What is the biggest advantage a retail trader has over an institional trader?

[BeginnerJoe]

pro traders will have a daily stop loss that their risk manager sets, after this point you are shut out of the day or the risk manager closes your position for you.

It's a very sound strategy. Letting a loss run is as bad for institutional traders as it is for retail traders.

 

[robster970]

The only thing I need from that is a statement.

What is this fascination with statements BJ?

 

[Ross Spur]

A method that works with zillions in the pot probably won't when you only have a few thousand quid to lose.

 

[counter_violent]

We all have stops and they know it.

We don't all have stops all of the time. Stops are just one tool in the toolbox. If you can't get beyond thinking in absolutes Joe, then you really must give up.

 

[Jonnyrotten]

Size is another big advantage.

 

[BeginnerJoe]

What is this fascination with statements BJ?

A statement is worth a thousand words. It's a concise and efficient conveyor of information.

We don't all have stops all of the time. Stops are just one tool in the toolbox. If you can't get beyond thinking in absolutes Joe, then you really must give up.

I see no distinction between actual stops and mental stops. Are you saying sometimes you have no stops, mental or otherwise, and are willing to carry a draw down for as long as it takes ?

 

[neil]

We don't all have stops all of the time. Stops are just one tool in the toolbox. If you can't get beyond thinking in absolutes Joe, then you really must give up.

So-show me a statement then - oops ! Wrong post

 

[new_trader]

Size is another big advantage.

Are you talking about banging the neighbours wife or trading?

 

[VielGeld]

so to derive an edge all we do is find when an institutional trader must and does trade (they will try and disguise it) and join them.

examples are too many to list, institutional rebalancing, rollovers, expirations. news comes through pre market on a small cap stock. pension fund wants to load/unload, calls institution and hands order to specialist for them to work it.

Interesting idea. I wonder how you would go about identifying such instances.

But what does the opposite imply? That when he does want to trade, there's no way to know or gain an edge? Wouldn't the signs that someone big is buying/selling be equivalent?

 

[robster970]

A statement is worth a thousand words. It's a concise and efficient conveyor of information.

I agree. It tells you for the sample on display whether somebody has generated a profit or not. What it doesn't tell you is:

a) If the sample on display has statistical significance for the trading method(s) used.
b) Whether the method generates sensible risk adjusted returns.
c) What the characteristics of the trading methods are (drawdown, does it scale, etc)

Somewhat limiting don't you think?

 

[Jonnyrotten]

so to derive an edge all we do is find when an institutional trader must and does trade (they will try and disguise it) and join them.

examples are too many to list, institutional rebalancing, rollovers, expirations. news comes through pre market on a small cap stock. pension fund wants to load/unload, calls institution and hands order to specialist for them to work it.

But they suck too.

Are you talking about banging the neighbours wife or trading?

 

[BeginnerJoe]

I agree. It tells you for the sample on display whether somebody has generated a profit or not. What it doesn't tell you is:

a) If the sample on display has statistical significance for the trading method(s) used.
b) Whether the method generates sensible risk adjusted returns.
c) What the characteristics of the trading methods are (drawdown, does it scale, etc)

Somewhat limiting don't you think?

Well, some people know how to trade and some people know how to analyse. I am the latter and I believe I can glean a great deal from statements. The statement not only gives you the outcome but also the context. It's a matter of connecting the dots to see a full picture, or at least the impression of a full picture. For instance, it's not difficult at all to work out the draw down from the open price and the close price. You just need to furnish a chart in between the 2 points if you know roughly when the trade is done.

There's also a psychological dimension to statements. Even if these are not produced, they nevertheless reveals something. There is probabilistics in the art of analysis, and not just in trading.

 

[VielGeld]

Meh, a statement is someone else's solution to every trader's problem. Said solution is very likely to be unique to the individual. You will be able to glean the raw trading stats from statements, but that's about as far as it goes, imo.

While quite interesting to see how that plays out, it's insufficient to personally be profitable.

 

[BeginnerJoe]

Meh, a statement is someone else's solution to every trader's problem. Said solution is very likely to be unique to the individual. You will be able to glean the raw trading stats from statements, but that's about as far as it goes, imo.

While quite interesting to see how that plays out, it's insufficient to personally be profitable.

Why not ? If I applied CV's discipline in his profit taking rules that he demonstrated in his statement, I would have a lot more money in my account. It comes down to not whether information is useful, but whether information is used appropriately.

 

[robster970]

Well, some people know how to trade and some people know how to analyse. I am the latter and I believe I can glean a great deal from statements. The statement not only gives you the outcome but also the context. It's a matter of connecting the dots to see a full picture, or at least the impression of a full picture. For instance, it's not difficult at all to work out the draw down from the open price and the close price. You just need to furnish a chart in between the 2 points if you know roughly when the trade is done.

There's also a psychological dimension to statements. Even if these are not produced, they nevertheless reveals something. There is probabilistics in the art of analysis, and not just in trading.

I think you are referring to Maximum Adverse Excursion on an individual trade rather than the drawdown on an account as a consequence of a consecutive run of losers.

That aside, I just don't agree that you can infer that much from a statement. You have your view and I have mine.

 

[BeginnerJoe]

I just don't agree that you can infer that much from a statement.

I hope more people take this view, then there would be less reluctance in showing statements.

 

[robster970]

I hope more people take this view, then there would be less reluctance in showing statements.

Have you considered that the people that you seek may not want to post up something that may indicate their annual income/net worth on a public forum? What incentive is there to do this? You have to ask yourself, in their eyes, "Are you worth it?"

You're a smart guy, you probably already know the answer to that. So where does that leave you?

 

[VendorExterminator]

so to derive an edge all we do is find when an institutional trader must and does trade (they will try and disguise it) and join them.

examples are too many to list, institutional rebalancing, rollovers, expirations. news comes through pre market on a small cap stock. pension fund wants to load/unload, calls institution and hands order to specialist for them to work it.

It's a pity you can't listen to your own teachings when attempting to "spank a bucketshop".

 

[ChocolateDigestive]

Interesting idea. I wonder how you would go about identifying such instances.

But what does the opposite imply? That when he does want to trade, there's no way to know or gain an edge? Wouldn't the signs that someone big is buying/selling be equivalent?

since you asked I will give you a tip. if you are watching the tape and you see a couple of equal odd lot trades go off simultaneously. This is something to look out for. so you might get 89 contract print off twice or rarely 3 times, this is a double or triple print. This is normally a specialist in the market who is working an order from 2 or 3 big clients. say the specialist is told to sell a large amount of stock by 2 clients, pension funds, hedge funds, whoever. as the specialist works the order throughout the day he will sometimes divide up what he can trade at the time equally between his clients. easiest to spot on a small cap stock with big pre market news. obv if you can spot this early in the day you can effectively 'front run' the huge order

good trading.

 

[BeginnerJoe]

So where does that leave you?

More often than not, I get what I ask for. The point is some people are showing their statements. It's a start. Perhaps one day people will feel left behind if they didn't. Isn't the live call thread a proforma statement of sorts ? Although a real and completed statement remains the most valid.

There is plenty of advantages for people showing, and I understand perfectly well some of the reasons why they might not want to show. I don't point a gun at anyone and say show or die. I doubt there are too many here who are making so much that they are afraid to show. Although I suspect there are many who are making so little that it would be embarrassing to show.

Without showing the performance indicators, discussing trading would be quite meaningless.