Cutting losses is for losers

Discussion in 'Trading' started by mrmarket, Jun 20, 2003.

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  1. The reason why idiot daytraders cut their losses on their losing positions is because they have no idea what they are buying.

    Since I am a quantitative momentum INVESTOR, with the elite training associated with my Wharton MBA, all of the financial info I analyze and process reveals to me EXACTLY what I'm buying.

    So...if a stock I purchase moves into negative territory, that's not a problem. They almost always come back to provide returns superior to the S&P 500.

    That's why my track record is so amazing. That's why I am $$$MR. MARKET$$$.

  2. Mr. Market,

    I keep my losses small so that they can't grow into big losses.

    -- ITZ

  3. That's one way to do it. Another way is to hold stocks in great companies whose earnings will propel the stock price to where it should be.

    Earnings earnings earnings...
  4. okwon


    This is one of the key differences between traders and investors, what they do with losers.
  5. True...and its the one advantage that INVESTORS have over traders. Traders are reading the psychology of the market..sort of like the way a dog sniffs for his food.

    Investors use the higher intelligence that they have along with the superior knowledge that they have garnered.
  6. okwon


    LOL! I'd say you're looking for a fight saying that on a board full of traders. The way I see it, there are both successful traders and successful investors. Two completely different skill sets. Comparing one to the other is apples to oranges. Both can make a lot of money if you're good at what you do.

    Ok I don't know why I'm even posting on this thread. Must be boredom.
  7. OHLC


    Seems like Mr Market was never taught statistics nor econometrics...

    The stock market distribution is not a normal 'Gauss' distribution.
    It is often referred to as 'fat tails'.
    This means abnormally large moves are possible in either way.
    A 15% profit or whatever fixed target, when applied to a fat tail environment (for example the stock market from a daily perspective), results in two things :
    -large proportion of winning trades
    -large losses

    Basically, this 15% rule does not allow any profit from the large unusual moves. Regarding losses, it allows the huge moves to actually develop against the position.

    Of course, the number of winning trades is important, just like the number of loosing trades using very tight stops would be.
    This is psychologically comfy, Mr Market delays the time when he will have to recognize his failure.

    But anyway, this way of doing has a really negative expectancy.
    I hope Mr market will be back in a couple of months, showing us how much he lost by letting his positions go against him 100% , and quickly cutting any gain on the profitable trades.

    I see that Mr market has no understanding of money management.

    Mr market is a hugely uneducated dwarf.

  8. Ken_DTU


    I hope nobody takes idiots like mrmarket seriously. People who post crap on yahoo message boards are part of what gives professional daytrading a bad name.

    Small stops are critical to success. So is careful, quick technical analysis using t/a.

    Paper performance records are crap. Show me an audited brokerage record. Oh you don't have one. What a Big surprise. You claim such good "performance", show me your audited broker record.

    I say this to anyone with a paper "performance" page. I do not have such things, because, like the CFTC warns, they do not account for slippage nor reality in trading. Paper hypothetical performance records are misleading/snake oil territory. Any disagreements?

    Baron, I'd kick spammers like "mrmarket". Gives ET a bad image. Guys like Brandon and Bright, who are focused on education, are helpful. Crap like yahoo message board posters, is not. Go back to yahoo, mrmarket. Take your meat and cheesy stuff with you. Please.

    my .02. And no I'm not going to respond to any comments from 'mrmarket' yahoo man. It's beneath me, and other ETers.
    But you can bench press a lot. That's impressive. Tell us about fitness, something you Can do. More valuable than your bs stock stuff. Nobody's buying. Leave ET.

  9. funky


    mrmarket i have some questions for you:

    1. what does quantitative momentum mean (specifically what does the word 'quantitative' imply?)

    2. is the financial INFO you analyze (the same info that accountants fix to make their company look good) truly reveal EXACTLY what you are buying?

    3. if the stock you buy goes against your position, would you say it was the INFO or possibly something else that caused it?

  10. JT47319


    What's earnings? I don't know. What's P/E ratio? Dunno what that is either.

    Don't know, don't care.

    You are an investor. Not a trader, that is the fundamental difference and why this is really a waste of your time and ours. Do I really care about the condition of the US economy and where its headed when I trade the ES? No.

    Traders make markets. That is the nature of a trader, not the amateuristic delusion of "daytrading" popularized on CNBC. Options floor traders, pit traders, market makers, and specialists. That is what we are in electronic form.

    Does the specialist really care about the fundamental reality of his stock that he's in charge of? Nope. He's just there to play the spread, to dole out stock expensively or accumulate it on the cheap. Do this a few thousands of times a day and you can see why being a specialist is one of the cushiest jobs there is and why they're rich. Do you really think they invest in the stock? They TRADE it.

    Traders make markets and provide the liquidity that "investors" and instititutions require in order to form an orderly and efficient market.

    So you're a good investor. Good for you. But that has nothing to do with this forum.
    #10     Jun 20, 2003
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