Drawdown: What's your max threshold of pain?

Discussion in 'Trading' started by a529612, Jul 26, 2007.

  1. Daxtrader

    Daxtrader


    LOL
     
    #11     Jul 26, 2007
  2. Obviously you don't know your way around ET yet. But hey, if you want to rise to bait go ahead.

    Ever heard of a collar?

    How about shorting a sector?

    Pairs trading?

    Buying puts?

    Oh, I don't know, it depends upon what you're in, how's that fair answer for that fair question. I mean do you really think that somebody with +3k amount of posts on ET really cares about it?

    Thunderdog = railbird/heckler/sad little man
     
    #12     Jul 26, 2007
  3. Plus 10 points per contract after the first hour or so.
     
    #13     Jul 26, 2007
  4. notouch

    notouch

    Yes but the question was the benefit of hedging as opposed to simply closing your positions and buying back at a lower level. You brought up the subject of hedging as if it was some holy grail but for all you know the OP may have been talking about futures in which case it's much simpler to just close your positions.
     
    #14     Jul 26, 2007
  5. I am quite familiar with the general concept of hedging. My original question to you was if you would kindly quantify, by way of example, the incremental benefit of hedging a position as opposed to simply closing it out and then reinstating it at a future point. Your examples of possible hedges did not quantify the incremental financial benefit of hedging versus the simpler approach. Specifically, I was hoping for a cost-benefit comparison -- a real-world example that you have encountered and employed. My question to you was sincere. Your response to me was somewhat less so. On the plus side, we did learn that you watch those NBC Dateline "To Catch a Predator" shows. I suppose that counts for something.
     
    #15     Jul 26, 2007
  6. Did you not notice that I stated it depends upon what you're in?

    So do you know what the OP is in?

    I certainly do not. There's more to this game than just simply buying and liquidating. At some point you have to evolve from playing checkers to that of chess in order to survive the long haul.

    Just a different perspective from the usual one at ET, black/white. I mean there's a whole thread about scaling out of positions. These types of discussions are elementary at best. At some point the trader must evolve away from the daytrader mentality to survive, but hey, that's just my take as a I run my business.

    My comments towards Thunderdog still stand as well.
     
    #16     Jul 26, 2007
  7. maxdax

    maxdax

    Fact of the matter is that so called traders who simply take the opposite trade in order to hedge losing positions are sooner or later ( most probably sooner)going to have to go back to flipping burgers at McDonalds...

    If you cant accept a small loss , you cant trade.
     
    #17     Jul 26, 2007
  8. If you can't manage risk you will never survive. Trading is only the exectuion of a plan.

    I mean is it only me? Doesn't anyone see that the OP really has no plan to take into account today's action. Is the ability to trade more important than having a plan?

    Live to fight another day and if you don't realize when you are about to be killed or are dying, well then the market will end it for you.
     
    #18     Jul 26, 2007
  9. NY_HOOD

    NY_HOOD

    DO NOT attempt to hedge unless you know what you are doing. during these volitile times its best to be vert stategic about which trades/scalps you make and get out quick. i made a trade very early and bailed. thats been my strategy for the past month.there are always good longs and shorts but you have to grab the trade quickly and not hang around with unrealistic expectations.
     
    #19     Jul 26, 2007
  10. menthol

    menthol

    The only reason to hedge as oppose to exiting your position is that your positions are too large for the market to absorb quickly, or you have a basket of stocks too expensive to unwind one by one so you might as well just sell the index.

    So either Algorithm is trading $100 million plus with a few hundred positions or he doesn't know what he's talking about. Algorithm trading? Yeah you have a clue...
     
    #20     Jul 26, 2007