Prudent Risk Management Is The Only True Edge In TRADING

Discussion in 'Risk Management' started by Buy1Sell2, Jul 6, 2015.

Is Prudent Risk Management the only true edge in trading?

  1. Yes

    55 vote(s)
    30.7%
  2. No

    124 vote(s)
    69.3%
  1. taowave

    taowave

    OP failed along with the 30% who voted for the "ONLYTRUE EDGE"....

    Seriously,there is only ONE ??

    Like Morpheous and Nio???
     
    #801     Aug 27, 2023
  2. ironchef

    ironchef

    @taowave, I have been thinking about this problem for a while. Used to think it is total BS. Lately, I re-read this @Buy1Sell2 thread a few more times and began to wonder.

    To satisfy my itch, I ran a simulation, using a Markov market model (as a null hypothesis), to simulate day trading. Imposed all risk management rules etc., then made a few tens of simulation runs over this weekend.

    Guess what: The net outcome was profitable!

    Either there is an error in my code, or a few tens of cases is insufficient, or maybe we should listen to @Buy1Sell2?
     
    #802     Sep 25, 2023
  3. taowave

    taowave

    There is no question that if you cant control risk,you cant TRADE successfully...

    That was never up for debate...

    Its not the Only True Edge








     
    #803     Sep 26, 2023
    Jzwu2017 and ironchef like this.
  4. ironchef

    ironchef

    OK, professor, enough is enough, I will stop beating the dead horse.

    And I will stop trying to find positive expectancy from trading a set of random number, like inventing a perpetual motion machine.
     
    #804     Sep 26, 2023
  5. taowave

    taowave

    Hey,it could be your edge..Who am I to judge??

    I did like the book, "best loser wins"..


     
    #805     Sep 26, 2023
    ironchef likes this.
  6. savoir

    savoir

    I read it over the weekend. The psych parts are from the Mark Douglas cookie cutter. Regardless, it was a quick read and not dull at all. The reference to Liar’s Poker brought back good memories.

    Would I recommend it to others? Not really. But I wouldn’t not recommend it. I don’t think reading any particular book will turn anyone’s trading around from losing to winning. Anyhow, I now know where you got the “perfect your craft” phrase from that sounded odd to me when you used it.
     
    #806     Sep 26, 2023
  7. taowave

    taowave

    Did I actually say perfect your craft??

    Yikes!!!!

    P.s. If I did say it,I thought it was a Taowave original..





     
    #807     Sep 26, 2023
  8. savoir

    savoir

    Maybe not exactly that phrase which is what I quoted from the book. You repeatedly call trading a “craft” which is what I found odd. I think you told SimpleMeLike to “commit to your craft” in the Newbie thread.
     
    #808     Sep 26, 2023
    taowave likes this.
  9. taowave

    taowave

    Oh yeah," commit to your craft" is definetly something I would say

     
    #809     Sep 26, 2023
    savoir likes this.
  10. Buy1Sell2

    Buy1Sell2

    Excellent posting and thanks for the extra look. Yep, PRM is the only true edge in trading.
     
    #810     Sep 26, 2023
    ironchef likes this.