Luck vs. Skill

Discussion in 'Chit Chat' started by pak, Dec 23, 2008.

  1. pak

    pak

    How many trades and over how long a period of time will answer the question:

    Was it luck or “skill” ????
     
  2. With time and a dose of humility a person can easily recognize the difference between luck and skill.
     
  3. I use this formula:

    Skill = sqrt(numberOfTrades) * (averageProfitPerTrade / standardDeviationOfAllTrades)
     
  4. That's easy.

    If you win, it was skill.

    If you lose, it definitely was luck [bad],
     
  5. :D
     
  6. Luck comes & goes...periodic at best.

    Skill?......Well, skill can last a lifetime as long as ego is absent.
     
  7. It's all skill...unless you make your trades by flipping a coin. If you consistently lose money or blow up, skill is lacking, vice versa. Personally, I think a trader who manages not to wipe himself out with a few trades has much more skill than a trader you makes a few big homeruns but then blows up. PnL is not measure of skill.
     
  8. I'd rather be lucky than good.
     
  9. I got extremely lucky during college in a handful of picks and made more money than I had ever seen. I proceeded to loose 80% of it in LEH, WM and FRE among others. So I know that you can get lucky and in a big way. However I don't think you can figure out it is luck while it is happening.

    Now I am clawing my way back. Funny how you learn something and see the exact mistake you made in the past.
     
  10. Loki

    Loki

    luck won't let you stay in this business for a long time.
     
    #10     Dec 23, 2008