Steven Cohen's trading results

[Hydroblunt]

Quote from gnome:

It's rather amazing.... the *only* thing a trader can really control is the size of the loss. Yet, not "avoiding large losses" is what eventually brings most traders down.

I don't buy it, most traders get bled to death.

Small losses, few bigs wins, that is a simple computer program that could do that. Why not not just make random entries with a set stop loss and a trailing stop loss for winning trades. Hey I think I found the holy grail.

Get real guys, the game is more complex than that. Even with a discretionary trader cutting his losses tight 90% of the time, it is impossible. The winning moves will simply get smaller once too many ppl start doing it and the majority will just get churned to death. It's been going on for a few years already, it's not the big losses, it is either the lack of big enough moves for the wins or the slippage & rate of churn that slowly bleeds traders.

It's all about entries & exits because with proper entries you will get in where accepting you're wrong will cost you little and you will not get shaken out. With proper exits you will take your profit where it is high enough where it is very economical to have 90% losing trades.

I'm not preaching big losses or doubling down but this small losses theory has been preached by prop shops for a long time. All that happens is that new guys struggle for months taking a bunch of small losses while the prop firm collects commissions till the new guy is slowly bled to death. Been there, done that.

P.S. Can we stop with the jewish discussions? Please.

 

[Trend Fader]

Quote from Hydroblunt:

I don't buy it, most traders get bled to death.

Small losses, few bigs wins, that is a simple computer program that could do that. Why not not just make random entries with a set stop loss and a trailing stop loss for winning trades. Hey I think I found the holy grail.

Get real guys, the game is more complex than that. Even with a discretionary trader cutting his losses tight 90% of the time, it is impossible. The winning moves will simply get smaller once too many ppl start doing it and the majority will just get churned to death. It's been going on for a few years already, it's not the big losses, it is either the lack of big enough moves for the wins or the slippage & rate of churn that slowly bleeds traders.

It's all about entries & exits because with proper entries you will get in where accepting you're wrong will cost you little and you will not get shaken out. With proper exits you will take your profit where it is high enough where it is very economical to have 90% losing trades.

I'm not preaching big losses or doubling down but this small losses theory has been preached by prop shops for a long time. All that happens is that new guys struggle for months taking a bunch of small losses while the prop firm collects commissions till the new guy is slowly bled to death. Been there, done that.

P.S. Can we stop with the jewish discussions? Please.

You are totally off base here dude... You think that everyone on this forum daytrades. Cohen is more of a swing/position trader. I myself am a swing trader.. taking small losses for me can be put into a different context than your typical prop shop daytrader.

I am sure there are traders in Cohen's firm that are pro daytraders.. but I bet that 5-10% of winning trades that make his year.. are not from daytrades... its from pyramding millions of shares of a stock like TXU or KMRT.


--MIKE

 

[OldTrader]

Quote from Banjo:

The oldest adage in the biz is " small wins, small losses , large wins". That is a traders mantra. Never take large losses, simply don't let it happen.

Good thought...but the question is, how many of those "large wins" do you eliminate by NOT taking the risk of a large loss?

OldTrader

 

[LaSalle]

Quote from nitro:

Got me good? I don't understand what that means. She is the best thing that happened to me. The fact that we could not make it work was a tragedy.

A large portion of my friends are Jewish. I really don't understand the aversion to talking about the propensity of some ethnic groups to excel. Even my educated Jewish friends believe there is something to it.

I also believe it to be true of many Asians. I don't think it is any secret to the factors composing the success - a high esteem is placed on higher education by both groups with a respect for intellectual pursuits, along with a proper work ethic and no hangups about getting paid well to do your job.

nitro

Education is highly interwoven within the contexts of their religious pursuit. Which necessarily leads to a greater propensity for pursuing and achieving a higher education.

The common knock against Jews, as I see it, is two-fold:

1.) Disproportionately wealthy.

2.) Perceived to keep to their own; i.e. consolidate power amonst Jews.

 

[Hydroblunt]

Quote from Trend Fader:

You are totally off base here dude... You think that everyone on this forum daytrades. Cohen is more of a swing/position trader. I myself am a swing trader.. taking small losses for me can be put into a different context than your typical prop shop daytrader.

I am sure there are traders in Cohen's firm that are pro daytraders.. but I bet that 5-10% of winning trades that make his year.. are not from daytrades... its from pyramding millions of shares of a stock like TXU or KMRT.


--MIKE

Same story. Just like intraday range can get cut down so can monthly range. If too many people jump on board of the "lot of small losses and a few huge wins" train, it will all collapse.

Like I said, if it's that simple, then just run a hundred computer programs that cut out very quick with small losses and hold for huge gains. Try it out and see what happens. Slow bleeding.

 

[Trend Fader]

Quote from Hydroblunt:

Same story. Just like intraday range can get cut down so can monthly range. If too many people jump on board of the "lot of small losses and a few huge wins" train, it will all collapse.

Like I said, if it's that simple, then just run a hundred computer programs that cut out very quick with small losses and hold for huge gains. Try it out and see what happens. Slow bleeding.

You simply dont know what you are talking about. Why do u make these sweeping statements about markets. If one has an edge they would not run random computers models to generate signals.

Its about taking small losses, small gains and knowing when to step on the gas. Stepping on the gas can be increase position size or ride winners longer. When you trade with an edge and have experience you will know when these things come into fold.

Why would i try to run random trades.. I have an edge, I have a gut, and I know my limitations.

 

[LaSalle]

Quote from Hydroblunt:

If too many people jump on board of the "lot of small losses and a few huge wins" train, it will all collapse.

As I see it, THAT is the current trade in this low volatility environment. Sit tight (small loses) through the 4%, 3 month (or whatever) trading range and hope to be positioned correctly for the 16%, 1.5 month move.

 

[Trend Fader]

Quote from Hydroblunt:

S If too many people jump on board of the "lot of small losses and a few huge wins" train, it will all collapse.

This comment makes no sense. There are 10,000 stocks in the US.. every investor has their own style and habits. How can too many people jump on board 10,000 different stocks and make trading with an edge collapse.

Your scenerio is a hypthetical that will never occur... what is even the point of making dumb comments like that.

 

[LaSalle]

Quote from Trend Fader:

This comment makes no sense. There are 10,000 stocks in the US.. every investor has their own style and habits. How can too many people jump on board 10,000 different stocks and make trading with an edge collapse.

Your scenario is a hypthetical that will never occur... what is even the point of making dumb comments like that.

The question we traders should be debating is whether price AND volatility can move higher together; as it did during the later part of the 1990s.

I say this because the markets are close to nearing a secular low in volatility and the conventional wisdom is rising volatility begets falling stock prices.

 

[Trend Fader]

I realize that most of your guys only trade the ES, NQ... which are the worst markets possible to swing. They are low volatility and chop/whipsaw city.. Dont be blinded by the flashy futures marketing hype.. they are almost impossible to trade successfully on the dailys on a consistent basis.

Look at stocks like FFIV, NRG, HOT, JOE... they are smooth as butter on the dailys and give u plent of volatility. You guys should focus on adapating with the markets.. and focus on whats moving and trending.. as opposed to complaining how the ES is low volatility.