This sounds a lot like - well, exactly like - Mr. Market's approach. Count the "realized" profits for you, DON'T count the "unrealized" losses against you - even though your money (and possibly a substantially high pertentage of your bankroll) is tied up in this unrealized loss. Unless I'm making substatially more in realized profits vs. unrealized losses, what would be the point?
This is not BS Trade outside of the Box Manage your emotions Look at the big picture Money management and Proper trade size according to proper capitalization for the volatility and trade increment for the instrument (s) you trade.
Quah, Hey what every happened to the great hairy one lol Gawd that was fun.... In spot Forex and retail currency trading, I find that looking over the longer term is a better way to trade currencies. I can say that currencies trend longer. Mr. Market would start several different streams when his Unrealized P/L overcame his profit. I seem to remember this was most of the time. I remain in two instruments that are 90% correlated/hedged. I do not recall his model being like that...My Unrealized P/L remains smaller than my realized P/L and is growing exponetially every day as there is also a slight martingale effect on trade size as my realized P/L grows... Michael B.
Hmm. I missed the "remain in two.." part of your system. I'll have to reread your posts, that of course invalidates my comments above.
Quah, This is not about me and my systems. I just find it difficult to post about things that I do not trade myself or have traded. I have promised myself to NOT post what sounds good, but to post what I know. Lets try another example while you are reviewing: Sorry its another Spot Forex system at Oanda. Attached is a spreadsheet of Oanda's interest rates in Rank order on all 30 pairs. A simple "Averaging Down" will net you enough, just to carry the top pairs in the spreadsheet that I update regularly. You will say WHAT! averaging down...oh Electric....But look at the yields on the spreadsheet first! Just carry those top ranking pairs (I carry three of them that do not move together) and chase the current price around with the average trade price... Is trading gambling or not, what say you? Michael B.
Again Folks, This is not about a trick in how one thinks. Sure you can hold on to losers and wait long enough...tell that to the bubble folks... This is NOT why trading is not gambling. The Buy and Holders are gambling IMHO... Michael B. P.S there are many other REAL EXAMPLES of why trading is not gambling. What say You?
In my opinion, whether or not trading = gambling, depends largely upon the potential for loss on the trade. Gambling and trading both rely on a legal contract that basically says, "In exchange for my wager of $X, you will pay me $Y, if I guess correctly on the agreed upon subject of the wager. Otherwise, I lose $X." Examples: If I am trading long on a stock that pays a 5% annual dividend, then while I may lose my initial trade, I may get all my money back, and more, over the long run. This is not gambling, in my opinion, because, if I stretch the wager out long enough, I will eventually win (unless the corporation terminates its dividend). If I am trading an option, however, and I remain "out of the money" until expiration, then I lose $X, and there is no hope of ever recovering. This exactly satisfies the conditions of the legal definition of a gambling contract, as described above, therefore it "is" gambling. The "odds" may be superior in the "market" as compared to the casino, but the character of the game is exactly the same.
Before I ask Electric to help me reply to you. First look as to WHY the example is an edge. I do not think Electric is suggesting that. I think the example is proof that trading is not gambling...or maybe not.. Wifey
john 47, It is a simple mathematical model that you can take down to zero and up to thousands and thousands....fully hedged and grabbing volatility. However such "too volatile an instrument" will cause trade size to be to small in relation to equity traded (note I did not say risk capital) Michael B.