We've seen such discussions about zulutrade and collective2 signal providers over and over again : he's a great trader , amazing , he doubled his money in a year ... etc etc , we always say no he's not good , he will blow up , he will give everything back , and then boom that exactly what happens . Have seen that many times not once not twice ...
What does Karen the Supertrader and her results say about volatility? Oversold?
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what is it that does hurt you when someone says so? just trying to understand.
My view is : till now she is doing well in trading.
How is she martingaling? She has already been through numerous bear markets and is still alive.... If she was a bad trader she wouldnt be able to turn $100k into $100m. What is your standard for a "good trader" exactly? 100000% return?
Maybe she is not martingaling but i gave you an example of another high win rate strategy , many fx traders do survive for years not months by averaging down , but we all know how it ends ...
Lets assume she really could turn 100k to 100m - good for her but is there a verified track record ? - that alone doesn't necessarily mean she is good , many people do turn 1 to 1000 or even 100M in lotteries and gambling , but that doesn't mean that they are skillful !
A good trader , as a rule of thumb : who make money and beat the best indexconsistently , during different market cycles , with an acceptable DD - less than the index DD - ....
But she doesnt trade Fx, nor does she martingale....so none of this is relevant....she trades short vol and does well for herself, i dont see what the problem is. i havent studied her returns but from what i understand she survived 2008 and 2011..when many people more conservative than her blew out, even some long vol players. that seems like a good trader to me. from watching her videos she doesnt seem like some schmuck who just won the lottery....but sure, eventually she will blow up. eventually the sun will blow up as well...that's the only argument black-swan proponents have, that eventually, they will be right, even if it takes 100 years...
FX or not what difference does it make ? 2011 was a range year which is good for her if she knows how to play it , who said she survived 2008 ? any public track record ?
since she's not an institution i take it she has no need for an officially audited track record..but her story is all over google & in the videos of her on youtube. its up to you if you want to believe it....if you can stand the constant talking of Sosnoff i recommend the tastytrade interview of her...
Apparently not. 2008 was anything but normal bear market and she survived it. Who said it? She did and her still existing funds did. Tastytraders backed her claim up too.
Now I agree, traders like her might just have the correct strategy for the right times, but 2008 showed, that she must be doing something different what we usually assume, otherwise she wouldn't have survived it.
just watched the video - she clearly does a lot of good things - focus is on the process, just looks at the numbers, switches to large liquid market, high risk tolerance, keeps it simple etc.....
But - she also clearly is ignoring some of the risks.....which is fine and is probably a reason for her success.
It also seems based on a poor understanding of odds and events - eg; when someone says this has a 5% chance of being ITM and basing everything on being 'far enough out' - that means very little. Its close to finger crossing.
She has a process that works for her, has at some stage a very high probability of seeing her have big drawdowns , and I would suggest that this is often conveniently overlooked by a large number of supporters.....and for us old option guys who have seen plenty of people try this and get carried out, we are probably too risk averse.
Good luck to her.
But - she also clearly is ignoring some of the risks.....which is fine and is probably a reason for her success.
It also seems based on a poor understanding of odds and events - eg; when someone says this has a 5% chance of being ITM and basing everything on being 'far enough out' - that means very little. Its close to finger crossing.
She has a process that works for her, has at some stage a very high probability of seeing her have big drawdowns , and I would suggest that this is often conveniently overlooked by a large number of supporters.....and for us old option guys who have seen plenty of people try this and get carried out, we are probably too risk averse.
Good luck to her.
Few more thoughts on the topic.
First of all, if you undestand the soures of overpricing like regulatory pressures in this case or institutional hedging in case of single stocks, you can pick your fights. There is a variety of actuarial methods that give you an ability to estimate the fair value of these options and if they don't appear overpriced you should not sell them.
Second of all, the key ingridient of a good diet is portion control. An approach to this kind of systematic (or idiosyncratic) risk underwriting is the same - you want to make sure you have enough cash to withstand a margin call.
Third and most important is that you, as a retail trader, have an "unfair" advantage - your risk management process can be geared toward longer term capital growth instead of the short-sighted process created by banks/hedge funds. If overall expectation is positive and a draw-down will be limited and quickly recovered, you are not held to Calmar/Sharpe/Omega ratio or any other form of risk mangagement metrics.
First of all, if you undestand the soures of overpricing like regulatory pressures in this case or institutional hedging in case of single stocks, you can pick your fights. There is a variety of actuarial methods that give you an ability to estimate the fair value of these options and if they don't appear overpriced you should not sell them.
Second of all, the key ingridient of a good diet is portion control. An approach to this kind of systematic (or idiosyncratic) risk underwriting is the same - you want to make sure you have enough cash to withstand a margin call.
Third and most important is that you, as a retail trader, have an "unfair" advantage - your risk management process can be geared toward longer term capital growth instead of the short-sighted process created by banks/hedge funds. If overall expectation is positive and a draw-down will be limited and quickly recovered, you are not held to Calmar/Sharpe/Omega ratio or any other form of risk mangagement metrics.