Why Nyse stocks ?????

Originally posted by FasterPussycat
perhaps you should examine at just what your
gut is telling you and why, then maybe your mind can show your gut how to improve its trading results.

yer sir that makes sense to me.

:-/
More...

Yeah, prae 200% is pretty lousy. You definitely should be making 400%. I'm sure that's what fpc makes since he is the almighty perfection of a trading god. He knows exactly what you should do better than you do.

I'm sure if you take his advice at heart you should make at least.......10% per year.

What ever happened to the saying "Don't offer advice unless asked".

But hell, if he wants to feel superior in his vision of how one shoudl be, so be it.
 
wait a second, praetorian's got to make up his mind about whether what he's doing is or isn't easy...

regardless of how difficult it is as a skill - where it lies on the grand scale between rolling out of bed and brain surgery - I think the vast majority of traders would find it emotionally impossible: 1) reflexively stepping under the plummeting boulder, 2) getting knocked over 70 - 80% of the time... Maybe after they'd done it or watched it a few hundred times, it wouldn't seem like such a big deal...

another group of traders would be put off by a certain negative expectation that creeps around the edges of such a method. since it appears to rely on trading in (increasing) size against a major move down, it seems particularly susceptible to the eventual out-of-the-envelope, Niederhofferian account wrecker ... the day that, for once, the stock really does never stop falling, for whatever reason - it's not just bad over at ABC, but even worse... or the specialist literally loses his mind or a a second set of bombs go off or you name the exogeny, or it's the day of the week of the month of the year that the trader, on a bad streak and long ago having hit some compounding or other mathematical or other plateau beyond which he cannot seem to climb, finally comes across a stock that can take everything he can give it, full leverage... well, you (and Niederhoffer and LTCM and Jesse Livermore, et al) know the rest... or, if you don't, you should... especially if THV doesn't do what you seem to expect it to do...

Maybe I just suffer from a tragic view of life... and that's why I mostly trade small for small moves... If I trade against the gap and bottom-fish, even smaller...
 
P2, i didn't see any evidence of any special bottom picking through either the trading or
reading the commentary in the room. i saw what seemed to me lots of guessing, speculation,
and triggered stops. you just seemed to be trying to catch the big one by buying stuff that
was dropping or had dropped and now rebounding. i watched closely but i didn't see anything
else going on there but just that. am i wrong? please tell me where?

:-/


____________________________________________________
FREEZE TURKEY!!!
 
irrespective of whether p2 is a talented trader the fact is that ANYONE can be very profitable for a long time without being "taken out" by this method of trading. It's because of the "unforeseen" events that give the trader a huge one-time loss that the opportunity is there in the first place to make the lots of small profits.

It's called be in the insurance business. If nothing seriously bad ever happened by why would anyone buy it?

Option sellers do it, bottom pickers do it, market-makers do it - your job is reap enough of those small profits to cover any of those unexpected events. Trade relatively small for your account (as in an order of magnitude smaller than a "normal" trend follower risk percentage of between 0.5% and 2.5% of equity) and chances are you will survive your "blow-out" event. It's not a question of if it happens, its when.

Read "Fooled by Randomness" for the ultimate critical guide to this style of trading.
 
Trying to pick apart a methodology that works for someone else just because it's not for you is ridiculous. The bottom line is what counts.

I would suggest that P2's success is based on 2 factors.

1-It violates conventional wisdom. (The trend is your friend).

2-He has the courage of conviction to pull the trigger and hold on to correct trades, and the market sense to get out of bad ones.

I think that most traders' failure stems from inability to pull the trigger, over-eagerness to pull the trigger when there's no valid reason (self churning), and chickening out of decent trades at the first hesitation when they would have made money if held a little while longer.

Just my 2 cents.
 
I think that there is little or no chance of me washing out. My total positios are way too small to have a significant effect on my total account. I have not had an event (series of losses) in a year where I lost over 15% of my account from an account top to a low. I have only had about 3 times where I lost more than 10% from account top to low. Like yesterday, I really sucked. Sucked big. I lost about $7500. Not a good day. But that's not too much for my account. I know I can make it back in a week or so (I'll probably make more than that in a week). The worst type events for me are things like sept 11, I was long over 130% going into sept 11 morning and I bought into the dip in the premarket before the halt. Other stuff that really messes me up are things like CURE. That halted and reopened down 5 or something. I survived that fine even though I was down like 25k at one point. I even managed to make about 5k net on the trade when I finally exited at 10. I think that what I do isn't impossible, but it's not as easy as you make it to be. It's not just dumb luck, though sometimes, that's all it is.
 
"as in an order of magnitude smaller than a "normal" trend follower risk percentage of between 0.5% and 2.5% of equity"

I could be wrong, but it sounds to me like P2's got a higher than 2.5% risk of loss going before he's done with his first cup of coffee... and certainly on many days, if not every day...

and that's the tendency, anyway...

and, as you're probably aware, maximum percentage loss is just an assumption...

To some extent, I'm talking about tendencies internal to the approach, which presumaby may not reach full fruition until some much later date, and, almost definitionally, in some unexpected form.
 
I know you are talking about 5 sigma events. I thought that sept 11 was one. If I don't risk more than about 20% of my account on any one intraday trade and about 15% of my account overnight, I think i'm pretty safe. It's rare for a stock down 50% to loose half it's value again.
 
while i wouldn't want this to be misunderstood in any way by somebody who's just starting out, for whom it would most definitely mean a severely deplenished bank account, i really want to congratulate you, praetorian, as somebody who knows what they are doing, on your ability to handle big position sizes and volatile equity swings.

big ups, big downs.

small ups, small downs.

that's all it is, really, at least once you know what you are doing and have the necessary discipline to go through with that.

cheers
 
Kymar,

OK I admit my description wasn't pinpoint accurate to describe what I meant. Of course we're not talking about limiting risk to 0.5% or 2.5% of the account - what I'm talking about is trade sizes. For example if I make a market in the QQQs (only buy the bid sell the offer say in 10 cent jumps) and my normal trend following trade size was 10,000 shares then for a market making strategy I would do about 1,000 shares per trade or less in the knowledge that my position could exceed 50,000 shares. 50 * 10 cent adverse moves being filled on every level with no gaps.

Bottom picking, selling vols or market-making is just another valid strategy. The difference is it requires you to keep your individual trade sizes relatively small for your account size - that's the point.

The problem being of course the stragegy has a very high percentage winners, very low win:loss ratio. Eventually with that combination your ego starts to make you think you're good and you jack up your trade size beyond what is safe for your account....

Apologies if my previous post was misleading.
 
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