Uncertainty and Risk in Short-Term Trading

Not sure if that's what Joe meant, as I know Joe and know quite well his trading style, which is basically momentum trading. But I am frankly surprised that you guys can't figure out such a simple strategy :) Here it goes:

When you are a short-term momentum trader, you tend to focus on one trade at a time, as momentum trading requires constant attention, and active trade managment. In other words, you just can't afford to track and trade too many markets at the same time, so what you do is commit most of your money, energy, and time to one high probability trade.

Now when you are trading long-term, it's a lot less time consuming so you are able to track more markets and trade more markets, by allocating less to each one, and basically taking advantage of diversification. So there you have it, you reduce risk by diversification, and you can do that because you have plenty of time to find trading opportunities. Hmmm...... What a crazy idea, LOL.... Come on guys, and you actually want to trade for a living?!?!?! Need to think a little sometime!

Fun Trading! :)

B

P.S. Don't forget to check out ebay ;), I am selling 7 Joe Ross books on there! Just type "joe ross" into search, and narrow it down to books only. You can buy all of his books at a much better price than you can find anywhere else...







Quote from Rocko1:

With all due respect Joe, I'm not sure if that's correct. I could be wrong here, please correct me if I am.
When you understand the exact probabilities of each trade, average size of winners and losers in term of %, and potential outliers; then wouldn't the risk taken per trade not differ between positions that take a week or a year?
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Chocolate, you did make some okay/funny points at the buttom, but man you need to study the material before you start schooling others on it, casue you are clueless about what you are saying! :) As far as unloading Joe's stuff, I thought that was kind of funny, cause I am actually on ebay right now selling Joe's books! So hey, maybe you should buy some and actually study before you start blowing smoke.... ;) Btw, just a side note, reaseach the prices on Joe's books in the used book market, hey if the stuff is S***, how come the prices in the secondary market do not reflect it? Is the market always wrong, but you are still right? If that's the case, I'd sure hate to see your tradind record, LOL :)))

B


Quote from jack hershey:

Joe turns out to be incorrect.

The statement he is making is to direct a person to a particular style of trading he advocates.

He does a thing he calls trending and consolidating in an 15 to 85% proportion.

If anyone remembers the wharton school graduate "Mr. Market" you will see the strategy applied.

If you enter and a trade is not making money, you hold for a period of time and then it may make money. Over a long time the market (during hours it is closed, it tends to go up). Joe finds "hope" in this and ignores the time value of money, mostly.

Mr. Market employed anther technique. He kept losers and when his portfolio filled with losers, he simply started a new portfolio and screwed it up over time yet once again.

The alternative to Joe's approach is to just trade stocks that have high money velocities and be on the right side of the trend only.

Joe does not answer questions often and his threads pop up when someone is trying to unload stuff they have bought from Joe.
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:D :D
 
Quote from bastiat8:



When you are a short-term momentum trader, you tend to focus on one trade at a time, as momentum trading requires constant attention, and active trade managment. In other words, you just can't afford to track and trade too many markets at the same time, so what you do is commit most of your money, energy, and time to one high probability trade.

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You're assuming that all short term traders have no understanding of risk management, probability expectancy, and are incapable of applying high-probability trading models.

With your logic, all the floor traders should be losing money and that all the dumb money becomes profitable.
 
It is mind boggling how clueless you are, mind boggling. How many Pit traders do you know who trade in more than one pit simultaneously???? I am not even going to respond to other stuff you wrote, cause you obviously either did not take the time to process what I said, or you are just incapable, cause if you did you would not make a complete NOB comments. What are you an "Elder" student? LOL, that complete quack who wrote come into my "sleeping" room... Seriously, think, think, think before you open you mouth. Otherwise you are not going to learn S*** about how markets really work, nor will you ever make any real $$$!!!


Quote from Rocko1:

You're assuming that all short term traders have no understanding of risk management, probability expectancy, and are incapable of applying high-probability trading models.

With your logic, all the floor traders should be losing money and that all the dumb money becomes profitable.
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Quote from bastiat8:

It is mind boggling how clueless you are, mind boggling. How many Pit traders do you know who trade in more than one pit simultaneously???? I am not even going to respond to other stuff you wrote, cause you obviously either did not take the time to process what I said, or you are just incapable, cause if you did you would not make a complete NOB comments. What are you an "Elder" student? LOL, that complete quack who wrote come into my "sleeping" room... Seriously, think, think, think before you open you mouth. Otherwise you are not going to learn S*** about how markets really work, nor will you ever make any real $$$!!!
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lol sure all pit traders lose money right? It's wrong to make assumptions about something you obviously don't fully understand. You have no idea how much of a newbie you make yourself sound. I'm ignoring this thread from now, your post before this showed the intent to sell crap.
 
I am inviting you to my house to compare our trading record/account statements! :) This is actually starting to get funny, i.e. where did you see me claim that pit traders do not make money. In fact much of what I use in my own trading, is what learned from several PIT traders... GET a F****** clue man, really, and stop wasting other peoples time!




Quote from Rocko1:

lol sure all pit traders lose money right? It's wrong to make assumptions about something you obviously don't fully understand. You have no idea how much of a newbie you make yourself sound. I'm ignoring this thread from now, your post before this showed the intent to sell crap.
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Quote from bastiat8:

Chocolate, you did make some okay/funny points at the buttom, but man you need to study the material before you start schooling others on it, casue you are clueless about what you are saying! :) As far as unloading Joe's stuff, I thought that was kind of funny, cause I am actually on ebay right now selling Joe's books! So hey, maybe you should buy some and actually study before you start blowing smoke.... ;) Btw, just a side note, reaseach the prices on Joe's books in the used book market, hey if the stuff is S***, how come the prices in the secondary market do not reflect it? Is the market always wrong, but you are still right? If that's the case, I'd sure hate to see your tradind record, LOL :)))

B


:D :D
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Thanks for standing in for Joe.

I have purchased some of Joe's books. They are available twice a year in Tucson. The public library collects books and sorts them onto tables and shelves at its warehouse. They have people price them by a coding system. Joe is in the 1 dollar category.

I like to read and study the underlines and hilites but the 85/15
% is a direct quote from Joe to me countering my viewpoint which is not too important.

I look to the compound interest formula and the quality of a stock. I like 80 as the annual exponent and it represents the 1/2 cycle swing I enjoy while making the long portion of a quality stock's swing.

On Sunday, I spend a little time lining up the week and I check it again on Wednesday.

I "bat" with four streams of capital, or 8 maybe. A, B, C and D. And I select a batting order of 1, 2, and 3 stocks.

no targets but a three day hold often works out. My batters repeat in the line up as the year goes along. In 2006 NTRI batted four times for three days each. The average of the hold was 30% each time NTRI batted.

Attached as an example of my smoke blowing is the list from my yellow pad from yesterday. There you see 18 stocks that are going to bat for me according to when I let them step up to the plate for a few days this week. there are some notes on the right about what time of the week looks possible.

I can understand why you would hate to see my trading record. Who would want to see it?

Watch my teams at bat this week and see if one of them could be used on as a focus for your friend Joe.

If he held NTRI for 6 months he would not have made much at all. It just runs up 30% in three days everyso often and then slips back to the same old starting place all over again.

I'm doing a few books this year (5) to see if anyone wants them. could youtell me a little bit about how ebay works? Do signed copies go for more? I am only going to do small press runs. Once I did a book that they printed 400,000 copies of in four months. does ebay send out copies at a good rate?

regards,

Smokey
 

Attachments

J.H.:

Couple points. I appreciate you actually not being an ass hole you seam like a stand up guy:

1) I have no idea how Joe runs his publishing business, other than he gave it to his daughter in law. But what I do know is that Joe, revises his books/courses to stay current with the changing times. So when you say that you can find a copy of his book for a $1, you are likely referring to OLD AND OUTDATED MATERIAL!!!! You have to compare apples to apples. It's like TEXT books, as soon as new edition comes out, you can get the previous ones for nothing when the new once are selling for quite a bit.

---those who are interested in Joe's work, go to this link:

http://books.search.ebay.com/joe-ro...fromZR40QQsacatZ267QQsatitleZQ22joeQ20rossQ22

2) As far as I know, Joe only invests in stocks for the long term and only speculates in stocks from the long side. He primarily specializes in futures, and options. As you know by know, there are some differences b/w stocks and futures! ;^).....

3) Diversification!!!! It's sooooooooooo important, just try to get some info on Toby Crabel, the guy now manages $2.5 BILLION, actually that's just one of his funds. Well, guess what a lot of the stuff he does is still quite short-term, but he employs brutal DIVERSIFICATION and has a small army of traders who execute strategies in many many markets. The bottom line is that if you take 2 identical instruments with the same ROR and Variance, and combine them, you still get the same ROR but with less variance i.e. RISK. It's amazing how ignorant people are about the most basic stuff.

As far as Joe, I can honestly say that I learned a great deal from him, but I still have my doubts about whether the guy is actual a real trader, his website is way too commercial and is full of advertisements! As for myself, I have somewhat moved away from trying to only trade momentum, and now focus more on short-term value based trading. Anyways, good luck this year with stocks. Just an opinion but I think we are still going to have a nice RUN, as all of the baby boomers are retiring and are scared that they have little saved, so they are dumping it into the market!!.... Interesting to see how long this will last...



Quote from jack hershey:

Thanks for standing in for Joe.

I have purchased some of Joe's books. They are available twice a year in Tucson. The public library collects books and sorts them onto tables and shelves at its warehouse. They have people price them by a coding system. Joe is in the 1 dollar category.

Ites but the 85/15
% is a direct quote from Joe to me countering my viewpoint which is not too important.

I look to the compound interest formula and the quality of a stock. I like 80 as the annual exponent and it represents the 1/2 cycle swing I enjoy while making the long portion of a quality stock's swing.

On Sunday, I spend a little time lining up the week and I check it again on Wednesday.

I "bat" with four streams of capital, or 8 maybe. A, B, C and D. And I select a batting order of 1, 2, and 3 stocks.

no targets but a three day hold often works out. My batters repeat in the line up as the year goes along. In 2006 NTRI batted four times for three days each. The average of the hold was 30% each time NTRI batted.

Attached as an example of my smoke blowing is the list from my yellow pad from yesterday. There you see 18 stocks that are going to bat for me according to when I let them step up to the plate for a few days this week. there are some notes on the right about what time of the week looks possible.

I can understand why you would hate to see my trading record. Who would want to see it?

Watch my teams at bat this week and see if one of them could be used on as a focus for your friend Joe.

If he held NTRI for 6 months he would not have made much at all. It just runs up 30% in three days everyso often and then slips back to the same old starting place all over again.

I'm doing a few books this year (5) to see if anyone wants them. could youtell me a little bit about how ebay works? Do signed copies go for more? I am only going to do small press runs. Once I did a book that they printed 400,000 copies of in four months. does ebay send out copies at a good rate?

regards,

Smokey
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Quote from Thunderdog:

Good luck with that.
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Why do you believe quantitative analysis doesn't work in the long run?
That's exactly how I've been making money the last year playing short term trades. Is there something superior you'd suggest to hedge against uncertainty?
 
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