Comments on: Friday’s Trades and Results http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/ Futures Trading, Custom Programming, and Commentary Fri, 05 Mar 2010 06:12:03 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: uglychart.com » Blog Archive » links for 2007-09-18 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4636 uglychart.com » Blog Archive » links for 2007-09-18 Tue, 18 Sep 2007 04:28:52 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4636 [...] Friday’s Trades and Results :: Move the Markets :: Entries :: The great R debate continues… (tags: trading stocks blogs) [...] [...] Friday’s Trades and Results :: Move the Markets :: Entries :: The great R debate continues… (tags: trading stocks blogs) [...]

]]> By: Ugly http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4627 Ugly Tue, 18 Sep 2007 01:10:20 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4627 DinosaurTrader says: "If I make a trade with 400 shares and the guy next to me makes the same trade with 4000 shares, he absolutely made a better trade. Why? Because he made more money. That is the only metric that counts when trading. It is much more difficult to trade with greater share size… that’s why it’s a better trade. It’s more difficult emotionally but also practically…" That makes more sense with two traders of the same account size, but what if the guy next to him manages a hedge fund with $200 million - that 4000 share trade is nothing. Your 400 share trade would be more difficult emotionally than the 4000 (unless you have a $200 million account). Or if you were trading MSFT - 4000 shares is nothing - no practical difference really in the trade. So does the more $ profit still signify a 10x better trade for the 4000-share trader? I don't think so. R just simply shows you how much you make/lose compared to how much you risk. More money is not always better - look at Brian Hunter. R is a nice measurement because it is important to consider what was risked in comparison to the profit. DinosaurTrader says: “If I make a trade with 400 shares and the guy next to me makes the same trade with 4000 shares, he absolutely made a better trade. Why? Because he made more money. That is the only metric that counts when trading. It is much more difficult to trade with greater share size… that’s why it’s a better trade. It’s more difficult emotionally but also practically…”
That makes more sense with two traders of the same account size, but what if the guy next to him manages a hedge fund with $200 million – that 4000 share trade is nothing. Your 400 share trade would be more difficult emotionally than the 4000 (unless you have a $200 million account). Or if you were trading MSFT – 4000 shares is nothing – no practical difference really in the trade. So does the more $ profit still signify a 10x better trade for the 4000-share trader? I don’t think so.
R just simply shows you how much you make/lose compared to how much you risk. More money is not always better – look at Brian Hunter. R is a nice measurement because it is important to consider what was risked in comparison to the profit.

]]> By: Dinosaur Trader http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4614 Dinosaur Trader Mon, 17 Sep 2007 21:17:02 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4614 Prospectus, LOL, That's good! I think the question we need to answer is, "How would Mr. Rodgers post his trading results?" He was a straight shooter... I'm guessing dollars and cents. -DT Prospectus,

LOL, That’s good! I think the question we need to answer is, “How would Mr. Rodgers post his trading results?” He was a straight shooter… I’m guessing dollars and cents.

-DT

]]> By: Prospectus http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4612 Prospectus Mon, 17 Sep 2007 20:04:58 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4612 I will start posting my trading results in "Zero-Sum Freak-Race Risk Multiples" and then everybody will be happy. I will start posting my trading results in “Zero-Sum Freak-Race Risk Multiples” and then everybody will be happy.

]]> By: Bubs http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4611 Bubs Mon, 17 Sep 2007 19:35:54 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4611 I prefer actual P&L instead of "R" calculations but the way I have been trading lately I'm not making either I prefer actual P&L instead of “R” calculations but the way I have been trading lately I’m not making either

]]> By: Richard http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4610 Richard Mon, 17 Sep 2007 19:26:38 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4610 I don't feel compelled to follow flawed thinking just because it's been around since the market began. :-) This part of the argument is silly, though, since there's no one measure of trading greatness. Profit is one aspect, as is expectancy, and risk of ruin, and the size of their... track record. If you search around, you will find the zero sum debate on several blogs, including this one I think. There are always people on both sides of that one. I don’t feel compelled to follow flawed thinking just because it’s been around since the market began. :-) This part of the argument is silly, though, since there’s no one measure of trading greatness. Profit is one aspect, as is expectancy, and risk of ruin, and the size of their… track record.

If you search around, you will find the zero sum debate on several blogs, including this one I think. There are always people on both sides of that one.

]]> By: Dinosaur Trader http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4609 Dinosaur Trader Mon, 17 Sep 2007 18:29:54 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4609 Being a great trader isn't just about one trade and I'm not arguing that. I'm just saying that since the market began, people have measured traders and their performance by money earned. The more you earn, the better you are. It's a crude measurement, sure, but it's the market. Meanwhile, is there a debate about the market not being a zero-sum place? It makes the point about why share size is important to consider when valuing how "good" a trade was. There are a finite number of shares available at a given price and time. -DT Being a great trader isn’t just about one trade and I’m not arguing that. I’m just saying that since the market began, people have measured traders and their performance by money earned. The more you earn, the better you are. It’s a crude measurement, sure, but it’s the market.

Meanwhile, is there a debate about the market not being a zero-sum place? It makes the point about why share size is important to consider when valuing how “good” a trade was. There are a finite number of shares available at a given price and time.

-DT

]]> By: Richard http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4608 Richard Mon, 17 Sep 2007 18:12:37 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4608 kudos on managing to combine the "risk-multiple results" argument with the "stock market is zero sum" argument, though... two of the biggest flame-bait topics in stock trader blogging, now in one simple package. kudos on managing to combine the “risk-multiple results” argument with the “stock market is zero sum” argument, though… two of the biggest flame-bait topics in stock trader blogging, now in one simple package.

]]> By: Richard http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4607 Richard Mon, 17 Sep 2007 18:03:47 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4607 I will go fully leveraged in deep OTM calls, then, so I have a chance at being the best trader in our community. Wish me luck. I will go fully leveraged in deep OTM calls, then, so I have a chance at being the best trader in our community. Wish me luck.

]]> By: Dinosaur Trader http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/comment-page-1/#comment-4605 Dinosaur Trader Mon, 17 Sep 2007 17:55:25 +0000 http://www.movethemarkets.com/blog/2007/09/14/fridays-trades-and-results/#comment-4605 Since I chide the MtM gangmembers about "R" routinely, I thought I'd weigh in. Richard said, "I mean, you could make the exact some trades with double the position size and make twice the money, but that doesn’t mean you are twice as good a trader. In R terms, traders that take the same trades make the same grades, regardless of their size. So, it’s like a size-normalized performance measure." Listen you freaks, dollars and cents are an excellent metric. IT IS A RACE because trading is a zero-sum game. If I make a trade with 400 shares and the guy next to me makes the same trade with 4000 shares, he absolutely made a better trade. Why? Because he made more money. That is the only metric that counts when trading. It is much more difficult to trade with greater share size... that's why it's a better trade. It's more difficult emotionally but also practically... Okay, now you guys can jump me for bashing the "R." Oh, and I called you "freaks" too.... -DT Since I chide the MtM gangmembers about “R” routinely, I thought I’d weigh in.

Richard said, “I mean, you could make the exact some trades with double the position size and make twice the money, but that doesn’t mean you are twice as good a trader. In R terms, traders that take the same trades make the same grades, regardless of their size. So, it’s like a size-normalized performance measure.”

Listen you freaks, dollars and cents are an excellent metric. IT IS A RACE because trading is a zero-sum game. If I make a trade with 400 shares and the guy next to me makes the same trade with 4000 shares, he absolutely made a better trade. Why? Because he made more money. That is the only metric that counts when trading. It is much more difficult to trade with greater share size… that’s why it’s a better trade. It’s more difficult emotionally but also practically…

Okay, now you guys can jump me for bashing the “R.” Oh, and I called you “freaks” too….

-DT

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