Why complicate things?

[newwurldmn]

3..You can be a Market Maker...

that falls into category 1 I think.

Edit : mr muppet said the same thing.

 

[SunTrader]

Point is 50%/month only possible with leverage

For very, very short term.

 

[taowave]

Yeah,but he's referring to the nuclear waste we had to take the other side of when we worked on desks..

I'm talking market making more in the sense of a floor trader,where you only initiate with edge..

He also appears to have a disdain for pure direction...Not sure why

that falls into category 1 I think.

Edit : mr muppet said the same thing.

 

[newwurldmn]

Yeah,but he's referring to the nuclear waste we had to take the other side of when we worked on desks..

I'm talking market making more in the sense of a floor trader,where you only initiate with edge..

He also appears to have a disdain for pure direction...Not sure why

Still the edge is some kind of bid offer: compensation for taking risk from another counterparty.

i think he’s saying direction also falls into this category. Value guys exploit a risk premium for buying dead money stocks. Momo guys are betting on the next big thing.

i agree with his outlook on management even if it sometimes feel forced in every situation.

 

[nooby_mcnoob]

For very, very short term.

Not really. If you are doing the same thing day in, day out, you might lose money some days but each day is fresh. So there is no reason why you should blow out.

 

[deaddog]

So there is no reason why you should blow out.

The only reason I can see is the use of leverage.

 

[nooby_mcnoob]

The only reason I can see is the use of leverage.

Think about the leverage you get when you have a mortgage, same idea. If you know the parameters, drawdown, etc, you can do it without blowing out.

 

[nooby_mcnoob]

Think about the leverage you get when you have a mortgage, same idea. If you know the parameters, drawdown, etc, you can do it without blowing out.

I'll give you an example.

Say you have day trading leverage where you only have to put up $500 for one ES.

And you know that your max drawdown trading one contract is $1000, and that the max you will have a losing streak is 5 days (mine is 1 day).

So you can fund an account using leverage, with some cushion and as long as the approach holds up, you'll be OK. And since you know you only expect 1 day of drawdown of $X you can review and see whether something has changed or you just fucked up.

This is the theory. I'll let you know in ten years what the reality is.

 

[SunTrader]

Not really. If you are doing the same thing day in, day out, you might lose money some days but each day is fresh. So there is no reason why you should blow out.

I wasn't referring to blowing up. I was referring to doing 50% ROI month after month after month after ....

 

[deaddog]

I'll give you an example.

Say you have day trading leverage where you only have to put up $500 for one ES.

And you know that your max drawdown trading one contract is $1000, and that the max you will have a losing streak is 5 days (mine is 1 day).

So you can fund an account using leverage, with some cushion and as long as the approach holds up, you'll be OK. And since you know you only expect 1 day of drawdown of $X you can review and see whether something has changed or you just fucked up.

This is the theory. I'll let you know in ten years what the reality is.

So when you say you are returning over 100% are you talking per trade or account value?

With your example above if you have to put up 500 bucks to trade one contract, how much do you have to have in your account to have a 1000 dollar drawdown?

I know you are pulling cash from the account, but surely the account is growing.