With System #1 When you zig....you zag......this is a good thing....Actually long straight down or straight up trends are not good...But they will quickly establish your drawdown amount and serve you for several years.... Unrealized P/L is just that! UNRealized! When your backpacking down that trail and counting your steps and getting paid for each one, then the longest distance to the destination is the best... when returning home its all downhill....
Hey, Electric, I am trying to send you a PM but says your box is full, can you empty it for me or PM me your e-mail? By the way, I am with you on the gambling thing, my view is this: Anything that can have an advantage is not a gamble, if said advantage is utilized.. Roulette can never be beaten by anyone no matter how hard they try (table limits, negative expectation, etc) and therefore is a gamble. Now, with trading, many "edges" exist that can be exploited over time, it's just most traders fail to do so or recognize them. In options volatility skew is one of these very real edges. Want proof read Natenberg's classic. This is fact. So, to restate, trading definitely does NOT have to be a form of gambling when operated on a mathematical advantage. Are markets fair or efficient? Well, this is the age old question isn't it? Kinda like nature versus nurture, or evolution versus creationism. I think here, it's a bit easier. There are far more people in history that have made fortunes in trading than can be attributed to statistical anomoly. I think it is very difficult to succeed however, and even moreso to do it for the long run, but it can be done. It can be done because as efficient as the market tries to be, there are always new inefficiencies which can be exploited for at least a period of time. There are not inefficiencies in roulette, or blackjack.
Emptied... Thanks for all the PM's...Folks. For a worn out topic, there was room for more debate, in my little world... Michael B.
Hi, I found this post interesting. It's always fun to go through the older posts which seem to have some very useful info from some smart folks.. http://www.elitetrader.com/vb/showthread.php?s=&threadid=18643&perpage=1&pagenumber=215 Hope the link works (modded it to show 1 post per page, pointing directly to the relevant post). If not, I have quoted the post from 'Scientist' that I found pertinent to the thread. Hope he doesn't mind that I am quoting him here: Have fun trading this week, lady and gentlemen!
according to Webster: Main Entry: 1gam·ble Pronunciation: 'gam-b&l Function: verb Inflected Form(s): gam·bled; gam·bling /-b(&-)li[ng]/ Etymology: probably back-formation from gambler, probably alteration of obsolete gamner, from obsolete gamen (to play) intransitive senses 1 a : to play a game for money or property b : to bet on an uncertain outcome 2 : to stake something on a contingency : take a chance transitive senses The narrow definition would define gambling as betting on a game. The equity/debt/derivitive markets are not games. Therefore it is not. The broad defenition is: All type of activity for money is gambling: start a business: you have uncertain outcome work for a company: the company may go out of business and you don't get paid, etc.
chance, luck, gamble....blah blah blah.. unknown outcome, faith and choices.... money greed and adrenilin.... There are consistantly lucky traders then...they are blessed...give me a break! Does anybody believe this? Why am I talking about this? Trading is not gambling.
Thanks for digging this up. This is by far the most worthwhile post made all day. imo life itself is a gamble and an endless series of tradeoffs where the actions you don't take most often will cost you more in lost opportunites than the actions taken. Good luck to you too.....and yes, I do need the luck
As we were discussing "gambling or not" the USD/CHF hit a target at 1.1987...I was not even paying attention, but I had time to replace the trade. If I were gambling, would my hands be sweating and would I be watching every pip? Yes! I am more concerned about being effective and getting the replacement trades entered... I replaced the trade and re-entered the limit order...as I never know if its going dip back down and get that entry again...But if it doesn't it will catch the next target...or if it dips too far the other side will catch the target... Volatility Grabbing is a different way to look at the market... I do not even know which side will trade next...I don't care...its like a teeter-totter...one side goes up, the other goes down...targets in between.. Straight up or down moves over several days establish a nice wide, comfortable max unrealized P/L...(it can only grow larger, it never shrinks, but you might say this is a bad thing, but I don't, because what moves like that returns...) Michael B.
System #2 just sits there collecting interest Its current Unrealized has improved to -31.24.... I might do some adjusting in the morning if I can get some money off the trades at a higher rate than the interest pays... If I take some trades, I must figure out how to get more money back in though. That is alway a problem...I prefer just to carry a positive unrealized and collect the interest......(you must be careful with this because you have more margin than usual when positive...so be carefull how heavy you get in). see the spreadsheet... Michael B.