As for that EMLX call, I would have wiped out my account too had I been in the same boat, as far as I understand it there was no way you could have covered as the stock halted and re-opened a LOT lower. That said, a trader at my firm happened to have bottompicked it and made 200K on that trade, so every single market event has its hunter, and the prey . . .
That said, anyone who happened to have shorted the stock after the news event came out probably took a HUGE hit, and it will happen to you and me too, one day, when we are long/short a big position and some news come out and we take multiple points losses, it CAN happen . . .
Such is the risk of the business and the worst nightmare of people like us (well, except that other thing for me).
As for Jay's calls, I am not sure if he can still do well in this environment with his stochastic scalps and moving average cross-over stuff. I read his book before I started trading at Worldco (check out my journal from last year you will see some rave reviews, and I wrote one for him even on Amazon) and I thought it was like the best thing since sliced bread, and then it took me two and a half months to realize that it just didn't work for me and I happened to ran into a guy who traded my current style . . .
I am not saying he is a bad trader, if you read his book you will see that he sounds like a pro, but I have a problem with someone who teaches but DOESN'T trade.
That said, anyone who happened to have shorted the stock after the news event came out probably took a HUGE hit, and it will happen to you and me too, one day, when we are long/short a big position and some news come out and we take multiple points losses, it CAN happen . . .
Such is the risk of the business and the worst nightmare of people like us (well, except that other thing for me).
As for Jay's calls, I am not sure if he can still do well in this environment with his stochastic scalps and moving average cross-over stuff. I read his book before I started trading at Worldco (check out my journal from last year you will see some rave reviews, and I wrote one for him even on Amazon) and I thought it was like the best thing since sliced bread, and then it took me two and a half months to realize that it just didn't work for me and I happened to ran into a guy who traded my current style . . .
I am not saying he is a bad trader, if you read his book you will see that he sounds like a pro, but I have a problem with someone who teaches but DOESN'T trade.
Magna
Administrator
On pg. 1 of this thread, way back in 1999, mjt wrote the following: One problem I had with the Pit was that I could never tell what the purpose of the trade 'recommendations' was. For example, they would say something like 'consider buy of MSFT at 110.' I couldn't tell if it was for a scalp or for a longer play. If and when it went up 1/4, they would send a message like 'anyone scalp MSFT?'
I was a subscriber to UT for a few months earlier this year and, 2 years after mjt's comments, ran into the exact same situation on a daily basis. If the stock ran favorable to their suggestion they would ask if anyone scalped it, as if to reinforce their "good call". If the stock didn't run favorable it usually wouldn't be mentioned again, and if anyone brought it up they would be quickly silenced with a terse "Manage It".
More from mjt: And at the end of the day, their trading log would list all the recommended entries and exit points, where the entry points were clear, but the exit points weren't. I saw some results on their trading logs that were a few points of profit or more, and I wonder if those were really intended to be scalps, that just happened to go up a few points more.
I took a regular look at the end-of-day trading "logs", and also noticed that the entrances were as called in the room, but the exits (which were never called in the room) seemed to fluctuate as to frequently show a profit, regardless of which direction the stock quickly took. Sometimes it would be merely .10, yet in realtime the play wasn't called as a scalp and no exit call after .10 had been given. And if it ran for a healthy profit, even tho only scalping had been referenced in the room, the log would often take credit for the longer run.
The other problem that bothered me was when calls went well everyone was quick to congratulate Jay, and he was quick to accept the kudos. Yet when calls went bad NO ONE, and I mean NO ONE would dare mention it, and that includes Jay. Or if there was any hint that someone wasn't quick enough to grab that .08 scalp before the stock reversed, they would be met with that lovely "Manage It".
With all that said, Jay has a remarkable feel for the market and is quite perceptive. And his samurai approach is well suited for some. But he is surrounded by a very tight clique, and the level of fear and intimidation in the room is often palpable (I know because many people dcc'd me in private agreement whenever I would make a challenging comment). Anyway, this is all just my opinion and I recommend anyone interested to try their free 1-week trial and see what you think.
I was a subscriber to UT for a few months earlier this year and, 2 years after mjt's comments, ran into the exact same situation on a daily basis. If the stock ran favorable to their suggestion they would ask if anyone scalped it, as if to reinforce their "good call". If the stock didn't run favorable it usually wouldn't be mentioned again, and if anyone brought it up they would be quickly silenced with a terse "Manage It".
More from mjt: And at the end of the day, their trading log would list all the recommended entries and exit points, where the entry points were clear, but the exit points weren't. I saw some results on their trading logs that were a few points of profit or more, and I wonder if those were really intended to be scalps, that just happened to go up a few points more.
I took a regular look at the end-of-day trading "logs", and also noticed that the entrances were as called in the room, but the exits (which were never called in the room) seemed to fluctuate as to frequently show a profit, regardless of which direction the stock quickly took. Sometimes it would be merely .10, yet in realtime the play wasn't called as a scalp and no exit call after .10 had been given. And if it ran for a healthy profit, even tho only scalping had been referenced in the room, the log would often take credit for the longer run.
The other problem that bothered me was when calls went well everyone was quick to congratulate Jay, and he was quick to accept the kudos. Yet when calls went bad NO ONE, and I mean NO ONE would dare mention it, and that includes Jay. Or if there was any hint that someone wasn't quick enough to grab that .08 scalp before the stock reversed, they would be met with that lovely "Manage It".
With all that said, Jay has a remarkable feel for the market and is quite perceptive. And his samurai approach is well suited for some. But he is surrounded by a very tight clique, and the level of fear and intimidation in the room is often palpable (I know because many people dcc'd me in private agreement whenever I would make a challenging comment). Anyway, this is all just my opinion and I recommend anyone interested to try their free 1-week trial and see what you think.
Hitman,
Maybe you and Mr. M ought to quit and start a trading room...at least you wouldn't be telling people nonsense like trading off intraday stochastics, a proven loser.
Maybe you and Mr. M ought to quit and start a trading room...at least you wouldn't be telling people nonsense like trading off intraday stochastics, a proven loser.
version77,
Auto liquidation is used by most brokerages to protect themselves.
If you lose ALL your money, the brokerages
should be allowed to liquidate your account to protect
themselves and all their other customers.
I believe every broker has a clause about it in all
the documents you need to sign when you sign up.
You are putting yourself at risk when you trade a stock
that drops from 110 to 50 in a matter of minutes. If you
choose to trade, you cannot blame anyone except yourself
for anything that happens to you. Taking full responsibility for your gains and losses is a step in becoming a successful trader.
Auto liquidation is used by most brokerages to protect themselves.
If you lose ALL your money, the brokerages
should be allowed to liquidate your account to protect
themselves and all their other customers.
I believe every broker has a clause about it in all
the documents you need to sign when you sign up.
You are putting yourself at risk when you trade a stock
that drops from 110 to 50 in a matter of minutes. If you
choose to trade, you cannot blame anyone except yourself
for anything that happens to you. Taking full responsibility for your gains and losses is a step in becoming a successful trader.
In many respects it is better, for both the trader in trouble, the broker, and of course the rest of the traders.
If the position goes against you, at 50% margin (time of EMLX) trade and you are fully margined you have 0 capital left. Why shouldn't be liquidated even before that?
And if it goes 60% against you then you are digging into the broker's capital by 20% and jeopardize both the solvency of the broker and the rest of the traders. And if you decide to hold overnight and "hope" for comeback and the stock dives another 20% who is going to cover your losses?
Of course the same can happen overnight but no-one has control over that, but the signs are there most of the time during the day.
However; autoliquidation during the day, I think is safer for the broker and the rest of the traders using that broker. No phone calls trying to "find" you or wait 3 days to move...
After all if you did not manage your trade properly, why should someone else take up additional risk?
And now with 4x margin capability, autoliquidation provides an even extra safety margin for all involved.
Can you imagine 4x fully margined on MSTR back in 2000 went from 230 to 80-90 in few short days..
Josh
If the position goes against you, at 50% margin (time of EMLX) trade and you are fully margined you have 0 capital left. Why shouldn't be liquidated even before that?
And if it goes 60% against you then you are digging into the broker's capital by 20% and jeopardize both the solvency of the broker and the rest of the traders. And if you decide to hold overnight and "hope" for comeback and the stock dives another 20% who is going to cover your losses?
Of course the same can happen overnight but no-one has control over that, but the signs are there most of the time during the day.
However; autoliquidation during the day, I think is safer for the broker and the rest of the traders using that broker. No phone calls trying to "find" you or wait 3 days to move...
After all if you did not manage your trade properly, why should someone else take up additional risk?
And now with 4x margin capability, autoliquidation provides an even extra safety margin for all involved.
Can you imagine 4x fully margined on MSTR back in 2000 went from 230 to 80-90 in few short days..
Josh
Magna and mjt -
I don't think your experience is limited to just UT. At one time or another I tried out maybe a half dozen "for fee" chat rooms figuring that even one good idea a month could be worth the cost.
Problem was that everyone I tried turned out to be very similar to your descriptions. One room that I found especially obnoxious was run by some guy named Waxie.
Very similar to what you describe (at least in my opinion/experience) - no exits (no trade management suggestions at all), entries always appeared to hit the wire with his entry price (apparently he didn't bother to tell those paying his outrageous fee until he was already in) and his entry price was often long gone by the time the message appeared so you could already have missed 1/2 point or more, usually no expectations for the trade offered and no trade management suggested, and if a position suddenly reversed you only found out sometime later what the supposed exit was (you of course were supposed to have "managed it" yourself). Also asking for clarification about a call or expectations was forbidden.
As everyone knows, entries are fairly easy. It's the trade management and exits that determines whether your entry was profitable or a bust.
The guy could be the world's best trader for all I know (or care at this point) and maybe the service has improved, but being a great trader and running a good trading chatroom/service are two different things. And an endless stream of meaningless "we are the best in the whole world" hype just left a bad taste in my mouth.
I didn't feel that what you were getting from any of these chatrooms/services justified the hefty fees being charged.
So after all that, I'm overly skeptical of all of them. It is definitely a caveat emptor environment and if you're considering shelling out the dough for something like that, I suggest you only do so if they actually provide trade management calls along with the entry calls so you can easily measure their performance and don't get slapped with the "manage it" type of response that often disguises many sins.
Otherwise, as long as you're still going to be on your own to try to make the entry calls turn out profitably anyway, forget the chatroom and spend part of that cash (up to $3500-6000/yr) on hardware and software to help signal decent entries and maybe even help you "manage it".
Good luck.
I don't think your experience is limited to just UT. At one time or another I tried out maybe a half dozen "for fee" chat rooms figuring that even one good idea a month could be worth the cost.
Problem was that everyone I tried turned out to be very similar to your descriptions. One room that I found especially obnoxious was run by some guy named Waxie.
Very similar to what you describe (at least in my opinion/experience) - no exits (no trade management suggestions at all), entries always appeared to hit the wire with his entry price (apparently he didn't bother to tell those paying his outrageous fee until he was already in) and his entry price was often long gone by the time the message appeared so you could already have missed 1/2 point or more, usually no expectations for the trade offered and no trade management suggested, and if a position suddenly reversed you only found out sometime later what the supposed exit was (you of course were supposed to have "managed it" yourself). Also asking for clarification about a call or expectations was forbidden.
As everyone knows, entries are fairly easy. It's the trade management and exits that determines whether your entry was profitable or a bust.
The guy could be the world's best trader for all I know (or care at this point) and maybe the service has improved, but being a great trader and running a good trading chatroom/service are two different things. And an endless stream of meaningless "we are the best in the whole world" hype just left a bad taste in my mouth.
I didn't feel that what you were getting from any of these chatrooms/services justified the hefty fees being charged.
So after all that, I'm overly skeptical of all of them. It is definitely a caveat emptor environment and if you're considering shelling out the dough for something like that, I suggest you only do so if they actually provide trade management calls along with the entry calls so you can easily measure their performance and don't get slapped with the "manage it" type of response that often disguises many sins.
Otherwise, as long as you're still going to be on your own to try to make the entry calls turn out profitably anyway, forget the chatroom and spend part of that cash (up to $3500-6000/yr) on hardware and software to help signal decent entries and maybe even help you "manage it".
Good luck.