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Millionaire
Registered: Mar 2009
Posts: 313 |
01-17-10 09:15 PM
Quote from MarketOwl:
2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.
No the correct approach is to make smaller bets but more of them.
Risk 2% on each of 10 trades instead 20% in one.
Neke is making 1000+ trades a year, he doesnt need to bet big to make huge returns.
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NoDoji
Registered: May 2008
Posts: 8107 |
01-17-10 09:40 PM
Quote from MarketOwl:
Most people here criticizing neke have no idea what it takes to make big money FAST. Sure, you can be conservative and eek out profits steadily but SLOWLY. It is clear that neke wants to make money FAST. In order to do that, you have to have 2 things.
1. An edge. If you have an edge, you will make money.
2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.
"If you have an edge you will make money."
"You have to be able to deal with big drawdowns if you want to make high returns."
Why would you have to deal with big drawdowns if you have an EDGE???
Here's one of many day trading strategies that provides an "edge":
Using a 5-min chart, wait for the first 30 minutes to establish intraday support and resistance, then sell the first lower high of the day or buy the first higher low of the day with a stop placed just outside the lower high or higher low.
Look at some of the popular day trading stocks Friday and notice how this tactic would play out:
AAPL short for a $3/share gain
BIDU short for a break-even stopout or a small scalp
CAL short for a .45/share gain
X long for a .60/share or better gain
POT short for a 1.00/share or so gain
HIG short for a break-even stopout
And this edge still managed to work on a day when the largest move for most stocks was over in the first 30 minutes.
I agree that leverage is required to make big bets, but don't ever confuse leverage with an actual EDGE.
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MarketOwl
Registered: Nov 2009
Posts: 126 |
01-17-10 10:21 PM
[QUOTE]Quote from NoDoji:
Why would you have to deal with big drawdowns if you have an EDGE???
Because the edge is not 100%. Even with a very good 3-2 win ratio on 1 to 1 risk reward trades, you will have occasional bad streaks of more losses than wins. That's where you get big drawdowns.
By the way, have you ever traded $400K like neke? You sound like a know it all but don't have the results backing up your words.
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MarketOwl
Registered: Nov 2009
Posts: 126 |
01-17-10 10:24 PM
Quote from Millionaire:
No the correct approach is to make smaller bets but more of them.
Risk 2% on each of 10 trades instead 20% in one.
Neke is making 1000+ trades a year, he doesnt need to bet big to make huge returns.
What? Maybe he has a smaller edge than you think and needs to lever up to get the type of returns that he's been getting.
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Trader666
Registered: Sep 2004
Posts: 8151 |
01-17-10 11:24 PM
Great recipe for LOSING BIG MONEY FAST.
An edge doesn't guarantee you squat if you squander it with a series of oversize "bets" and bad decisions.
Quote from MarketOwl:
Most people here criticizing neke have no idea what it takes to make big money FAST. Sure, you can be conservative and eek out profits steadily but SLOWLY. It is clear that neke wants to make money FAST. In order to do that, you have to have 2 things.
1. An edge. If you have an edge, you will make money.
2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.
Seems to me that neke has both, and is willing to risk big sums to make big returns. That's how you make big money. Not by overexcessive risk control.
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NoDoji
Registered: May 2008
Posts: 8107 |
01-18-10 12:00 AM
Quote from MarketOwl:
[QUOTE]Quote from NoDoji:
Why would you have to deal with big drawdowns if you have an EDGE???
Because the edge is not 100%. Even with a very good 3-2 win ratio on 1 to 1 risk reward trades, you will have occasional bad streaks of more losses than wins. That's where you get big drawdowns.
By the way, have you ever traded $400K like neke? You sound like a know it all but don't have the results backing up your words.
Firstly, I have not traded a $400K live account, but have traded a large sim account from July through the present and found that using leverage as an edge instead of waiting for ideal setups and playing them big is a loser's game.
Secondly, I'm a noob, having less than 2 years total trading experience and only a year and a half of day trading experience.
Thirdly, trading is my sole source of income and my live trading account size is around $52K, so I cannot safely be a cowboy (er...cowgirl) trader. Instead I have to use my positive expectancy and patiently wait for ideal setups. I still screw up by being too patient and missing great trades and by occasionally overtrading and churning to a loss, but at least my losers are small now.
Finally, I achieved a 40% return last year DESPITE some significant losses (one of them over 10% of my account) where I averaged into losers or held them way too long because surely the market would come to its (my) senses.
P.S. if you have bad streaks of losses resulting in big drawdowns, then you're edge is failing and it's time to start fresh.
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