The Electric Day Trader and Ruin. How probability oppposes short-term investors.

Quote from ProfLogic:

Some of us actually make a living trading so we don't mind sharing our edge.
More...

That's what I'm talking about.

A confident man like Prof, who clearly does well, doesn't need to sell any system.
 
Quote from ProfLogic:

Some of us actually make a living trading so we don't mind sharing our edge.
More...


Go to C2, you just think you make a living, when I've not seen any evidence you can trade.
 
Quote from ByLoSellHi:

That's what I'm talking about.

A confident man like Prof, who clearly does well, doesn't need to sell any system.
More...

He hasn't been audited. No third party source means it's unverified claims, and that doesn't just apply to him, but to anyone else who thinks they can just post p and l with no real time calls.
 
Quote from bwolinsky:

Go to C2, you just think you make a living, when I've not seen any evidence you can trade.
More...

C2 is a great place to SELL stuff.
If you must sell a product to earn a living, more power to you.
Whether YOU believe I earn a living trading or not is immaterial since I'm not promoting myself in these pages.
 
Quote from bwolinsky:

It's for sale, nobody gives a free lunch, like some lunies on this site.

www.collective2.com/go/pairsqidqld
More...

lol, are you serious?

Almost every one of the few trades that actually made money in the past year have a drawdown far in excess of the eventual profit. I find it hard to believe you make a living off the $50 per month from your 2 subscribers, who took the time to completely bash your 'system' in their reviews..

This comment from one of the people tracking you says it all:

Comments

Vendor said "$8,500,000 is the price tag for the chartscript in wealth-lab for both the QID/QLD and the SDS/SSO versions". The last time I checked the latter was -29.5% on an annualized basis so I presume he means Zimbabwe dollars and not USD! Maybe if he spent less time knocking other vastly more popular systems and concentrated on refining his own efforts then the results might improve?
 
Quote from Jander:

lol, are you serious?

Almost every one of the few trades that actually made money in the past year have a drawdown far in excess of the eventual profit. I find it hard to believe you make a living off the $50 per month from your 2 subscribers, who took the time to completely bash your 'system' in their reviews..

This comment from one of the people tracking you says it all:

Comments

Vendor said "$8,500,000 is the price tag for the chartscript in wealth-lab for both the QID/QLD and the SDS/SSO versions". The last time I checked the latter was -29.5% on an annualized basis so I presume he means Zimbabwe dollars and not USD! Maybe if he spent less time knocking other vastly more popular systems and concentrated on refining his own efforts then the results might improve?
More...

:D
 
I do not care that 99% daytraders lose money.As long as I keep making money week in and week out.Look at the P&l of Redink,Weinstein and few others.most of people like starter of this thread get frustrated when they can not make money as a daytrader.This is a game of chance,most will lose few will win.I am very proud to be a profitable day/swing/position trader.Eat your heart out all you sour losers.
:D :D :D
 
Quote from Jander:

lol, are you serious?

Almost every one of the few trades that actually made money in the past year have a drawdown far in excess of the eventual profit. I find it hard to believe you make a living off the $50 per month from your 2 subscribers, who took the time to completely bash your 'system' in their reviews..

This comment from one of the people tracking you says it all:

Comments

Vendor said "$8,500,000 is the price tag for the chartscript in wealth-lab for both the QID/QLD and the SDS/SSO versions". The last time I checked the latter was -29.5% on an annualized basis so I presume he means Zimbabwe dollars and not USD! Maybe if he spent less time knocking other vastly more popular systems and concentrated on refining his own efforts then the results might improve?
More...

OUCH:eek:

I guess C2 IS a pretty good place to sell things . . . that are worth selling.
 
your points do not make any sense. If I have a 55% winning chance vs. 45% chance of losing and lets assume equal payout in both scenarios then it comes down to the "optimal f".

So when you have a 10k account why do you suggest a risk per trade of 2.5k? That is rediculously high. The point is if you optimize your position size as a function of your account size, probability of winning/losing and the outcome in each scenario then your return will be several times higher over time than what you suggest.

So, based on your comments I strongly refuse your point that probability opposes short-term investors. If you have a system with edge and you understand the mathematics of money management in fixed fractional trading then you can have an edge several times higher than any long-term investors, especially risk adjusted.



Quote from ByLoSellHi:

-CONTINUED-

The next demon our day trader will have to confront is the decision of what to do if the trading account grows on schedule, thereby affirming the validity of the research. If the original capital of $10,000 has grown to $20,000, the chance of being ruined by trading in $1,000 chunks has become much smaller than the original 13 percent because now it would take twenty net losses rather than ten to cause ruin. The probability of this happening is only 1.81 percent. The chance of continuing to add to capital over time becomes more and more certain if our trader does not increase the scale of the trading commitment.

Unfortunately, it is at this point that compulsion, ego, and environmental mania are likely to take over. Success, no matter how short-lived, is extrapolated to infinity. When the initial capital is doubled, that leaves only six doublings necessary to top $1 million. The trader decides to begin trying for $40,000 by doubling the size of his trading units.

Unfortunately, while it took ten net profits to take the trader from $10,000 to $20,000 at $1,000 per trade, at $2,000 per trade it takes only five net losses to return the trader to his original capital base of $10,000. This realization is sobering because it raises the probability of ruin significantly.

If each doubling of capital is accompanied by a doubling of the "bet unit," a frightening scenario ensues. Recall that the probability of ruin facing the trader who plays the original game indefinitely was only 13 percent. That infers that the long-run probability of successful survival was 87 percent. The probability of reaching the trader’s goal of $1 million or more by doubling capital and then doubling the bet size seven successive times is therefore (.87)7, or about 38 percent. The chance of being ruined en route is 62 percent.

It is important to note that the typical day trader probably exaggerates the real chance of success for at least two reasons:

* The presumed ten percent advantage undoubtedly has some high hopes mixed in with the research.
* Independence of results, while desired, often does not exist, which makes runs of so-called "bad luck" more likely than the computed probabilities would indicate.

The effects of such exaggeration are shown in Table II which demonstrates the trader's probability of success with various strategies from a "sure thing" (100 percent winners) down to doing no better than having winners and losers equal. The table assumes the money is divided into four equal units and is bet in equal units over time.
Table II: Probability of Ruin or Survival at Different Advantages per "Bet"
Advantage per bet


Dr. Harlow is acknowledged.
More...
 
You must log in or register to reply here.
Back
Top