Originally posted by easyrider
I'm not sure I follow you. Who said trading was "stealing" or "easy"?
Originally posted by daniel_m
That doesn't make sense. Your upside potential is defined by your risk parameters. The more you wanna make on a given trade the more you need to risk.
If you want to trade at the optimal, profit maximizing level, for your particular style, "optimal f" will have you routinely have you risking 15-25% per trade. Expect BIG drawdowns, and, depending on how good your style is, a near certain blowout. Then again, Niederhoffer is your hero isn't he?
Originally posted by chasinfla
It's funny to read all these BSD's (who have never traded a fraction of his size) who criticize him and spout off about how they would never do what he did. But if there's one sure way to a blow up, it's overconfidence. And blowups can happen lots of different ways.
Originally posted by darkhorse
Let me clarify my beef with Niederhoffer one last time.
First of all, of all the books I've ever read on trading, his was more arrogant than the next ten put together. He may be a great guy, I haven't met him, and the book was entertaining. But his ego practically jumps up to give you a big wet kiss every time you turn the page.
Also I think you are subtly trying to suggest we could all easily end up like Niederhoffer. I think this is disengenuous. Again, going to his own book, his own words, there is clear evidence that Niederhoffer has a gambler's complex. He brags about how he almost takes his firm down on a single Yen trade, about how he stays up for three days and nights because a single tick will wipe him out. He brags about how the British Pound almost destroyed him also. He brags about how he makes money for a client for years and years and then loses 20% of the account in a day. He brags about how his father, George Soros, and various other people he knows express major worry and concern that he is going to blow himself up. He brags and brags and brags and brags. He wants you to know that he takes the big risks. He relishes in getting firebombed. Even his self deprecation is bragging in disguise. For crying out loud, is there not a pattern here?
If a clinical psychologist read Niederhoffer's book and was asked to analyze personality of the man who wrote it, the report would probably say we are dealing with an ego driven thrill seeker who has a need to seek attention by being unconventional and who has an unrealistic faith in his intelligence, a "me against the world" mentality, and an obsession with statistics.
I think he wanted to blow himself up. He pressed and pressed until it finally happened. His own words convict him, he is his own judge and jury. He was like an ant that would run out onto the sidewalk beating his chest, daring the market to step on him. He got his wish. Twice.
So don't say we are all like him, we are not. And don't imply that what happened to him could easily happen to anyone. We are all vulnerable, but if you are careful your odds of survival are much better. Certainly much better than if you show all the discretion of freeze tag on the freeway. Most of us don't leverage out the wazoo with naked put options. Playing the reverse lottery is not the same as careful trading.
I do not pass judgment on Niederhoffer as a person. But as a trader I think he sucks, I don't care how much money he has made. And I think his zealous faith in statistics is not warranted by any rationale. I'm not a hack or a jealous wannabe, just calling 'em like I see 'em.
Originally posted by chasinfla
I think it's dangerous to fool ourselves into thinking we know what's in the other guy's head...and that we are somehow better.
Originally posted by darkhorse
I saw "license to steal" in your post and it brought the subject to mind
If I misread your post I apologize, though my points still stand because I have seen the suggestion that trading is stealing or trading is easy come about time and time again on this board, I wanted to dispel that myth
Originally posted by darkhorse
I'm not a mind reader. But I can read words.
I don't know what you are thinking, but if you wrote a book and spelled out exactly what you were thinking, that would give me some clues would it not?
There are objective standards to measure the quality of trading. The most basic one is how much money you have made or lost.
After his double blowups, Niederhoffer has likely lost more money than he has made.
Therefore anyone who is career net positive, by objective standards, can claim to be "better" than Niederhoffer.
Originally posted by chasinfla
love to see how you'd react under similar conditions.
better? relative term. safer? maybe. last chapter not written.
Originally posted by darkhorse
LOL
Come on chas, I know you aren't a postmodernist. "Everything is relative" doesn't fly. "Maybe" is not an adequate response to objective analysis. It is a throwaway response that can lobbed up at any point and thus is not a true response at all. Debate mif you will, but don't flap your hand and say "maybe," its a waste of typing. If none of us can define risk at all than we are all buffoons playing with dynamite. Niederhoffer could have defined his risk- heck, he could have at least done a spread- but he chose to be greedy and hang his sack out in the wind instead.
There will never be "similar conditions" for me because I will never take on the proportionate amount of risk that Doc did. I will not play russian roulette with my account, even if the gun has a thousand chambers. To borrow a phrase from Jonathan Matte: you aren't just comparing apples and oranges, you are comparing apples and unicorns. Could I blow up? Theoretically yes. But odds of that are on par with full scale thermonuclear war, and if I went down with my itty bitty thirty basis point per trade risk things would be so insane that the exchanges would probably be shut down too.
Why do you care whether Niederhoffer is a good trader or not? Do you have some stake in his reputation? Trading ability and intrinsic worth have no valid link in the long run. Why do you persist in defending him? Why not just say he is a nice guy who screwed up and move on?