shorting the jumping cat

Quote from inandlong:

Nothing wrong with being wrong.

:)
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For a trader, there is certainly nothing wrong with being wrong.
But, with all due respect, there is EVERYTHING wrong with STAYING wrong. Now, CAT may fall like a brick from here for all I know, but I see a short postion that started with the stock around $66, and it's currently about 7 points higher. From my perspective, the chart looks pretty healthy. There may be a ton of fundamental reasons why CAT should be going down, but for now the market (read: BOSS) doesn't agree. Just curious what your time frame and ultimate price objective to cover this short is, and, objectively, how likely you feel this is to occur given the reality of what the market is saying about CAT?

Not trying to be a wise-ass, just trying to play "devils advocate".......
 
Quote from mr roboto:




For a trader, there is certainly nothing wrong with being wrong.
But, with all due respect, there is EVERYTHING wrong with STAYING wrong. Now, CAT may fall like a brick from here for all I know, but I see a short position that started with the stock around $66, and it's currently about 7 points higher. From my perspective, the chart looks pretty healthy. There may be a ton of fundamental reasons why CAT should be going down, but for now the market (read: BOSS) doesn't agree. Just curious what your time frame and ultimate price objective to cover this short is, and, objectively, how likely you feel this is to occur given the reality of what the market is saying about CAT?

Not trying to be a wise-ass, just trying to play "devils advocate".......
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No! IMHO... you're not being a wise-ass! And I've posted similar devil's advocate posts about trading discipline, but seemingly ET does not want to have those posts if they are the LEAST bit sarcastic or assertive. However, I do not consider them in the "crapola" arena..... and in fact posts like yours' and mine earlier on this thread... and others, are in fact valuable input, and ought to be seen as such.

To publicly post that a trader is stubbornly seeking to pick a top in CAT... IS... something that other traders on ET... who care enough to offer a humble opinion based upon their own history with such things.. can and should do and be allowed to. It should also therefor be viewed as valuable input to call into question this (seeming) lack of discipline in not exiting but rather averaging a loser by adding on... a violation of a cardinal rule to many veterans!

provided it's done in good faith!!!!

The moderators ought to see it that way, also!

After all many times this peer 'criticism' comes from traders having violated such rules themselves.. and having their head handed to them; thus they are merely urging another (i.e. the originator of this thread) to be cautious lest he too crash and burn (needlessly)!

There is always time to short a top..... once in place... for example, subsequent to a key reversal day with confirmation! When CAT has such a pattern .... I would consider jumping on it... not before.

If not, what will happen eventually on ET, is the blind will be leading the blind, and anyone who has a valid opinion/criticism coupled with good trading experience to back it up... (although he or she offers such in a seemingly "tough love" commentary format) will be dissuaded from bothering to participate in any such discussion (s).

Comprendre?

ICe
:cool:
 
...lack of discipline in not exiting but rather averaging a loser by adding on... a violation of a cardinal rule to many veterans...

Dear ice,

I see your point.
I started this posting, so I will give all the updates on this trade. This is how I do it. Have been trading for more than ten years, and still in the business. Although the CAT trade is in the red zone at the moment, my account is almost at all time high. For the last 9 months triple digit in the plus.

IMHO I wouldn't be there if I would always cut my losses. IMHO there is a big difference between averaging on the long or the short side of the stock market.

Some question:
Do you know if my portfolio is overall long or short at the moment?
Is cat a stock like UTSI or Jcom?
Is there a cardinal rule to success in trading?
Can someone go down the tube by always cutting his losses short?
 
......lack of discipline...

you are right. I lack discipline. I tried very hard in the futures some years ago. Always cut my losses very quick. In the end I had very high transaction costs, lots of slippage and almost no performance. Overall I was emotional very depressed. Stops tend to be filled and I often felt that I was being eaten alive.

So I learned to trade without discipline, maybe like an idiot, a rulebreaker and this is a way for me to be emotional more satisfied.

To protect myself, I use a lot of spread and some kind of market neutrality in the overall portfolio.

Can resist, just shorted some Volkswagen(VOW) right now on Xetra, and yes no stop loss.
 
Quote from heilbronner:

...lack of discipline in not exiting but rather averaging a loser by adding on... a violation of a cardinal rule to many veterans...

Dear ice,

I see your point.
I started this posting, so I will give all the updates on this trade. This is how I do it. Have been trading for more than ten years, and still in the business. Although the CAT trade is in the red zone at the moment, my account is almost at all time high. For the last 9 months triple digit in the plus.

IMHO I wouldn't be there if I would always cut my losses. IMHO there is a big difference between averaging on the long or the short side of the stock market.

Some question:
Do you know if my portfolio is overall long or short at the moment?
Is cat a stock like UTSI or Jcom?
Is there a cardinal rule to success in trading?
Can someone go down the tube by always cutting his losses short?
More...

Then why are you defending yourself? Seems like you got all the answers you need... so trust your instincts! But when you post on a public trading forum you should expect to get feedback.... pro and con!

PERIOD!

No ego bro... we are all in this together! :p

Bonne chance!

IcE
:cool:

p.s. you aren't really saying that averaging a loser is something that you do often... ???! But.. if so, and it works.. bravO!
:eek:
:eek:
 
Quote from heilbronner:


Can someone go down the tube by always cutting his losses short? [/B]
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I can only think of 2 ways:

1. If your method has no edge. (As a trader, it's your job to KNOW if your method has an edge. I think Mark Douglas said:
If you don't know what your edge is, you don't have one)

2. Assuming you DO have a method with a proven edge, the only other way to go broke taking small losses is to not have the discipline to let your profits reach their potential. I think this is the most insideous danger most traders face. We all know the "cardinal rule" of being disciplined enough to take small losses and protect our accounts, but I think in some ways, it's even harder to sit on a profit and let it reach potential. Especially if you've recently incurred a slew of small losses by honoring your stops. The temptation to be satisfied by just making back some of those small losses can be overwhelming, and rob you of the profits that define your edge.
 
Quote from heilbronner:

......lack of discipline...

you are right. I lack discipline. I tried very hard in the futures some years ago. Always cut my losses very quick. In the end I had very high transaction costs, lots of slippage and almost no performance. Overall I was emotional very depressed. Stops tend to be filled and I often felt that I was being eaten alive.

So I learned to trade without discipline, maybe like an idiot, a rulebreaker and this is a way for me to be emotional more satisfied.

To protect myself, I use a lot of spread and some kind of market neutrality in the overall portfolio.

Can resist, just shorted some Volkswagen(VOW) right now on Xetra, and yes no stop loss.
More...



Oh cool. It's nice to read from someone who has been in the game for ten years and whose views differ significantly from the generally accepted trading wisdom. Hope you keep posting.
 
update: stock short position almost in the green.
options, strike 70: in the green
options, strike 65, so far in the red zone, but overall option positions in cat in the green so far.

Overall portfolio: all time high!!!!
 
Legg Mason just came out with a downgrade.

Do you know what it means when bank says: Hold????
Do you know what they have been doing before making it public??
Do you believe in chinese walls and honest bankers?
 
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