Some of you out there are not very good with numbers. So you seem to be focusing on the wrong things. If I make one bet of one hundred thousand dollars or 100 bets of one thousand dollars, if I am stopped out at 2% of the amount I bet (you can call it an investment or call it a trade) then assuming that I acutally will be stopped at that level (sufficent liquididty and reasonable spreads allowing this) then I have risked 2% of my total funds.

Next if in my trades my average loss is x and my average gain is 3x I can be wrong 3 out of four times and still break even. If I make more than 3x then things are even better. With a system like I just mentioned if I am right in my trades half the time I am making money.

I do not know Tim’s ahem, batting average but I suspect over a given time period, he is doing better than 50/50.

Risk of ruin. How many times in a row or if you prefer a clump of trades is Tim likley to be incorrect? Or the converse how many times right? So if a bad string of luck occours how likely is it that he is wiped out? These things happen and one should make the bets of a size that you survive such an event. If a string of good luck occours , the size of a bet can be adjusted to increase or decrease risk because you now have more funds. If you bet the same size per trade with the same size stop your risk goes down.

What about trends?

Hypotheticly (for this example I am not using a day trade) Lets say I am blessed and I buy a stock at the begining of a long run such as we saw with Microsoft when it’s price exploded as it grew. Lets say I have made a usual bet of x size then it goes up 4%, if I double my bet but keep the percentage stop at 2% (of the price I paid of the second bet) in my belief that I have caught a trend, then the potential gain to my portfolio is doubled for each move up (from my orig. position) but my risk of a lose has been reduced. Take a look at the books on the Turtle Traders. Their rules had them pile on when right which can result in large gains. This is about math and not about Tim! If Tim is not adjusting where he gets out when having gains then there is a potential problem in his keeping gains.

Tim is (sort of ) trying to replicate his earlier trading results to prove the point that his apporach works (and therefore you should send $ to him for goods and or services). This is putting yourself on the line. I am interested in how any other accounts he has are doing, but in the long run that may not be my business.

As far as number of trades that is irrelevant. Results matter. If I make one trade in 10 years in a stock or one thousand trades a week if at the end of the 10 years I have after all costs have been subtracted have the same increase in my money the result is the same. Of course there are going to be ups and downs along the way. In fact the rapid trading approach might have less drawdowns. Since it is being activly managed.

There is a hedge fund headed by the mathmatician Thorpe (he invented card counting). It is a black box system where a computer makes about 3k trades a day. They make about 30% a year. It is done by having an edge in terms of the odds. On a sufficent number of trades they make money. it is like the casino in Las Vegas. The operators know that sometimes they will have a string of good or bad luck, but over time with enough bets placed, they will make a percentage of the total as profit.

So the real question is “Is Tim making his $ by luck or because his approach causes him to have an edge?

PErhaps we should look at his large bets and determine how often he looses $ on those and how much as a % of his portfolio he gains, in order to determine if he is a a chump depending on luck on those outsized trades or if he is taking a viable approach.

My wife once worked at a company where the delivery person was a retired perosn who wnet to the tracks and actually did well. He tended to bet on jocky /horse combinations. People made fun of him. But his little side hobby paid for his Buick and his RV. I saw him once in action at a company party party at the tracks, sure enough overall he made money. Why? He had an edge and knew how to bet with it.

Some of you out there are not very good with numbers. So you seem to be focusing on the wrong things. If I make one bet of one hundred thousand dollars or 100 bets of one thousand dollars, if I am stopped out at 2% of the amount I bet (you can call it an investment or call it a trade) then assuming that I acutally will be stopped at that level (sufficent liquididty and reasonable spreads allowing this) then I have risked 2% of my total funds.

Next if in my trades my average loss is x and my average gain is 3x I can be wrong 3 out of four times and still break even. If I make more than 3x then things are even better. With a system like I just mentioned if I am right in my trades half the time I am making money.

I do not know Tim’s ahem, batting average but I suspect over a given time period, he is doing better than 50/50.

Risk of ruin. How many times in a row or if you prefer a clump of trades is Tim likley to be incorrect? Or the converse how many times right? So if a bad string of luck occours how likely is it that he is wiped out? These things happen and one should make the bets of a size that you survive such an event. If a string of good luck occours , the size of a bet can be adjusted to increase or decrease risk because you now have more funds. If you bet the same size per trade with the same size stop your risk goes down.

What about trends?

Hypotheticly (for this example I am not using a day trade) Lets say I am blessed and I buy a stock at the begining of a long run such as we saw with Microsoft when it’s price exploded as it grew. Lets say I have made a usual bet of x size then it goes up 4%, if I double my bet but keep the percentage stop at 2% (of the price I paid of the second bet) in my belief that I have caught a trend, then the potential gain to my portfolio is doubled for each move up (from my orig. position) but my risk of a lose has been reduced. Take a look at the books on the Turtle Traders. Their rules had them pile on when right which can result in large gains. This is about math and not about Tim! If Tim is not adjusting where he gets out when having gains then there is a potential problem in his keeping gains.

Tim is (sort of ) trying to replicate his earlier trading results to prove the point that his apporach works (and therefore you should send $ to him for goods and or services). This is putting yourself on the line. I am interested in how any other accounts he has are doing, but in the long run that may not be my business.

As far as number of trades that is irrelevant. Results matter. If I make one trade in 10 years in a stock or one thousand trades a week if at the end of the 10 years I have after all costs have been subtracted have the same increase in my money the result is the same. Of course there are going to be ups and downs along the way. In fact the rapid trading approach might have less drawdowns. Since it is being activly managed.

There is a hedge fund headed by the mathmatician Thorpe (he invented card counting). It is a black box system where a computer makes about 3k trades a day. They make about 30% a year. It is done by having an edge in terms of the odds. On a sufficent number of trades they make money. it is like the casino in Las Vegas. The operators know that sometimes they will have a string of good or bad luck, but over time with enough bets placed, they will make a percentage of the total as profit.

So the real question is “Is Tim making his $ by luck or because his approach causes him to have an edge?

PErhaps we should look at his large bets and determine how often he looses $ on those and how much as a % of his portfolio he gains, in order to determine if he is a a chump depending on luck on those outsized trades or if he is taking a viable approach.

My wife once worked at a company where the delivery person was a retired perosn who wnet to the tracks and actually did well. He tended to bet on jocky /horse combinations. People made fun of him. But his little side hobby paid for his Buick and his RV. I saw him once in action at a company party party at the tracks, sure enough overall he made money. Why? He had an edge and knew how to bet with it.