Winning or Making Money?

A

alex.samant

I just wanted to start this thread with an issue that i hope will start a healthy debate.

The reason i started this is that many educators, in my opinion, do not stress the difference between what i consider two completely opposite concepts in trading, unlike other fields of activity.

Needless to say, that without education, newbies are lost because it could take them a while to even get to this dilemma.

The main question is:

"What is your take on the subject?" :)

Cheers and thanks in advance.
Alex
 
Hi Alex.Samant,

I would just like a bit of clarification.

You mention two "different" items. Are you asking about "trading"
and "educating" as the 2 differences?

Or the difference between winning and making money?

There was a great small piece written by Lewis Borsellino on his view on winning and making money. I would listen to him because he did become for a while and is still close, to being the largest independent S&P trader in the world.

Successful trading,

Alex L. Wasilewski
Co-Founder & Head Trader
Trades That Work
www.puretick.com
 
Quote from Spectra:

Hi Alex.Samant,

I would just like a bit of clarification.

You mention two "different" items. Are you asking about "trading"
and "educating" as the 2 differences?

Or the difference between winning and making money?

There was a great small piece written by Lewis Borsellino on his view on winning and making money. I would listen to him because he did become for a while and is still close, to being the largest independent S&P trader in the world.

Successful trading,

Alex L. Wasilewski
Co-Founder & Head Trader
Trades That Work
www.puretick.com
More...

Hi Alex

Question for you re your services/chat room:

It's well known that the YM is not as liquid as the ES or NQ, and since you are a scalper, I was wondering, how do you deal with the slippage that comes from having dozens, if not hundreds of your subscribers entering at the same time as you are? I know that some will take signals and others won't, but isn't that a real problem at some point?

Thanks for your clarification
Maverick
 
Yea Alex, i wasn't very precise. The two issues i am striclty referring to is "WINNING" and "MAKING MONEY" ( aka Growing equity).

I want to see what you think of the corellation between these two.

And i don't want to hear: "Well, when you are winning you are gowing equity... so win as much as you can ..... " :)

There are aspects that lie in the field of psychology and others in money management. And i think everyone has his or her own examples of the "eurika" moment... Just share them ...

Alex Samant
 
Hi Alex.Samant and Maverick,

Sorry to ignore some well thought out questions. I have been a little distracted today watching playoff football and reading a couple of truly wild non-trading sections where some subscribers have called me too old, violent, live in a trailer, and a snake oil salesman. They got one thing right. I did sell door to door knives for a month when I was in high school.

To address the success as compared to making money issue, I would like to recap what 3 out of the 4 advisors with whom I personally traded advised me and what Lewis Borsellino, one of the most successful and largest independent S&P traders in the world has said. I am recapping from my notes but I will quote so as not to take credit for his words.

“The first commandment in the 10 Commandments of Trading is to trade for success and not for money. When a newbie handles more risk than he's been used to, he begins worrying only about the money. That will impact his trading decisions.”

I will admit that during the first couple of years that I made the transition to short term trading that money was the only barometer I used. Gradually when I was given specific rules and a plan to trade by, then following that plan became the barometer for success. That was a tough transition. Interestingly, after the room became public, it became a heck of a lot easier avoiding emotional trades. People in the room would instantly ask, “What the heck made you do that?” They know my methods. Subscribers would start leaving if I couldn’t follow my own rules.

As to the question of the Puretick room members and myself controlling the market, well that would be a dream, wouldn’t it? I would love it if we were following the market, watching it come down after a big run-up, watching some stops perhaps getting hit on the way down, telling the room we are getting ready for a buy signal. Then issuing our standard
[II] ROOM CALL BUY ALERT. [II]
And the market stops dead in its tracks and move up.

Unfortunately, there are times when we buy and the market keeps going down until it hits our stops. Of course, let’s say that next year we have so many people in the room and assuming they all act at once, which is a big if then we will move to the S&P e-mini. And if we move the market there we will go to the big S&P. Then Lewis Borsellino will be quoting us.

Seriously, I don’t think that ever will happen.


Alex L. Wasilewski
Co-Founder & Head Trader
Trades That Work
www.puretick.com
 
Quote from Spectra:

Hi Alex.Samant and Maverick,

Sorry to ignore some well thought out questions. I have been a little distracted today watching playoff football and reading a couple of truly wild non-trading sections where some subscribers have called me too old, violent, live in a trailer, and a snake oil salesman. They got one thing right. I did sell door to door knives for a month when I was in high school.

To address the success as compared to making money issue, I would like to recap what 3 out of the 4 advisors with whom I personally traded advised me and what Lewis Borsellino, one of the most successful and largest independent S&P traders in the world has said. I am recapping from my notes but I will quote so as not to take credit for his words.

“The first commandment in the 10 Commandments of Trading is to trade for success and not for money. When a newbie handles more risk than he's been used to, he begins worrying only about the money. That will impact his trading decisions.”

I will admit that during the first couple of years that I made the transition to short term trading that money was the only barometer I used. Gradually when I was given specific rules and a plan to trade by, then following that plan became the barometer for success. That was a tough transition. Interestingly, after the room became public, it became a heck of a lot easier avoiding emotional trades. People in the room would instantly ask, “What the heck made you do that?” They know my methods. Subscribers would start leaving if I couldn’t follow my own rules.

As to the question of the Puretick room members and myself controlling the market, well that would be a dream, wouldn’t it? I would love it if we were following the market, watching it come down after a big run-up, watching some stops perhaps getting hit on the way down, telling the room we are getting ready for a buy signal. Then issuing our standard
[II] ROOM CALL BUY ALERT. [II]
And the market stops dead in its tracks and move up.

Unfortunately, there are times when we buy and the market keeps going down until it hits our stops. Of course, let’s say that next year we have so many people in the room and assuming they all act at once, which is a big if then we will move to the S&P e-mini. And if we move the market there we will go to the big S&P. Then Lewis Borsellino will be quoting us.

Seriously, I don’t think that ever will happen.


Alex L. Wasilewski
Co-Founder & Head Trader
Trades That Work
www.puretick.com
More...

Alex

My question wasn't about bullying the market or 'controlling' it. It was about slippage and the deterioration in a scalper's profit margin.

It seems that you are saying that currently, you don't have enough subscribers to impact your fills on the YM and hence would consider trading ES instead if the number of subscribers ever got to be too large. I agree with you that you would have no problems at all with the ES which is the deepest out there, but you will face more slippage than you like if you stick with YM. That's almost guaranteed.
 
Maverick, do you have anything to say regarding the topic :) ? I'd love every opinion out there. I think this is the dilemma a trader faces at big turning points in his career.
 
Hi Mav,

In theory I agree with you 100%. That is why I am prepared to shift, out of necessity to a larger market.

The only thing I can't explain is why this has not happened yet; at least to the last advisor that I went to take a personal mentorship.

This advisor is very well known, has written a book and numerous articles, has at least 300 people in the trading room, and has had the room for I believe about 3 or 4 years now.

When I was at the guru's office and a room call was made, there did not seem to be much slippage going on. And after the mentorship, I remained in the trading room for a few months and not once did any of the guru's customers complain that they were getting bad fills taking the signals.

You can also go to the CBOT website and find a number of articles where other well known traders state their approval of the DOW e-mini. And the volume has increased in that contract since the articles and my mentorship.

What do you take from that? Maybe the 300 room members are really not acting at one time? That might be true. I don't know. Maybe there are more funds using the DOW as a hedge?

Maybe it's the arbs keeping it in line? I can't explain it Mav. Maybe someone else can come up with a reason.

What was the worse fill you ever got Mav? I don't trade during lunch time and right before Bernanke speaks. My worst slip has been 2 pts. That is 10.00 per contract. For me that is still 2.50 better than the normal price one has to pay for the S&P spread.

One of the people who govern the trading of the S&P stated that the spread there is wider in order to accommodate the floor scalpers, that there is a built in slippage for them to make a living. Remember the howls when they went decimal?

Who do you think pays for the price spread on any contract?

So in theory I agree with you though I don't think I am ready to guarantee that we will be unable to trade the YM in the near future because of unacceptable slippage.

Good trading tomorrow.

Alex L. Wasilewski
Co-Founder & Head Trader
Trades That Work
www.puretick.com
 
Quote from alex.samant:

Yea Alex, i wasn't very precise. The two issues i am striclty referring to is "WINNING" and "MAKING MONEY" ( aka Growing equity).
Alex Samant
More...

In short I think that it goes like this.

When a Trader begins to trade, and before he/she fully appreciates the mechanics of the market and therefore has only a slender grip on the odds, then he/she is winning and losing.

As knowledge improves, the winning will improve but never the less it is still winning.

When our Trader reaches that point of focus where he/she has all aspects of a plan working in harmony and when the results of the trading are inline with the expectations of the plan , then and only then can our Trader be considered to be making money.
 
you can spend a lot of time at the altar of imitation zen bullshit

or you can trade with a real edge, make real money, build up your real account and then make so much money it no longer matters.

Then and only then will you be trading at the level where the money is only keeping score.

There are no zen short cuts for are real edge. And if you have a real edge you have to be a real nut job to sabotage yourself.
 
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