Trading curses

Discussion in 'Trading' started by tradingjournals, Oct 25, 2011.

  1. Asymetry of gain and loss-- A $50 loss on a $100 stocks, needs a $100 gain in the price of stock trading at $100, just to break even. You are still reading, huh. Do I hear what you may be thinking (I do not think there is a typo in the numbers though)?

    Is there a way to turn tables, or at least reduce the curse?
     
  2. Lucrum

    Lucrum


    http://www.elitetrader.com/br/
     
  3. You just figured this out? Let me see. You sound like you are in second grade already this year.

    It is spelled asymmetry. In third grade you will learn how to use online spelling.

    Try to stay in the chit-chat area.
     
  4. I get a fail in spelling, and you get a fail in thinking/answering the question. A fair trade?

    PS: You should have checked the spelling of the numbers instead!
     
  5. For the analytical minds, let me try to explain things differently. The gain to make up for a loss, is a convex increasing function of the loss. In language of options' "gamma", a trader in the above sense, is always short gamma, but unlike in options, a trader does not get a premium for shorting the said "gamma". Is that a reason why traders as a group bleed?
     
  6. Lucrum

    Lucrum

    tradingurinals is a self admitted paper trader, who refuses to admit he admitted it.

    Go figure.
     
  7. wtf.... what is the crud...

    Gamma is the second derivative of option/bond price to the underlying spot/yield.

    What you are pointing out is simply the characteristics of a power series... the differences is non-linear to the percentage change.

    Why you choose to be "analytical" about simple math is beyond me.

     
  8. Because it shows that traders may be selling something for nothing. Are they aware of it?
     
  9. Lucrum

    Lucrum

    Apparently simple to us isn't so simple/easy for him.

    A kind of "Forest Gump meets E.T."
     
  10. Limit your total drawdown to 30% or less using variable position sizing based on the distance to your maximum allowance.

    As you found, bleeding is biased toward death.

    :D
     
    #10     Oct 25, 2011