Wasn't he referring to the responsibility of managing money as being stressful?
He's old school, today's managers are way too gung-ho with client funds, big gambles pay them big commissions, big losses just mean a lost client, no big deal to them.
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The 'George Soros' Position Sizing method
- Thread starter Daal
- Start date
Wasn't he referring to the responsibility of managing money as being stressful?
He's old school, today's managers are way too gung-ho with client funds, big gambles pay them big commissions, big losses just mean a lost client, no big deal to them.
Quote from Cutten:
What do you think about my point of getting into a "good run"? He talks about starting tentatively, constantly reexamining mistakes, and then if he gets on a good run with decent profits, he becomes more aggressive. Could this refer not so much to a psychological issue about the gains/principal fallacy, but rather the extent to which Soros feels "in the zone" and in tune with market moves and developments? If he is analysing things accurately, and trading well, profit will accrue - thus he can use profit as a signal that he is trading well, and thus to trade much bigger than normal. Equally, if he sucks and is making bad trades, it's best for him to be trading small.
I don't know if Soros does this consciously or subconsciously (e.g. by using the gains/principal fallacy as an accidental way to trade his own hot streaks more aggressively), but it seems to work and make logical sense.
Very good point and it would certainly make sense.
Quote from Daal:
its seems to be mainly a psycological method(rooted on the market's money falacy)rather than a mathematically sound one
If you're talking about an automated trading system, fine, use a mathematical money management. If it's discretionary and being traded by a human, to assume someone will follow a potentially very painful mathematical money management model without letting drawdowns affect their trading decisions- now that is foolish.
Quote from NY0BScalper:
If you're talking about an automated trading system, fine, use a mathematical money management. If it's discretionary and being traded by a human, to assume someone will follow a potentially very painful mathematical money management model without letting drawdowns affect their trading decisions- now that is foolish.
foolish is to assume your psychology is static and cant get any better. I see plenty of folks carry these excuses to undertrade all their life(and devoting tons of time to technicalities) instead of being honest with themselves and admit that they need more balls/stomach and then going to work on it
Quote from Daal:
foolish is to assume your psychology is static and cant get any better. I see plenty of folks carry these excuses to undertrade all their life(and devoting tons of time to technicalities) instead of being honest with themselves and admit that they need more balls/stomach and then going to work on it
It may be undertrading (or underleveraging/deleveraging) to you, but to those of us cautious with our own (and other people's) money it's called being sensible.
Trading isn't a race or a competition to see who can make the most money the fastest or who has the biggest kahoonas, slow but sure with a smooth equity curve is the goal. If you need to test your balls/stomach then take a trip up to the top of Harakiri in the Austrian Alps, that sucker's a 78% descent!
It might be interesting to see a Sharpe ratio for a Soros-type trader/manager and a Daal-type trader.
That is like saying 'I'm the tennis player no150 in the world, why would I want in the top 10?what all about that psychological pressure, the additional traning you will need, all the interviews. yeah you will make way more money but is it really worth it?I rather stick around here what I belong and have a smooth equity curve, my professional life is not about balls and getting better. I bet have a much lower volatility in earnings than federer, I mean the guy makes half a million in one week then makes 10K the next, I will take a smooth 30K anyday'
if thats your choice then ok. and Im not talking about being reckless, you look back what I said about 75% drawdowns not being prudent, thats not even close to recklessness
if thats your choice then ok. and Im not talking about being reckless, you look back what I said about 75% drawdowns not being prudent, thats not even close to recklessness
Quote from Daal:
That is like saying 'I'm the tennis player no150 in the world, why would I want in the top 10?
But that is a competition, trading isn't, well it isn't for me anyway. I'm not striving to be No1, all I want to do is minimize my risk and produce a realistic return for the risk I'm taking.
Like I said, whatever the trader (and/or client) feels comfortable with is usually the most productive. Too much pressure negatively affects performance if we're unable to cope with it. Different people have different thresholds, we can't all be No1.