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The Day I Lost a Shit-ton of Money, Part I

ptotrading.blogspot.com

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Re: The Day I Lost a Shit-ton of Money, Part I

#11

Post by ISL »

peterkto wrote: post #8
jbuzbee wrote: post #4

No surprise to me that these guys win some and lose some. All they are doing is trying to predict the future of a stock with absolutely no knowledge other than a graph of price movement. If it's going down, it will continue to go down. It it's going up, it will continue to go up. It's a fools game.

Hey Jbuzbee, This is what I thought as well when I was initially introduced to the idea of technical analysis and day trading. I was very skeptical. I don't want to call myself a probability expert but after studying poker theory and reading mainstream works like Fooled by Randomness, I bought into the idea that it was just a bunch of a guys throwing darts and the "winners" whom were trying to sell all their BS were…

There is virtually zero tails risk since 99% trades are intraday only.

Unless something meaningful happens to the business while you're exposed, no?

Re: The Day I Lost a Shit-ton of Money, Part I

#15

Post by peterkto »

ISL wrote: post #11
peterkto wrote: post #8

Earlier quoted context omitted.

Hey Jbuzbee, This is what I thought as well when I was initially introduced to the idea of technical analysis and day trading. I was very skeptical. I don't want to call myself a probability expert but after studying poker theory and reading mainstream works like Fooled by Randomness, I bought into the idea that it was just a bunch of a guys throwing darts and the "winners" whom were trying to sell all their BS were…

There is virtually zero tails risk since 99% trades are intraday only. Unless something meaningful happens to the business while you're exposed, no?

I suppose you're right and that's why I wrote "virtually zero" and not "no chance whatsoever".

Not only does significant breaking news have to happen while you are in the position, which is already very rare, it has to happen in a way in which you cannot respond and cut it off -- like the stock getting halted. Most intraday stock halts that occur are not exactly a shock (like a biotech or a stock under investigation of any kind) so if you are highly leveraged on that stock to the point where your entire equity can get hurt, that's on you.

If something big like GE or AAPL halts, the move proably won't be extraordinarily huge like 20%+, unless it's an Enron scenario.

Re: The Day I Lost a Shit-ton of Money, Part I

#16

Post by consz »

Reading this sort of stuff from manual prop traders makes me laugh. It sounds so amateur hour. How in the world can manual traders ever compete against a short-term stat arb or HFT strategy? It just sounds like pure luck that any of them will make money.

Also, is 130k really a huge loss? I run HFT strategies, and while it would definitely be a big loss even for one of my strategies, it wouldn't be a phenomenal outlier. How small was this guy trading before?

Re: The Day I Lost a Shit-ton of Money, Part I

#18

Post by peterkto »

joshu wrote: post #14

Technical analysis doesn't work. Big surprise you lost money. Those guys that you thought were good at it? They lost their shorts at some point too.

I'm wrong all the time and lose money all the time. The big difference here is I let one get away from me instead of keeping it small/manageable like I always do. It was a situation where I could have controlled it and I didn't. I'm still up more than 4x what the final realized loss was in my trading career.

I used to think TA was a joke. I was very skeptical before using it. I have never bothered to explain why it works intellectual to non-believers. But I do think someone who understood probability and saw the compiled statistics of practitioners would concede that there's 0 chance of non-randomness.

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