jackb

Apology accepted and I'll extend one to you as well. You may have perceived my initial comments as being an attack on your personal integrity. What I was really wanting/meaning to do is highlight the common problem we all struggle with at times: confirmation bias. That's where I intended my intensity to be directed and I apologize for failing to make that evident. As you saw, I too, have long been fascinated with how accurate the claim may be. After my original post on the topic, and due in great part to my apparent OCD, I literally invested dozens of hours researching this topic. That has led me to a conclusion. But that's all it is and it certainly could be inaccurate. So we now have 2 things in common--the topic itself and being willing to extend an apology. That's pretty cool!!

Sorry, you're the one who hasn't presented any capacity to clearly define your point. And it's been clear from the beginning that you don't seem have one. So instead of having the capacity to have a decent round of communication, it is you who chose to cast aspersions. Utterly childish and pathetic. If you don't like what I have to say, use the Ignore feature.

The point is, there actually is an answer to the question. But leaning on anecdotes and self-reporting isn't a good way to orient one's self. People lie all the time. Sometime they do it deliberately...sometimes unintentionally. When you hear people telling you that they make money trading, the likelihood is that they are communicating that they have made money on a recent trade. With just a few follow-up questions, it becomes clear that they are just cherry picking their own trading history (which is often very limited) in an effort to impress. There isn't a disconnect at hand (as you seem to want to believe) as much as there is human nature taking place. People will willingly talk about winning trades but not their losers. As such, the reporting is horribly skewed toward one side.

Short bonds at the top? No.The bond market has exploded to the upside since July 25th. This trader is getting killed!

Anyone believe S&P released the news of the downgrade without first discussing it with Washington? That's no big deal...you'd expect as much. But what if an official decided to front run the news. That would be a little sketchy, right? Maybe, but it's not illegal. http://www.cnbc.com/id/43471561/Congressional_Trading_on_Advance_Info_Not_Illegal_SEC Mmmm...that's good trading. It's nice to know our respective representatives get at least one perk.

Take a look at historical PE ratios. All that the 2008 drop could muster was to get us back to historical mean territory of around 15-16. A real selloff should have overshot the mean as the taste for equities became too much to stomach. Of course, such an outcome was subverted (perverted) through political machinations. And that supported another quick (psychotic) move back above 20 as if all systemic risk had been resolved. Moving down to a single digit PE will bring about the kind of disgust for equities as seen in the 1930s. And that's a long ways down from here.

And yet you assume to know the truth about some god having the absolute truth. That makes no sense at all. Per your logic, you are acting "godlike".

I don't think the data set of Steve's students adds anything in reality. Not from the standpoint of size, nor duration. But maybe it does work for someone who is just looking to confirm a preconceived bias. Don't let that kind of conduct flow over to your trading...it's a recipe for disaster. At the beginning of the year, I started a thread on this exact topic. After reviewing the links contained in that thread as well as reviewing articles from multiple other sources, I became satisfied with an answer. Suffice it to say, you are definitely in need of performing further research in order to get at the truth.

Rather than evaluating the percentage that fail, the more important statistic is the percentage that are successful. In between the failures and those that are successful lies a sizable percentage that might only breakeven or realize small gains but not enough to cover their cost of labor (let alone a return on investment). Those that both make a living trading and also produce a reasonable ROI (i.e., successful), are certainly less than 5%. You mentioned you have only been trading 4 years. Unfortunately, randomness is a lot more clumpy than most people realize. As such, there is a high degree of probability that you have just encountered a batch of good fortune (don't take it personally, this is just how the math works). In order to determine if you are trading with an edge (as opposed to good fortune), you'll need, at minimum, another 16-18 years to find the answer. It's a long hard road fraught with many opportunities to blow up along the way...like Hoffman recently did. But you might be one of the few, the proud...

Given today's price action, I'm expecting to hear about another Hoffman blow-up. Can anybody provide details on Hoffman's trades today?

Sounds like you're just trying to make excuses for being one of those sheeple.

It's absolutely possible and I do it all the time with multiple (3) different brokers. If all you had was $1000 in your account and you place an ES order for 2 contracts, you will be filled on both (again, if you broker offers $500 intraday margins). The exchange recommended margins are not adhered to by these brokers. On a side note, if you (any trader) do not have more than one broker, it is advisable to incorporate that into your business plan to mitigate issues related to broker-specific system problems.

535 straight days without a losing trade Do not be impressed with this carved out statistic. It's meaningless on its own. If someone wants to trade e-micros with a substantial account, they could easily eclipse 535 straight days. In doing so they would not have proven anything about their trading skills nor would they have generated enough returns to warrant deploying the strategy. But, apparently, it would be enough to have the sheeples clamoring to a trading room to pay for the privilege of seeing behind the scenes of "success". Then when they find out it's nothing but smoke and mirrors, sheeples will still argue otherwise. :crap:

I guess D-Day was 7/14. The downtrend in the Russell that day was brutal.

Is there something wrong with "gunning down a stock"? Was there something wrong with gunning down Enron? Or any other company that wreaks of incompetence? Why should it be that one's work in determining that a stock is overvalued should be relegated to "then just don't buy it"?

I don't find your comments to be helpful at all to those who might be seeking some true insight. To opine that his "'high probability' setups...work over 90% of the time" completely misses the most important point. In fact, if you compile his trading stats, it will likely show that his win rate was ABOVE 99%. Does that mean he's a successful trader? A lot of people would likely answer "Hell, yeah". Of course, that would be just an emotional reply as you haven't yet been provided enough information to render an informed response. Once you find out that the average loser $ size of the LESS THAN 1% of trades is so large that it wipes out most (if not all) the profits produced by the winning trades, now you're ready to put the entirety of the system into context. Martingales blow up when they blow up...but they blow up. There's no brownie points for supposedly riding it longer than other martingalers could have done. They all end up in the same place...producing a profit factor below 1...that is, long-term, it's a losing system. This is the system that Hoffman has been relying on. It's improper and ill-informed to just isolate the good times of a invalid/poor system and claim those good times were more representative of his true skill set. His abilities should be evaluated on the whole. Until he fully does away with such a screwed up money management approach, I would argue it's impossible to know if he really does have any edge-worthy skills. But we do know he has a major shortcoming...his aversion to being stopped out. His attempt to get around this hang up (his "scaling calculator" aka martingale) was nothing but a ticking time bomb. When a trader shows that much antipathy toward such a monumentally important aspect of trading, it wasn't hard to figure out that ugly times would be forthcoming. And this guy had/has the full support and confidence of Carter. Major black-eye for Carter, imo. This from a guy who had written about such absurdities...and yet he is now part of one. Does anyone know if Carter makes money trading? No, I wouldn't be surprised if he doesn't.

It's a sad day for System win rates...in Hoffman("I don't like taking a loss")'s case, they threw out their No. 1 Ace, Mr. 99%, and he couldn't even get it done. That Average Net $ Loser in a martingale is ball ("system") buster. Can't wait to hear the rationalizations? Wouldn't it be remarkable if Rob really didn't know what he was doing, that he'd never heard of a martingale betting strategy, that he thought it was his own creation and that after being told that it's not only an old but also a thoroughly debunked "system"...that he might retort..."Oh...well....I didn't know that...I just screwed up big time then. I guess I better not do that again." He might gain some respect for such a comment. Ah, never mind...the rationalizations are...

Well, there was some history made during this up move: From Bespoke: Last week's strength of group breadth was also notable given the fact that all 24 groups finished the day in positive territory on four different days. Looking back at data over the last ten years, we found that there has never been a period where all 24 groups were up on the day in four out of five trading days. In fact, prior to last week, there was never a period where all 24 groups were up on the day in even three out of five trading days.

You've only been trading with real money since April and you don't have enough equity to be a sponsor. That makes you a nobody. If you can't understand that simple bit of logic, then you have way more problems to deal with than figuring out how to become a successful trader. And your obstinate tendencies are a trait the market loves to feed on. You undoubtedly don't understand that now, but you will...and I suspect in a big way.

"Does it make you wonder why I get attacked? It is because I'm coming in and tearing down their false hopes and dreams." - Light65536 No, it's because you were duplicitous with your initial post. If what you really cared about was Levin's purported track record, you should have left off the completely unrelated self-serving comment about being a "very" successful trader. You then make a complete fool of yourself by stating you have only been trading with real money since April. Earning the moniker of "successful trader" requires decades of trading...entirely with real money. You have brought this all upon yourself...and deservedly so. And you're not even mature enough to show some humility.

Yep, I'm in full agreement. Good stuff.

One of the most remarkable aspects about traders who pound the table about back-testing (particularly system traders), is that few do the requisite dirty work to compile a decent data set to test off of. I can't tell you how many times I have spoken to vendors at trade shows about the processes they used to arrive at the set of data upon which they have now generated output metrics of their system. Most have no idea what I'm talking about. Occasionally, I'll get someone who tells me they use 2 sources from different data providers to cross-reference output metrics. Sadly, most are quick to rationalize why they have no intention of undertaking any effort to address the shortcoming. It's hard to say if it's laziness or stubbornness. Friday on the SPX is a perfect example of why any serious back-tester needs to take the time and come up with a scrubbed data set. My broker's opening price on this index is way off and I'm finding the same error with most other data providers (probably because the problem lies with the exchange). If you're not maintaining a contemporaneous scrubbed data set, then the only way to somewhat get around that is to have multiple data sets (a minimum of 3, imo). Even then, they may all be reporting the same invalid number. How big of difference can it make? Well, a couple of days being off a couple of points could be enough to materially skew results. In the case of last Friday, it's not off a couple of points...rather it's about 10 points. And this happens more than just a few times during any given year. So hopefully the next time someone comes running up to you with a printout of favorable metrics for a system, you'll now know the first question to ask. For those of you running free and loose with only one data set (likely the one from your broker), you should be seriously skeptical about any of the back-testing results. In summary, forward-testing rules.

Great list! I'm on board with all of them except maybe the last one...but that just may because I'd need to hear some further specifics/clarification.

Norm, let's have a chat about Quantum Mechanics and Masaru Emoto.

Yes, the video is feature presentation. It's time well spent for serious traders. And it's rather encouraging being able to see that one need not be perfect (which the video makes perfectly clear) to be a success. You'll note several instances in which PTJ violates commonly held wisdom. As for the diplomacy with my first post, it shouldn't be confused for anything more. I agree with and share your point of perspective. The other debatable issue I forget to mention in my first post, was that of Harry being "greedy". I don't think you can achieve success as a trader if you completely shun being greedy. The real difficulty lies in knowing when to invoke that mentality. Of course, its never done recklessly and only on very select occasions.