outside noise. Take profit when there is an opposite signal or when stopped out. Your wins will greatly outstrip your losses.
I'll give you an analogy that also makes a "ton of sense" (I hope
). If B1S2 were an investor he'd be a buy and hold investor like my father. My father made large investments in the 1980's and is still holding these positions to this day. He's made a fortune even though he's held through many market crashes. My dad is following the concepts "the market goes up over time" and "it's how much time you're in the market that counts"...very sensible indeed. He believed nobody can beat the market and anyone that tries is a fool (market timing). My dad thinks in absolutes and so does B1S2.B1S2 thinks PRM is the only concept that works in the universe and anyone who bases their methodology on high probability entries is a fool and is attempting an impossible endeavor. My dad didn't think it's possible for anyone to have a more effective way to invest in the market than his...just like B1S2 with trading. My dad didn't believe anyone could have a formula that gets people out at market tops and allows them to buy back in at market bottoms, but I eventually showed him a methodology that does accomplish such a goal (although not perfect). It's based on inflation, PE's, and commodities combined with a scaling in/out technique (beat the market 9 of 10 yrs.). He thinks I'm a genius now, but I try to tell him there's plenty of smart people out there that have created savvy formulas (Jim Simons).
So why doesn't Simons, or the "Turtles", or Soros, or any of the "studs of trading/investing" just do BUY AND HOLD like my dad...which would be investing with a lot of sense? It's because other more effective methods exist...in trading and in investing. These guys don't want to hold through market crashes if they don't have to. Some of us traders don't want a lot of loses or large draw downs if we don't have to either!
I'm sure there are plenty of investors on this site who don't do buy and hold, even though it's more practical and sensible than what their currently doing (maybe more profitable), but to say there's not a more effective way than buy/hold is ridiculous! B1S2 saying his way (PRM) is the only way that works and everything else is wrong is just flat out ridiculous too! Just because B1S2 couldn't find a way to solve the high probability entry equation, he has to claim it's existence as pure fantasy. I made made money in the past with a risk management based method, but I couldn't quit my job and trade full time...I needed more...and got it!
Yep I agree with you as well. I think b1 is correct on allot of the stuff he says but I also believe he is wrong in his opinion there is only one edge. There are many ways to skin a cat as the saying goes. I go by the philosophy, everything works and nothing works, depending on the person.I'll give you an analogy that also makes a "ton of sense" (I hope
B1S2 thinks PRM is the only concept that works in the universe and anyone who bases their methodology on high probability entries is a fool and is attempting an impossible endeavor. My dad didn't think it's possible for anyone to have a more effective way to invest in the market than his...just like B1S2 with trading. My dad didn't believe anyone could have a formula that gets people out at market tops and allows them to buy back in at market bottoms, but I eventually showed him a methodology that does accomplish such a goal (although not perfect). It's based on inflation, PE's, and commodities combined with a scaling in/out technique (beat the market 9 of 10 yrs.). He thinks I'm a genius now, but I try to tell him there's plenty of smart people out there that have created savvy formulas (Jim Simons).
So why doesn't Simons, or the "Turtles", or Soros, or any of the "studs of trading/investing" just do BUY AND HOLD like my dad...which would be investing with a lot of sense? It's because other more effective methods exist...in trading and in investing. These guys don't want to hold through market crashes if they don't have to. Some of us traders don't want a lot of loses or large draw downs if we don't have to either!
I'm sure there are plenty of investors on this site who don't do buy and hold, even though it's more practical and sensible than what their currently doing (maybe more profitable), but to say there's not a more effective way than buy/hold is ridiculous! B1S2 saying his way (PRM) is the only way that works and everything else is wrong is just flat out ridiculous too! Just because B1S2 couldn't find a way to solve the high probability entry equation, he has to claim it's existence as pure fantasy. I made made money in the past with a risk management based method, but I couldn't quit my job and trade full time...I needed more...and got it!
There are many ways to pick entries and exits. All are known. There is no edge in picking entries and exits. The edge is in how trades are managed.