i know this is obvious, but...

Discussion in 'Trading' started by Gordon Gekko, Dec 4, 2002.

  1. GG. you said you don't care about poker, which is fine, but you also failed to make the connection between poker and trading which is NOT fine.

    It shows a lack of ability to analyze what others are saying (or is it a lack of ability to HEAR), which is either willful self-imposed ignorance or you are just plain stupid. I don't think you are stupid.

    Poker IS trading, which is to say that every good trader does the same thing that every good poker player does...managing risk, cutting losses, running profits ETC.
    #51     Dec 5, 2002
  2. ElCubano


    So would you say a good poker player will be a good trader???

    I dont think so ( imo ).......I am just asking....Anyways my game is Dominoes.....:D
    #52     Dec 5, 2002
  3. Dantheman,

    or maybe i've never played poker in my life. i previously stated i don't play cards much. which is why i asked how a "tell" relates to trading, something i'm familiar with.


    i know you didn't ask me, but i've read to add less and less size when you add. so say you start with 300 shares, maybe next add is 200.....then the next one 100. that way, if an add does go against you, it shouldn't erase all the gains of the previous portion, as long as you got out of the most recent add before the previous entry price.
    #53     Dec 5, 2002

  4. bolt,

    you're in and out on the winners. is the same true for the losers with no stop loss or drawdown limit? holding a loser w/o a stop loss, nominal loss limit, etc., is not hedging - and the risk is not necessarily in check as you ride the rollercoaster of the loser! if one views risk in terms of position size and time in a position, hedging by averaging out is a viable trade strategy - and the one i use - risk is hedged via fading S/R by lessening shares held and shorter time in position.

    i am trying to develop an angle where i add to the position once it is profitable. i need some sort of trend filter - or more likely i just need to train my brain better via more experience and post-trade analysis - in other words, i am the weak link and the system can be optimized by improving myself, not adding an unlimited amount of filters/indicators.

    this is very difficult - evolving from pure scalp with some upside hold say: 75% out at first level and hold 25% for slightly longer, say to next S/R level. then the stop-loss is moved up with the remaining 25% position. a more profitable strategy may be to add greater shares initially, then add 1/2 again at first level then 1/2 of 1/2 or 1/4 at next level. as i read this to myself, i suspect im trying to blend strategies... with the profitable scalping strategy, maybe as i increase the base share size, taking 75% profit and holding 25% may be more acceptable, since the initial profit is larger and the 25% position held is laos larger. i just may miss the big trend days in lieu of more consistent, smaller profits.
    #54     Dec 5, 2002
  5. stu


    Gordon you are kidding right?
    A "tell" is a term used in poker you know that much. The term doesn't exist in markets, you must know that. Extending this across to trading, a "tell" can only interpreted to be your reason to make your trade.
    Your doing this to encourage lots of silly posts aren't you (including mine)? You want to see how members of ET can tie themselves in knots and argue themselves silly in the same way as was done with zero sum? If they can't define that you stand no chance with a TELL !! :D :D
    #55     Dec 5, 2002
  6. Elcubano posted:

    I'm not saying a good trader WILL be a good poker player. Wherever your passion lies, there is your skill as well. I do know this, I now understand that playing poker has little (note i did not say "nothing") to do with the hand(s) you are dealt and infinitely more to do with your "hand management" as it were. Poker is all about EXITS, trading is all about EXITS.

    If one is a good/great trader they have developed the fundamental skills and talents that make good/great poker players.
    #56     Dec 5, 2002
  7. ElCubano


    got ya...thanks for the reply....
    #57     Dec 5, 2002
  8. dottom


    I have always, always felt that ENTRIES are always MUCH MORE important than EXITS. I have my own proof of this but I am not willing to share at this time, sorry, but it involves some proprietary stuff I'm being paid to do for hedge fund.

    Nonetheless, to take the poker analogy, if you consider when to BET or RAISE as your "entry" and FOLDING as your "exit", you can ask any professional poker player which is more important and they will tell you that knowing when to BET or RAISE is more important than FOLDING.

    I'm not saying that EXITS are not important, for they certainly are, but there is too much trading folklore out there saying that EXITS are the most important. That you can take any random entry and apply great exit and be profitable. How about taking a great entry and applying a random exit??

    Look at it this way:

      (great ENTRY + average EXIT) > (average ENTRY + great EXIT)

      (great understanding of when to BET and RAISE + average folding ability)
      (average understanding of when to BET and RAISE + great folding ability)

    I should know because I used to be a professional poker player (made my entire living playing poker and nothing else).

    Think of it another way, and ask any short-term prop trader, where there is so much pressure on risk management and cutting losses extremely quick, would you rather have the ability to:

    1. pick a great entry where the market takes off in your direction, use whatever stop method you like to exit

    2. pick a so-so entry where the market moves above and below your price, now you require a great ability to exit to maximize profits/minimize losses
    #58     Dec 5, 2002
  9. ElCubano


    If a good win ratio is 40% ....I think exiting would be of much more importance.....

    besides as I have said before:

    A bad entry can cost you your stop
    A bad exit can cost you a Nut.....:D
    #59     Dec 5, 2002
  10. dottom,

    i need to ask you , what is a great entry ?? can you know if its a great entry before you take it ?? herein lies the corundum. a great exit--one that fits your rules--can be known before you take it. a great entry--even if it fits your rules--- may not be great after it is executed--therefore great entries can only be known in hindsight, but great exits can be known with foresight.
    hopr this makes sense .


    #60     Dec 5, 2002