How many blow-ups are necessary in order to become a pro? | Forex Factory

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How many blow-ups are necessary in order to become a pro?

  • #1
  • First Post: Oct 7, 2007 11:57pm Oct 7, 2007 11:57pm
A tragedy!
One of the minds who have deeply influenced the way I trade markets blew up again.

http://www.newyorker.com/reporting/2...a_fact_cassidy

http://www.nypost.com/seven/10072007...ain.htm?page=1

Since last month in another forum, I have been reading a thread recounting the way in which Niederhoffer was wiped out again...it was a rumor, which Neiderhoffer denied when he personally contacted the administrator of that site. WSJ is said to be working on the story in great details; they've been working on it since august.
Just goes to show you how the market humbles everyone sooner or later.

BTW, Neiderhoffer never believed in setting stop loss levels.
  • #2
  • Oct 8, 2007 12:13am Oct 8, 2007 12:13am
The worst thing is, he was forced to liquidate in the weeks leading up to the Fed rate cut. According to the article, had he held, he would have "recouped most of the losses". Talk about terrible luck/timing..
  • #3
  • Oct 8, 2007 12:22am Oct 8, 2007 12:22am
Quoting Trader KGB
The worst thing is, he was forced to liquidate in the weeks leading up to the Fed rate cut. According to the article, had he held, he would have "recouped most of the losses". Talk about terrible luck/timing..
Yes. And the same thing can be said of his blow-up in '97. Had his broker at the time, Refco, allowed him to hold on to his positions for 2 to 3 more hours, his holdings would have become madly profitable. His problem then, just like this last time around, was that he had over-leveraged himself.

Even an investment prodigy needs to refer to Dialist' posts from time to time.

It truly is unfortunate.
  • #4
  • Oct 9, 2007 1:34pm Oct 9, 2007 1:34pm
And if my sister had balls, she would be my brother.
  • #5
  • Oct 9, 2007 3:48pm Oct 9, 2007 3:48pm
Quoting Dopey
And if my sister had balls, she would be my brother.
Good point.
and if you had ..., you'd be her sister.
  • #6
  • Oct 9, 2007 4:06pm Oct 9, 2007 4:06pm
ouch. i never like to see a trader go down like that
Relax and be happy.
  • #7
  • Oct 9, 2007 8:37pm Oct 9, 2007 8:37pm
Taleb has interesting comments re. Neiderhoffer in his book Fooled by Randomness - i.e about playing trading as one would a competitive sport (rather than a survival means), and putting too much faith in stats. Or like he said in one of the articles posted, Neiderhoffer is his own worst enemy..It's too bad, because he can be brilliant.
  • #8
  • Oct 9, 2007 9:12pm Oct 9, 2007 9:12pm
Isn't it amazing that such a bright and acute-minded individual can actually become victim of the same rookie mistakes over and over again?

Many people like to focus on the fact that Victor's refusal of stop-losses and overleverage are the main causes of his failures. I am not going to argue that.

However, let's look at the other side of the coin. What makes you go in over your head? Why would someone so skillful need to be overleveraged?

I can only come up with one answer: GREED.

Had Victor applied the same strategies and techniques without the use of such high leverage, he would have endured the Asian crisis and the subprime crisis.

As the articles clearly pointed out, he was forced out of business by his creditors. He did not have enough liquidity to live for another day, week, or month.

I hope Victor doesn't fall into depression again but I can hardly believe that a 60+ yr man can change his behavior and wise up to make his trading more stable and less vulnerable to extraordinary market events.

The 12-page article was a great read. Thanks for posting.
  • #9
  • Oct 9, 2007 9:17pm Oct 9, 2007 9:17pm
Quoting HalifaxCB
Taleb has interesting comments re. Neiderhoffer in his book Fooled by Randomness - i.e about playing trading as one would a competitive sport (rather than a survival means), and putting too much faith in stats. Or like he said in one of the articles posted, Neiderhoffer is his own worst enemy..It's too bad, because he can be brilliant.
Taleb is a crazy pessimist; the one crazy pessimist for whom I have immeasurable respect. And as Niederhoffer said, Taleb is the empiricist who doesn't believe in empiricism...Perhaps war deeply influenced his thinking, but it seems unreasonable to have one's entire investing strategy revolve around doomsday being just around the corner. That being said, I read everything Taleb writes with extreme skepticism. If I didn't believe that I could more often than not make successful speculative bets in this business, I would not be around this forum now.
Halifax, it is great that you mentioned Taleb. I urge all who haven't read his work to visit his webpage at: fooledbyrandomness.com His theses are definitely worth a study.
  • #10
  • Oct 9, 2007 9:27pm Oct 9, 2007 9:27pm
Quoting ItalianSharp

I can only come up with one answer: GREED.

The 12-page article was a great read. Thanks for posting.
I think in his case, it has more to do with his overconfidence and the euphoric state that comes with feeling accomplished, superior, and untouchable... I know a few persons like that (although not as extreme); it's a dangerous state of mind.

BTW, You are welcome sir.
  • #11
  • Oct 9, 2007 9:38pm Oct 9, 2007 9:38pm
Expect the unexpected, it's one of the philosophies of Taleb.
I like how the man deals with trading and uncertainty.
some traders think that they are great after a winning streak while in fact they are not.
Ifs , shoulda's ,woulda's and coulda's never help in the markets.
these symptoms makes a bad event to be worse and ,worst of it all ,they ingrain bad habits in ur mind.

here I attach the article "How Nassim Taleb turned the inevitability of disaster into an investment strategy".

Regards
Attached File(s)
File Type: pdf Gladwell, Malcolm - Blowing Up (About Taleb).pdf   177 KB | 671 downloads
Enter Signature
  • #12
  • Oct 9, 2007 9:39pm Oct 9, 2007 9:39pm
Err.. All of the above taken into consideration...
My answer would be...

Why hold a mentality that suggests,

"This is my First Live Account and I wonder how long it will take me to lose it?"

Most, perhaps not all, of the old {1kt} farts around here started Trading before such a thing as a "Demo Account" was available AND It Cost Us Real Money To Test Our Theories. In other words, we were forced to hone our skills with Far Less Info before we decided we could participate in The Game. What more does the NEW Generation Want?

Who to trust.

Answer = Info & Platform & Borker.

Until then, PLAY.
  • #13
  • Oct 9, 2007 9:47pm Oct 9, 2007 9:47pm
In fact...
I spent ~ 18 months directing 3 understudies trying to assimilate the changes that the influx of transient Traders {new e-Traders} would have on our {at that time, anolog} system
  • #14
  • Oct 10, 2007 4:02am Oct 10, 2007 4:02am
sad
but if one doesn't believe in Stop Losses as you say... at least should have to believe in Money Management and not overleverage.

All the big traders have big losses once or twice, the ones that have more risk have more reward. I'm sure he has to have one or half million reserved to start over again... and recover 300 millions again soon.
  • #15
  • Oct 10, 2007 9:09am Oct 10, 2007 9:09am
Bad MM. That's all. One could not be the best money manager being overrisked, overleveraged and not using stop losses. If you do not use SL (mental or physical) how do you know what is the worst case scenario. The worst case scenario is the complete bailout as the case shows. EGO and that he is above all markets and cannot be wrong. What do you expect??? FRENCH
.
  • #16
  • Oct 10, 2007 9:35am Oct 10, 2007 9:35am
too many of these "Mr. know it all Gurus"
and that, my friend, is why i dont "worship" these "gurus".

Eventually every trader should become their your own guru...
If you are learning from your mistakes you are already on your way. (apparently another guru didn't)
100% of traders are losers. Just that some win more than they lose!
  • #17
  • Oct 10, 2007 10:00am Oct 10, 2007 10:00am
Quoting Mr demark
too many of these "Mr. know it all Gurus"
and that, my friend, is why i dont "worship" these "gurus".

Eventually every trader should become their your own guru...
If you are learning from your mistakes you are already on your way. (apparently another guru didn't)
I agree. I have just expressed my opinion. I am not a guru, far from being it. Always here to learn and to hear and see new things. I am constantly documenting, calculating, thinking, progressing and so on.. Never going to be perfect but too big exposure without a worst case scenario plan is insane IMHO.
.
  • #18
  • Oct 10, 2007 11:32am Oct 10, 2007 11:32am
After I read Victor's book I hung a picture of the Titanic on my office wall to remind me that "Just when things are going good..."
In trading, there is no bullshit. You either make money or you don't.
  • #19
  • Oct 10, 2007 11:38am Oct 10, 2007 11:38am
Quoting mrgreen
After I read Victor's book I hung a picture of the Titanic on my office wall to remind me that "Just when things are going good..."
I will hang a rope onto my wall just to use it if I was such a stupid dumbass to blow my account..
.
  • #20
  • Oct 10, 2007 12:13pm Oct 10, 2007 12:13pm
"blow ups" "trader going down"


Okay, okay time to act like a grown up


I wonder how much this guy gave to charity. I dont know him or his finances but it sound like he gave nothing at all or just enough for tax reasons at which the only logical reason he lost all his money is the universe wanted in back to help balance things out. Just another sucker.

You have to give in order to recieve, If all you do is recieve some one or something is going to come and rob your ass blind. And that is excatly what happened in this case. But then again I dont know cause I dont know the whole story
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