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Nothing can argue with putting money in the bank? True or False

  • Post #1
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  • First Post: Mar 7, 2009 6:16pm Mar 7, 2009 6:16pm
  •  fugly
  • | Joined Aug 2007 | Status: Member | 889 Posts
As long as you put money in the bank trading does it matter if you;re following correct trading practice or not?

I'm asking because almost everyone I know loses the few I know who do make money don't make more than 80-100% pa which is not bad BUT its very very difficult. Moreover they arent even sure they will be profitable the next year.

On the other hand I've come across two people (they arnt on this forum) one started out with a $100 turned it into a little under $500k in a little more than 4 months the other started with a few thousand and turned it into well over a million $ in a little over one year.

After a lot of probing I've found both of these two people arent anywhere as knowledgeable as the few I know who make 80-100% they arent even as knowledgeable as most of the traders I know who lose!!

But if the end point is to put money in the bank trading they've beaten all the know it alls by leaps and bounds.

I was quite surprised as to how the pull it off, when they dont know what MACD is or what the wolfwave is. I finally found both of them (and they dont know each other) employ some form of selective averaging down or martingale position sizing. Btw if you mention position sizing to them they wont even know what that means lol !

If this has made them money would it be wise sticking to this practice even though we know its incorrect trading practice?

After all isnt the bottom line putting money in the bank whether u do it by ESP or tarot or elliot wave or fourier analysis or whatever even if u do it by averaging down and ppl who havent made anywhere as much money as u frown on you.

Whats the answer here should it be done if it works for you.

I read Livermore in his book he wrote "never average down let that thought indelibly be written in your mind" and Ed Seykota says the same thing.

On the other hand Peter Bain in his seminar says there are no rules in this game and nothing can argue with putting money in the bank.

As I said these guys selectively average down and they have made money lots and lots of it even though they maybe going against conventional trading rules.

There are other guys like FXtian and Mr Zaminab (dunno if they make money or not but they claim to)

Does it matter? if u put money in the bank trading does it matter how u do it?
  • Post #2
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  • Mar 7, 2009 6:20pm Mar 7, 2009 6:20pm
  •  tdion
  • Joined Nov 2005 | Status: EURUSD Quant FREAK | 3,197 Posts
Fugly, you think it was dumb luck? In other words, would you bet they could do it again?

I mean, there might be 500 people you know trading, and 1 or 2 are bound to get lucky.
 
 
  • Post #3
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  • Mar 10, 2009 8:45pm Mar 10, 2009 8:45pm
  •  hanover
  • Joined Sep 2006 | Status: ... | 8,092 Posts
Fugly, I agree totally. Ultimately, bottom line is all that counts.

But I also agree with TD. If either of these guys were account managers, I'd want to see several years worth of consistent results, and evidence of adequate risk management, before I let them trade my money. In other words, some promise of sustainability.
 
 
  • Post #4
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  • Mar 11, 2009 9:21am Mar 11, 2009 9:21am
  •  fugly
  • | Joined Aug 2007 | Status: Member | 889 Posts
Thanks Tom, thanks David I appreciate your views on this.

Well its true I do know a lot of traders but all of them follow correct trading principles. None of them average down atleast as far as I know. I've never averaged down myself. Nevertheless I'm sure luck has played a part in the success of these two chaps. Luck plays a part even in the success of the handful I know who traded successfully following correct trading principles. Without a certain amount of luck we'd be nowhere in this business.

Agree with David on the fund manager point. I personally wouldnt give them money to trade if i know they average down. I know for a fact they trade their own accounts. From the gains they've made they seem content with that.
 
 
  • Post #5
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  • Last Post: Mar 11, 2009 9:49am Mar 11, 2009 9:49am
  •  DanUK
  • Joined Nov 2008 | Status: You must obey the dance commander | 2,038 Posts
Hi fugly,

I think the long term results are what counts. Which I think is what has been said already.

However, why not open a seperate trading account (for riskier trading) with an amount you are 100% comfortable with loosing and see what happens? I've actually been thinking about doing this myself - just for fun really!

Regards,

Dan
 
 
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