4 ms·

If you're generally interested in asset trading and came looking at this story for lessons to learn, these are the two I found in the story: * Cut your losses

by ersii 12y ago

If you're generally interested in asset trading and came looking at this story for lessons to learn, these are the two I found in the story: * Cut your losses quickly and with determination, while you should let your winners run as long as possible. * Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). Feel free to complement this, if I missed anything. In general an interesting read/story.

pumpkinattwelve 12y ago
This was pure gambling. Unless he statistically did the sums (nothing mentioned in the article), this was pure and simple gambling (probably going off candlestick trading which is big in Japan). In the finance world, this is also called dumb money. Remember kids, there are two types of traders: 1. Quants 2. Gamblers Know which one you are.
- _random_ 12y ago
  3. The ones who use inside information.
- doctorKrieger 12y ago
  but he makes money doesn't he? Anyways can you throw in some valuable quant-related resources?
- antr 12y ago
  From your generalisation we can then say that LTCM falls under "Quants", and Warren Buffet under "Gamblers".
  - seanmcdirmid 12y ago
    Warren buffet is definitely a quant (he does his homework) even if he doesn't use heavy duty math (though I'm sure he has access to that).
    - antr 12y ago
      Then you are using the wrong term. Value investors (those who use models such as DCF and DDM) are not considered 'quants' in the investment community. My point is, quants can be speculators too (and more often than not they are). I just wanted to point out (in a somewhat pedantic manner) that the above comment is just a random comment, without any substance.
- ramblerman 12y ago
  Put lipstick on a pig it's still a pig. Gamblers come in various forms, some like the thrill, some make informed wagers and some use inside information. Not sure what makes a 'Quant' so different.
nandemo 12y ago
> Buy stocks that is being bought. Sell stocks that are being sold. Except that he first made his fortune by buying stocks that were being sold (due to an error of the other side, but still being sold).
qznc 12y ago
> Cut your losses quickly and with determination, while you should let your winners run as long as possible. Yes. You can also learn this from playing Poker. Science even has a name for the inverse behavior: Disposition effect. > Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). And this is way I stopped doing this. It takes a lot of time and you feel guilty whenever you are not looking. Many people may know this effect from Facebook or Twitter. Consider it much worse, when you have a lot of money at stake.
asdfologist 12y ago
The best advice for non-professionals is to simply not trade. Taking commissions into account, your expected excess return is negative, i.e. you'll better off just going long on some index fund. All the advice being thrown around at laymen on stock trading are nothing more than empty platitudes that have not been empirically shown to consistently work. Keep in mind that when you're playing the markets, you're competing against institutional investors and hedge funds that have far superior resources (data, algorithms, etc) to better analyze the market and to even move the market in a direction favorable to their holdings (e.g. Warren Buffet). The most likely outcome of trading is that you'll get out-gamed by these sophisticated investors.
- gchokov 12y ago
  There are a lot of studies and theories which can help you to outperform professionals. There are also a lot of examples on amateurs doing much better than professionals. You can check "Random walk down Wall Street" if you are interested on this matter.
  - mistermann 12y ago
    Also if you know where to look (twitter, forums), you can find plenty of amateurs that outperform the market, and post their trades publicly.
    - mtrimpe 12y ago
      Just like you can find plenty of people who toss heads more often than tails.
      - mistermann 12y ago
        Do you care that you might be quite uninformed on this particular matter?
  - jeffreyrogers 12y ago
    Right, but those aren't for day traders. Most of those strategies depend on holding for long periods of time.
downandout 12y ago
>Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). This is one of the most overlooked things in trading when it comes to non-professionals. Not all price shifts are created equal. Watching the order flow, especially the volume of trades at each price, is far more informative than simply looking at price shifts. A few small trades at a lower price does not necessarily make a trend.
deleted 12y ago
[deleted]
leoh 12y ago
What would you say is the best source for these data?

by ersii 12y ago

pumpkinattwelve 12y ago

This was pure gambling. Unless he statistically did the sums (nothing mentioned in the article), this was pure and simple gambling (probably going off candlestick trading which is big in Japan). In the finance world, this is also called dumb money. Remember kids, there are two types of traders: 1. Quants 2. Gamblers Know which one you are.

_random_ 12y ago
3. The ones who use inside information.
doctorKrieger 12y ago
but he makes money doesn't he? Anyways can you throw in some valuable quant-related resources?
antr 12y ago
From your generalisation we can then say that LTCM falls under "Quants", and Warren Buffet under "Gamblers".
- seanmcdirmid 12y ago
  Warren buffet is definitely a quant (he does his homework) even if he doesn't use heavy duty math (though I'm sure he has access to that).
  - antr 12y ago
    Then you are using the wrong term. Value investors (those who use models such as DCF and DDM) are not considered 'quants' in the investment community. My point is, quants can be speculators too (and more often than not they are). I just wanted to point out (in a somewhat pedantic manner) that the above comment is just a random comment, without any substance.
ramblerman 12y ago
Put lipstick on a pig it's still a pig. Gamblers come in various forms, some like the thrill, some make informed wagers and some use inside information. Not sure what makes a 'Quant' so different.

nandemo 12y ago

> Buy stocks that is being bought. Sell stocks that are being sold. Except that he first made his fortune by buying stocks that were being sold (due to an error of the other side, but still being sold).

qznc 12y ago

> Cut your losses quickly and with determination, while you should let your winners run as long as possible. Yes. You can also learn this from playing Poker. Science even has a name for the inverse behavior: Disposition effect. > Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). And this is way I stopped doing this. It takes a lot of time and you feel guilty whenever you are not looking. Many people may know this effect from Facebook or Twitter. Consider it much worse, when you have a lot of money at stake.

asdfologist 12y ago

The best advice for non-professionals is to simply not trade. Taking commissions into account, your expected excess return is negative, i.e. you'll better off just going long on some index fund. All the advice being thrown around at laymen on stock trading are nothing more than empty platitudes that have not been empirically shown to consistently work. Keep in mind that when you're playing the markets, you're competing against institutional investors and hedge funds that have far superior resources (data, algorithms, etc) to better analyze the market and to even move the market in a direction favorable to their holdings (e.g. Warren Buffet). The most likely outcome of trading is that you'll get out-gamed by these sophisticated investors.

gchokov 12y ago
There are a lot of studies and theories which can help you to outperform professionals. There are also a lot of examples on amateurs doing much better than professionals. You can check "Random walk down Wall Street" if you are interested on this matter.
- mistermann 12y ago
  Also if you know where to look (twitter, forums), you can find plenty of amateurs that outperform the market, and post their trades publicly.
  - mtrimpe 12y ago
    Just like you can find plenty of people who toss heads more often than tails.
    - mistermann 12y ago
      Do you care that you might be quite uninformed on this particular matter?
- jeffreyrogers 12y ago
  Right, but those aren't for day traders. Most of those strategies depend on holding for long periods of time.

downandout 12y ago

>Buy stocks that is being bought. Sell stocks that are being sold. (In other words, keep track of the stock order flow. Bid/asks). This is one of the most overlooked things in trading when it comes to non-professionals. Not all price shifts are created equal. Watching the order flow, especially the volume of trades at each price, is far more informative than simply looking at price shifts. A few small trades at a lower price does not necessarily make a trend.

deleted 12y ago

[deleted]

leoh 12y ago

What would you say is the best source for these data?