victor n. was 100% right when he said "i can't make money without taking a risk"

Discussion in 'Strategy Development' started by chewbacca, Apr 9, 2008.

  1. i want to apologize to victor n.

    the fellow blew up last august for a 2nd time, and was rumored to be trading his own money afterwards

    in january after the s&p opened down 60 points, i created a thread titled "did victor n. blow up his etrade account?" - i want to apologize for creating this thread

    the truth is that victor was right when he said "i can't make money without taking a risk"

    the truth is that no trader can make money without taking a risk. EVERY trader that makes x amount in for the year has had a MINIMUM of x amount in total losses and drawdowns.........for example you can't make a million a year without having total losses or drawdowns of AT LEAST a million for the year (gains in this case would be 2 million)

    nassim taleb, the arch philosophical enemy of victor, trades the complete opposite of victor........and even he admits in a recent interview that "90% of all the money i made as a trader i made on the day of the 87 crash" - so this guy made one huge windfall and then basically nothing for 20 years

    the bottom line is trading is easy, but hard, and there is no reward without risk (paradoxes everywhere)
  2. MGJ


  3. Depends on what you call "risk".

    If risk is having a DD equal or more than average yearly profit, then not at all, many traders (especially successful daytraders) have drawdowns way smaller than their yearly average.

    From the other side if risk is knowing that ANY trade you take can result in a loss and not a profit, then yes, such a risk is not avoidable in outright trading.
  4. There is ALWAYS a risk.

    It's a matter of how well you control and manage the risk.