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Scott,
I want to compliment you on an excellent post. In my opinion, what you said
is absolutely true. I also find amusing the resumes of the parties
involved. To me, this reinforces a belief that I have long held, that
trading has nothing to do with credentials...but only with the ability to
trade. I remember reading in Market Wizards, the story of one of the
traders who had experienced a large measure of success in his personal
trading and then went to apply for a job as a trader at Commodity Corp of
America. The first questions at the initial interview, were "what articles
have you written and where have you been published," He was eventually
hired with the help of a friend in high places. Over the next eight years,
his trading profits exceeded the profits of all the other traders
combined.....So much for credentials !
All the Best !
Bill Shumake
-----Original Message-----
From: Scot Billington <scot.billington@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Thursday, October 01, 1998 9:17 AM
Subject: Long term capital
>The recent failings of Long Term Capital illustrate the first and most
>important concept for a new trader, exit strategies and bail out points. I
>don't care about AMI, Elliott Wave, astrology, systems, fundamental
>analysis or Moses speaking from up on high, if you don't have a point at
>which you will exit every position, you will eventually go broke. You are
>not different or special. No exit, no money. This group had Salomon
>Brother's ex-bond chair, 2 Nobel Prize winners, and an ex-Federal Reserve
>vice chairman, yet they forgot the number one rule of trading, cut losses
>short. I don't care what you think, what your model says, or that the
>market can't go down because of XYZ, you must have a level at which you
>will not lose anymore money. There, literally, is no other way. Most
>things in trading can be done multiple ways. This is not one of them. If
>you are trading without a stop or exit level, stop before you lose all your
>money. You will. V. Niederhoffer (?), the other large fund to recently go
>belly up, was famous for trading without stops, too. (Isn't it odd that
>these two groups had one thing in common and they both lost all their
>money.) No stops may work for a decade, but the historically off the
>standard deviation charts move is coming at some point, and if you have no
>exit, you will go broke.
>
>If you disagree with these premises, I encourage you to respond with your
>points. The ensuing discussion may save you quite a bit of money because
>you are faulty in your reasoning.
>
>sb
>
>
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