Cawkwell's Evil Day

raven,

the cawkwell has made a guest appearance on advfn a short time ago, he comes across as a pretty arrogant individual imho, he didn't, or couldn't be bothered to reply to half the questions put to him. maybe he was a wee bit inebriated tho'.

you pay's yer money.....
 
boy said:
raven,

the cawkwell has made a guest appearance on advfn a short time ago, he comes across as a pretty arrogant individual imho, he didn't, or couldn't be bothered to reply to half the questions put to him. maybe he was a wee bit inebriated tho'.

you pay's yer money.....
Click to expand...


I have all of his books they are great reading & my passion is short selling of UK equities (along with vulture investing), he is very entertaining in his own unique style.
 
Mark -
other people don't drink petrol?
Wow, that's why they keep looking at me funny down the local BP forecourt....
 
Ravenglass,
I subscribed to t1ps.com for a while. It was a complete waste of time. Don't bother. You can easily find public domain sites which give better opinion and comment, free of charge.
regards, G McA
 
Re: EK

I can't get my head round shorting stocks, the risk reward is so skewed in that you can't make more than 100% at best, and your trousers are down if it goes up.

Safer to use options on short side IMO, or short indexes where the upside surprise is more limited (takeover bids of indexes are rare).
 
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DaxTrader said:
I can't get my head round shorting stocks, the risk reward is so skewed in that you can't make more than 100% at best, and you trousers are down if it goes up.
Click to expand...
DT - I don't understand what you mean. 100% of what?
 
TheBramble said:
DT - I don't understand what you mean. 100% of what?
Click to expand...
I think he means the stock price can only go to zero so you make 100%, but when long a stock could more than double...

Stew
 
Ah...OK. I was coming at it from a risk:reward angle - where you (can) make equally good profits in either direction.
 
Yep, you can make good profits in either direction.

But the worst case scenario when short is much, much worse than when being long...
 
DaxTrader said:
Yep, you can make good profits in either direction.

But the worst case scenario when short is much, much worse than when being long...
Click to expand...
Don't follow. Your stops are set to protect you to the level of your max risk either way. Providing you don't deliberately bias your risk in one direction - you're as safe short as long if the market goes against your position.
 
Agree with Bramble- it doesnt make sense. New to these threads - anyone ever chat about Value at Risk? (VAR). Now there IS a can of worms.. But, if you can't quantify your risk, how can you quantify your return on capital employed?
 
ravenglass said:
I have all of his books they are great reading & my passion is short selling of UK equities (along with vulture investing), he is very entertaining in his own unique style.
Click to expand...

If you have read Cawkwell in book form, you have had the best of him, I think. Subscription to the t1ps website confers the privilege of listening to the great man rambling on about his latest positions in the market, the gee-gees etc. If this is your passion, but only then, it may be value for money. Voice like mulled claret.
 
stops are fine, but slippage in worse case scenarios can make your stop meaningless, and "worse cases" tend to happen much more often than we think.

News tends to come out pre mkt, and there are lots of potential events with stocks that will make them Gap miles beyond your stop.

- a company perceived to be going bust suddenly gets offered a new credit line or something - could be 50% gap

- new inventions/patents product announcements

- takeover bid

- then there is scheduled results - they can gap a stock through your stop by miles

In very volatile markts like 4 yrs ago, you could have got stretchered out shorting some stocks to come in the next day and find the first traded price on your stop was 30% from your stop level

This is only my view on it, each to his own etc
 
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jimbo57,

...... anyone ever chat about Value at Risk? (VAR).
Click to expand...

This subject is hardly discussed at all and even worse is not understood by virtually anyone. They seem to think that the risk on a trade is equal to where a stop loss is placed which it is not. Attempts to discuss this in any meaninful terms in the past have been dismissed as almost irrelevant so I thought that there is little point in pursuing it further.


Paul
 
Trader333 said:
This subject is hardly discussed at all and even worse is not understood by virtually anyone. They seem to think that the risk on a trade is equal to where a stop loss is placed which it is not. Attempts to discuss this in any meaninful terms in the past have been dismissed as almost irrelevant so I thought that there is little point in pursuing it further.
Click to expand...
I hear you! I spent a while in a japanese trading house in a previous incarnation,. Many, many hours getting them in the first instance to understand it, and then even more trying to stop the Japanese management misapplying it.
It might be worth another attempt to get the ball rolling, as could help some guys understand in $ terms the real potential risk to which they expose themselves everyday, and quant the chances of it happening.
 
Var vs position risk

I am relatively new to trading but don't quite understand VAR ;as if its fundamentally different to position risk?
I accept that every now and again your stop will be gapped or jumped over but on the whole out of say 100 trades this will only happen say 5% of the time. So ultimately does it make that much difference?
I stand to be corrected; I should add I day trade the Nasdaq.

Russell
 
rdstagg said:
I am relatively new to trading but don't quite understand VAR ;as if its fundamentally different to position risk?
I accept that every now and again your stop will be gapped or jumped over but on the whole out of say 100 trades this will only happen say 5% of the time. So ultimately does it make that much difference?
I stand to be corrected; I should add I day trade the Nasdaq.

Russell
Click to expand...
VAR will not change the outcome of your trading, so doesnt make a difference in that sense. It is an attempt (developed by JPmorgan I think) to value the inherent risk in a trading book at a given confidence limit given historical market behaviour.

It is especially useful if you are trading various instruments simultaneously in different time frames. I trade oil futures primarily, if you think about it, being long 10 lots of Dec05 futures is less "risky" intuitively than being long 10 lots of Aug04 futures as the back of the curve doesnt move around as much as the front. VAR takes the correlations between the months, and any cross correlations with other comodities you may have in the book, to value the risk in the book in $ terms.

As a self directed trader, the chances are that the book is a lot simpler than in a pro trading house. But even if you only have one position in one instrument open at any one time (to take it to its simplest level) I would recommend looking at the daily standard deviations of price movement (over a 30 day period say) and calculating the risk inherent in a 1,2 and 3 standard deviation event. Not only will it give you a better idea of the risk in your position, it can help with placing sensible stops, and give you a feel for volatility movement.

Just a thought

Jim
 
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DaxTrader said:
stops are fine, but slippage in worse case scenarios can make your stop meaningless, and "worse cases" tend to happen much more often than we think.

News tends to come out pre mkt, and there are lots of potential events with stocks that will make them Gap miles beyond your stop.
Click to expand...
OK I understand now. My fault for making assumptions about how you were trading. I only day trade so I'm never in the market, premarket!

As for slippage making a stop meaningless - too true. But I've been stuffed in both directions - not just on shorts.
 
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