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Ah, if only I could be a consistently three-sigma trader...
And there's the rub. For me at least. I keep thinking I can consistently pull
off "tail events" at will just because one person, or even ten people out of
two million did it. (Fooled by Randomness, by Taleb).
BTW: Just out of curiousity, how is Richard doing now?
alexander the hopeful
--- Bill Wynne <tradewynne@xxxxxxxxxxx> wrote:
> >You run the risk of blowing out your account.
>
> For the vast majority of people this is very true, but
> consider: Richard Dennis started out with $700.... Different
> times, and I know he gave a lot back, but still: $700 to $500,000,000 (or
> whatever)?
>
> BW
>
>
> >From: Alexander <alexander@xxxxxxxxxxxxxxxxx>
> >To: omega-list@xxxxxxxxxx
> >Subject: Re: Under financed trader seeking solutions to trigger pulling
> >issue
> >Date: Thu, 18 Apr 2002 08:28:40 -0700 (PDT)
> >
> >This is certainly one of the more interesting threads in quite some time! I
> >really appreciate everyone's insights, experiences and lessons.
> >
> >Bluntly put, there is only one solution to being under financed. Don't
> >trade.
> >Banks won't let you open a business loan unless it is enough for you to
> >succeed. EVERY trading book says that you need enough money based on some
> >simple math. Don't risk more than 2%/3% of a trading account on each trade
> >and
> >don't trade more than a quarter of your account in initial margin. I've
> >done
> >Monte Carlo simulation spreadsheets using even high percentage correct
> >systems
> >and it's true. You run the risk of blowing out your account. You might as
> >well
> >just send me your money, I will donate it to a monastery, you will gather
> >great
> >merit and avoid the pain of losing the money yourself.
> >
> >Psychologically speaking bluntly again, too small an account instills fear.
> >That fear will manifest and become true out of fixating on it. From my
> >experience, lots and lots of little losses with too tight a stop. Whittles
> >my
> >account to nothing and with each little loss my fear gets more intense.
> >
> >Was it Oscar Wilde or Jung that said, "We always become the thing we fear
> >the
> >most."
> >
> >alexander the fear-expert
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