Why most of the system metrics are useless numbers
- Thread starter traderum
- Start date
This is not a fact because it ignores the "risk" that was taken to get from point A to point B and the probability of a "high-risk" trader of blowing up in the future.
If you turn $10,000 into $1,000,000 trading in one year and someone else does the same by purchasing 10,000 lottery ticks, it doesn't mean that the lottery trader made a great investment when risk is taken into consideration. In fact, the decision to purchase 10,000 is a moronic act, regardless of the outcome.
My job in performing due diligence on a trader is not to find the "lucky ones" who have been successful taking ridiculous risks, but to find the ones who us a combination of skill/talent and risk control and who have the best probability of surviving over the long run.
The only reason to trade is to make money â period
Oneâs PnL ultimately reflects whether one is trading properly â or not
Risk is never ignored - it must be managed - always
If one is assuming too much risk â it will bite them in the ass and their PnL will suffer - significantly, if not completely
eta - I do not believe in luck - ever
RN
You are not even in a position to attest to whether you are organic or not.
Quote from traderum:
This is old news, that thread is closed long ago.
Yes, but your clueless and feckless nature goes on...
to discredit me. This tells a lot about yourself...
You are a self-discrediting organism. The more you say...
This is old news, that thread is closed long ago.
Yes, but your clueless and feckless nature goes on...
to discredit me. This tells a lot about yourself...
You are a self-discrediting organism. The more you say...
I agree 100% with you; but there must be a way to measure how good a trader is - and it is defintely not by who has the largest P&L. You also have to take into consideration the length of time a trader has been going at it and, most importantly, how much RISK a trader took to generate his P&L.
If you have two traders who have track records of the same length and...
Trader A's P&L = X and their Risk = Y and...
Trader B's P&L = X and their Risk > Y, then Trader A is better.
You need to compare apples to apples. It's not as simply as just taking the largest P&L.
danger and TZ are absolutely right. The OP needs more education and experience to understand what metrics actually measure, how they are used and what their caveats are. Until understanding of the above issues (as well as survivorship bias) arrives, it's beyond silly to keep insisting that everyone out there is a total idiot.