Market Wizards

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Aussiedoc
Trader
Posts: 270
Joined: Tue Dec 13, 2011 8:10 am
Location: Western District. Victoria. Australia

Re: Market Wizards

Post by Aussiedoc »

Khalid, thanks again! :D :D :D
If you can never exceed your own expectations - why expect second-best?
alifari
Posts: 4
Joined: Tue Dec 27, 2011 4:53 pm

Re: Market Wizards

Post by alifari »

Very inspiring, keep these gems coming. Thanks

Alifari
alifari
Posts: 4
Joined: Tue Dec 27, 2011 4:53 pm

Re: Market Wizards

Post by alifari »

Tony Saliba Quotes - Loved it

Thanks
garyfritz

Re: Market Wizards

Post by garyfritz »

Edited by Khalaad on 10 January 2012.

Gary has very kindly allowed me to edit this post. He disagrees with William Eckhardt on the following point:
On the subject of bet size, if you plot performance against position size, you get a graph that resembles one of those rightward-facing, high fore-headed cartoon whales. The left side of the graph, corresponding to relatively small position size, is nearly linear; in this range an increase in trading size yields a proportionate increase in performance. But as you increase size beyond this range, the upward slope flattens out; this is because increasingly large drawdowns, which force you to trade smaller, inhibit your ability to come back after strings of losses. The theoretical optimum is reached right about where the whale's blowhole would be. To the right of this optimum, the graph plummets; an average position size only modestly larger than the theoretical optimum gives a negative performance. Trading size is one aspect you don't want to optimize. The optimum comes just before the precipice.
And says:
I really REALLY hate to argue with Bill Eckhardt, but I have to disagree with him on this point. Returns don't "plummet" right above optimum. They decrease just a bit quicker than they increase below optimum. This isn't opinion, it's established mathematics.
Please visit:

http://www.stevehopwoodforex.com/phpBB3 ... f=23&t=233

for Gary's discourse on the matter.

Khalid
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gaheitman
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Posts: 655
Joined: Tue Nov 15, 2011 10:55 pm
Location: Richmond, VA, US

Re: Market Wizards

Post by gaheitman »

garyfritz wrote:By the way, even my more aggressive risk levels are lower than what a lot of people trade at. They just look at the return they can get with their bigger betsizes and they're oblivious to the much higher risks they're taking. If you don't know exactly how your system performs, you are playing with fire to take on larger position sizes.

Khalid's approach is MUCH safer if you have not carefully analyzed your system's behavior. Unless you understand how to do the above analysis, and you understand the implications of that analysis, you should stick with Khalid's approach and play it safe.
Gary,

Thanks for another "meaty" post. I appreciate the math, but I have trouble believing the edge I think I have will be the same edge I actually have going forward. Perhaps I'm simply not using the right tools for my analysis. As you know, if all you have is a hammer, everything looks like a nail. :D

And just to get the other quasi-religious topics out of the way, I use stop losses and I don't do recovery trades. :lol:

George
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hiredwhip
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Joined: Tue Nov 15, 2011 7:36 pm
Location: Mountains, East Coast USA

Re: Market Wizards

Post by hiredwhip »

Hi Khalid,
Another great Sunday morning read.....Excellent work

whip
A rainy day is of enormous value to both the farm and the farmer....Stay Hungry. Stay Foolish....
shayanjameel08
Posts: 9
Joined: Sat Oct 19, 2013 10:30 am

Re: Market Wizards

Post by shayanjameel08 »

Market expert Jack D. Schwager interviews top traders in a variety of markets and determines that an interesting mix of method and mental posture is largely responsible, and presents Market Wizards in a way that allows the listener a glimpse into the minds of these most remarkable traders. Understand what it takes to succeed, and hear it in the words of the Market Wizards themselves.
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