Is what I'm reading in the other thread true, that he lost 312K in a single TF trade by averaging heavily into a trade that went against him? If so, I think I just lost whatever ounce of respect I ever had for him as a trader. The reason I just lost all respect for him as a trader, is because he always pretends to be something he is not, which someone who is concerned about avoiding risk by waiting for the proper setups, etc. The problem is he adds to losing trades with leveraged instruments, so he is someone you should stay away from if you fear losing money! What I find funny is that I see he has a new video on YouTube where he calmly talks about this as being another learning experience. LMFAO! How about the learning experience being not to play heavily with leveraged instruments the way Robert Hoffman does! The problem with him is, while he does seem to have a good feel for the market, and seems to present the calm image of someone who is conservative about taking the best setups, his strategy of adding heavily to losing positions will ultimately blow one's account out. It may not happen for a while, but it WILL eventually happen if you trade like hime. The real lesson is stay away from traders like Robert Hoffman who are playing with fire with heavily leverage instruments. Even though it APPEARED Robert Hoffman could pull it off and take money from the market, even he himself. His loss IS a learning experience....and the lesson is don't trade like Robert Hoffman. You'll ultimately get your head handed to you, just like he did. His setups likely work most of the time, but all it takes is ONE TIME for a setup to fail when he averages in heavily and BOOM he blows up his account. What a joke! Lesson learned! Stay away from him, except for entertainment! Sorry, Rob, you're probably a nice guy, but I just lost all respect for you as a trader. ADD: If, by any chance, he's still up for the year from his TRADING (not marketing or subscriptions), then I'll rethink my stance, but I doubt that to be the case.
Cutting losses quickly, with emotional detachment is the hallmark of a good trader. Adding to a losing position only compounds the problem. Martingales often require deep pockets, and at least strategically timed installments. A loss well into 6 figures gets no sympathy from me. To quote Paul Tudor Jones: "only losers average losers".
while 312K is not a small loss, it needs to be put in context. my understanding is that this type of loss has not happened to him for at least 2 years. what's his average daily win? did the loss put his account back 1 month, 1 year or 10 years?
312k seems a lot for one trade but how large is this compared to average loss ? i think there are these 90% probability of win trades out there where you need to push. Maybe was one of these, in his mind at least. He did not exhaust his account looks like. If I thought setup gives me 90% chance of win, would probably bet 20-30% of NAV or maybe even more. Assuming not trading small markets.
I suspect it IS a big setback for him, subscription fees notwithstanding. Also, I think that people who try to trade like him will lose more frequently than him and blow up their accounts quicker than he does.
http://www.elitetrader.com/vb/showthread.php?threadid=215669 Apparently he kept adding aggressively to his losing TF (Russell futures) position, until he held more than 800 contracts. His broker (Infinity) eventually liquidated him. In the video below Hoffman claims he was adding to a winning position, although others say it was to a loser. http://www.youtube.com/watch?v=_bIpUVA9308&feature=youtu.be
Apparently in the past he averaged down losers continually until he is one tick in the green. So..........this loss had to be gigantic compared to his wining days. Like the guy who started this thread mentioned, all it takes is one time, for this type of strategy to go wrong and your account is history. So the fact that this type of loss hasn't happened in 2 yrs really is irrelevant. He could take his 1 tick profits time after time, but he eventually will lose everything. You will not find one successful trader or fund manager who has lasted in the trading business doing what this guy did.
but maybe he took 5 tick profits quite often as well. he could have made millions before losing 300K for all we know.
Lets face it. What Robert Hoffman does (averaging heavily leveraged instruments) is dangerous. Even if it works for him 99% (or more) of the time he can still blow up his account (and did in real life). For other people who try to emulate him, they will blow up much quicker and easier because they are less good with levels than him. EDIT: and other traders won't have subscription fees to fall back on. (although I can't imagine why anyone would want to subscribe after he blew up his account)
From what people who know him posted, he never had days even remotely close to this. He had mentioned days being up 60 bucks and calling it a day. If 300k was his worst day in two years, his up days better have been 300k or more. What good is it if one day can wipe out an entire account. I get the impression even on his best winning days he wasn't making more than 5-10k....if that. So a 300k loss is like a nuclear bomb hitting the account.