karoshiman

Good You mean, like ranking the companies by discrepancy between your calculated value and the current stock price (like Warren Buffett says, he tries to buy companies that are worth 1$ for 50 cent) as you assume, the bigger the discrepancy, the higher the probability for the market price to move to your calculated value? If you are very confident in your analysis and have very deep pockets and lots of time one can do that. So true... Yes, for instance, the stock price of the company I've worked for was very volatile. It fluctuated in a one year period between about 20 and 55 Euro, without any changes in fundamentals or projections by us or by analysts. It had more to do with general market sentiment and associated risk appetite of investors/traders. When I saw this, I just thought to myself "this is all so crazy... the stock market has nothing to do with what happens in the real world... it's all investor psychology"... okay, that was also a very volatile period in the markets, but still... The problem was that I've bought put warrants (similar to options), as at that time in Germany, shorting of stocks was not possible for retail traders (now is). The time value of the warrants were the problem... otherwise I would have made a killing... woulda coulda shoulda... :doh:

Hi Siuya, I don't see me arguing against my own point... Maybe I don't understand your point fully but your examples do not oppose what I have written earlier from my point of view. As a value investor, I've shorted the internet bubble. Unlucky for me, the bubble lasted longer than I thought. Problem was that I did not take into account what the market's view was. Markets have their own view on value. The moment you say "they don't recognize value" or "overshoot", you are imposing your view on the markets. And that's fatal from my point of view, if you plan to make money in the markets with an envisaged holding period of 2 years or less. I mean, you can make money if you assess value correctly (and you can make a lots of it), but you have to be able to wait for years until markets change their perception of value... like Keynes said: "Markets can remain irrational longer than you can remain solvent." And the other company examples fit to what I have written regarding future expectations. Whether it's expectations on the industry or management or other road blocks, it does not matter. Regards, k

I assume, by "value created by the companies" you mean profits or cash flow. If so, I disagree... the value of an asset and hence the return to investors is derived from what others are willing or not willing to pay for it. Even, if one takes a long-term view (3 years and more) a company that has increasing cash flows has still to do a great job in investor relations in order to explain their story and convince the markets about its value and by thus driving their stock price up. And that's the key, you have to convince people... cash flow alone will not help. And by the way, the markets reflect the future expectations. That's why it is more important what others think about the future of a company than what the company actually produces in cash flow. The latter is only relevant for the valuation when there are major deviations from expectations, hence, changing the view of people on the future of that company. But, my point is, it's the aggregate view of people about an asset that is the driving force. I've started this game as a fundamental trader. Was right about the internet bubble and lost a lot of money as my timing was crap (I think I was the only one at that time who lost money... lol). I've worked for years in M&A and evaluated private companies in these transactions. Although, you have a fundamental basis for your negotiations at the end of the day it's the buyer and seller agreeing or not agreeing on the price. Often you get to see in these private transactions "irrational" prices. Later, when I've switched to a corporate career I've worked intensely with the board of directors and evaluated also our own company. I saw, that the valuations by the stock market just did not make sense most of the time (not talking cents here, but major deviations). These experiences led me finally to technical analysis... and it works as I am not trying to impose some views on the markets but try to understand the markets intentions. It's irrelevant whether I think the markets are over- or undervalued. Now, if you've meant with "value created by the companies" good investor relations work, then I agree with your statement.

Because of what I've stated in the first sentence. The cases I know of trade quite often per day and at various times of the day. Given the available leverage they have already reached their limits in terms of trade size. They cannot scale their methodology any further.

... strategies which generate such high returns will not be possible after a certain trading volume is reached. There are traders out there who generate 20-25% consistently per month with low to mid-sized six figure USD accounts but cash out their profits at the end of each month.

Agree with Siuya 100% on the above.

That's my view, too. I think also that most coaches and educators are providing BS in this industry. If I see a statement by them on a topic where I have another opinion I will respond as I think that newbies should see the different view on the topic. But I see no point in arguing endlessly with them about any claims they make or even insulting them. After I've read the first one or two posts by Roger I've decided to ignore his posts and the posts by the users who reply to his posts (not by using the ignore button, but by just not reading them). It's just a waste of my life time. I do not understand the energy with which some users try to fight against him. Maybe there is a history on this... I don't know. But let him post whatever he wants to post on his method, unless he spams other threads than his too often. If he does the latter any user can remind him to stay on topic without repeatedly advertising his method.

That's the thing with moderation or censoring... it's in large part subjective... another argument against it. Let it be a free market...

To my knowledge the biggest percentage return published so far is Larry Williams' > 11,000% return in a one year period, turning $10k into $1.1m in that futures competition. Although this is all very interesting, it's of no value to any other individual trader, nor what any hedge fund make per year. The only thing that is relevant is how much YOU and YOUR METHOD are able to make per year. It's like asking what the performance metrics of Tiger Woods are in Golf... how will this help you if you start golfing? Even if you have much more talent than Tiger Woods and are prepared to train smarter and harder than he did in all aspects of the game (incl. mental), then such comparison would only limit you to be as good as he was and not better...

Hi MMS, does 2. mean that you delete off-topic posts, if only one member complains about it? Regards, k

For me, it's fine if threads get off-topic for a while. Just like in a normal conversation. If someone does not like the off-topic posts he or she can ignore them and does not have to respond. This person can just continue to post about the original topic and people will reply to that and get on-topic again. If the topic is of enough interest to others of course... And this is the other side of the medal... maybe some topics are not really that interesting at that moment for most people on the forum so that they tend to deviate from it. I'd say, keep it like it is. We are all big boys or girls and should be able to cope with it.

Hm... good example... made me think... If I buy or sell an index or a stock I am assessing/forecasting the value of it. Yes, I inherently I compare it with my cash. But my analysis is based on the past behavior of the price of the asset and not the relation of the price of the asset to my cash position. I'm just saying that it's possible that prices of assets behave differently than their relationship to prices of other assets. My mathematical example fuels my doubts (that it's more unlikely that fx pair relations approach zero). Plus, I've once heard from a forex trader that he liked to apply his technical analysis to the dollar index, as it provides a "clearer picture" as compared to an analysis of an fx pair relation alone. This is also a hint that relations might behave differently than prices. But the differences might be minor only. Anyway, I just wanted to provide a different point of view to the discussion And... if a trader trades fx successfully... don't fix something that isn't broke...

Sounds like you have bought the stock already. Have you ever heard that averaging is usually not a good proposition in trading? This is no exception. Sell all of your holdings in FB and wait for a bottom forming... Not only that you increase your losses if you keep holding the stock, but you have also opportunity costs. Instead of holding the stock and analyzing it and/or hoping for it to return you could make money elsewhere in the meantime. FB is not the only tradable instrument out there... Accept and take the losses and move on.

Yeah! And... 2nd RULE: You DO NOT talk about FX CLUB. 3rd RULE: If your method says "stop", the trade is over (= stop loss). 4th RULE: Only two guys to a trade (= Buyer and Seller, i.e. no educators, coaches, etc.). 5th RULE: One trade at a time (= focus on one instrument, strategy, etc.). 6th RULE: No shirts, no shoes (...er?). 7th RULE: Trades will go on as long as they have to (= until profit target or stop loss hit, no premature exits due to namby-pamby emotional behavior). 8th RULE: If this is your first session at FX CLUB, you HAVE to trade (= real money, no sim account trading).

Yes, although brokers hedge their position mostly, hence, being only the middlemen. The above means also that no fully reliable volume info is available. Hence, a valuable source of trading info is missing as compared to other instruments (I know, some methodologies do not require volume information). What I would add as a negative also, is the fact that fx is more a "conceptual idea" of prices. You just trade a relation between two currencies. This is different to stocks or index futures (even a currency index, like the dollar index), for instance, as these reflect a value of one asset (or in case of an index a defined basket of assets) and not a relation between two assets. I have to admit that I haven't done any analysis on this but it could be possible that technical patterns are not as clear with relations between two assets as with the price of one asset, as relations behave differently (e.g. it seems very unlikely that a relation between two currencies approaches zero... however, it's not as unlikely with stock values). However, I had my difficulties with fx and stopped my endeavors in that area. Instead, I've focused on index futures as the concept appealed to me much more, due to the above. But this might also be just a personal preference. I've read also about one guy, who was supposed to be successful in fx trading, and he stated that he actually preferred this conceptual idea of fx.

Nah... only interested in the middle B... but this is all anyway no top rating... I'd go with AA+... Awesome Amazons Plus... that's a pretty good rating... I leave it to your imagination, what the "plus" stands for...

What is the BBB? Do I have to know it?

To compare apples with apples, it would make the most sense if it would be a "forward performance" competition (don't have a better word for it), i.e. the autotrader can tweak the system with any period he or she likes but then the system and you would have to trade the same period live (e.g. starting January 1st 2013)... with whatever the market conditions are during the agreed period. Without knowing anything about your discretionary methodology or your consistency it might be possible that you cannot repeat the performance you mentioned, just as the autotrader system might not be able to repeat its performance from the optimization and testing period. However, I believe also that no mechanical system can beat a good + consistent discretionary trader. Markets/humans are just not mechanical...

Might be the reason that OP hasn't replied to any of the comments...

"not a bogan"... lol ... had to look up the word What does "craked a nicky nake" mean? And what is a "nark"?? Couldn't find both in the dictionary... I am not a native english speaker... yes, I am not from the US, nor UK or AU... This thread is going off-topic, by the way...

Thanks gosu! Very much appreciated!

I don't try to compete with the larger participants either. In fact, I try to identify where they move the market and try to get on board... just like a flea on an elephant ... but I do try also to get on the temporary counter moves which happen intraday. These can also be good for a few to several points. Thanks for the hint to the congressional testimony and reports on the May 2010 flash crash. Will check it out.

I was thinking the same, when I saw gosu's comment And you are an Aussie? Maybe that's why you seem to be a relaxed fella...? What other buttons do you hit?

Absolutely! However, I don't know who claimed that...

Fair enough. But you can still make money as an individual if you understand such behavior of funds. All I'm saying is that an individual trader can make money by gathering a few ticks here and there, whereas most funds need big(ger) moves to make money. This is an advantage we have over them. It's only one aspect, of course, but this is IMO always missing in performance comparisons of individual traders vs. funds. The examples of some of the Market Wizards showed that their performance got worse the more money they managed. Now, you can attribute that to other aspects as well (or just good and bad luck). However, they themselves attributed it to the increased size they had to manage.