LTCM , Quants and averaging

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Pure Pip Producer

Well-known member
490 254
If you read about "Long-Term Capital Management" then you will see only "external" actor saved some money.
There is good book about LTCM

LTCM had lots of clever people. Good riskmanagers ( human ) Very good traders and "exit" plan but couldn't apply when they got a hit.

cf : https://en.wikipedia.org/wiki/Long-Term_Capital_Management

LTCM was made by only stupid Quants, that i hate.

We are at the opposite of Quants.

We are "Quals".
 

Pure Pip Producer

Well-known member
490 254
Really, i like to speak with traders, but i will not speak with traders who average down.

I'm sorry to be honest.

But traders who average down pull the debate down...

That's why i don''t speak with peolpe in general.

I would like to speak with people who understand the risk management so much, that they scale in their positions...

So i wish you good luck in your averaging down strategy. You will need it, my friend.

Have a nice day.
 

CavaliereVerde

Established member
553 814
Really, i like to speak with traders, but i will not speak with traders who average down.

I'm sorry to be honest.

But traders who average down pull the debate down...

That's why i don''t speak with peolpe in general.

I would like to speak with people who understand the risk management so much, that they scale in their positions...

So i wish you good luck in your averaging down strategy. You will need it, my friend.

Have a nice day.
Try to control your instincts and behave... ;)
 

hefoba

Member
94 74
Really, i like to speak with traders, but i will not speak with traders who average down.

I'm sorry to be honest.

But traders who average down pull the debate down...

That's why i don''t speak with peolpe in general.

I would like to speak with people who understand the risk management so much, that they scale in their positions...

So i wish you good luck in your averaging down strategy. You will need it, my friend.

Have a nice day.

Good then I know ...
 
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SteadyWins

Junior member
39 56
Go in big DD is not easy and put a lot of pressure on you as trader. So RM will help you as trader.
RM has been developed to normalize risk between all Darwins (to compare apples with apples) and to protect investors from reckless traders. But never to protect the trader of course.

But I think I understand what you mean. Something like: "I lost 20 percent of my account, but look, it is not too bad, my Darwin just lost 8 percent, let's go on".

Honestly, on the long term, thinking in that way won't help a trader at all I'm afraid. In fact, I think the opposite is true. It will keep him from addressing the cause of the 20 percent drawdown.
 
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SteadyWins

Junior member
39 56
Try to control your instincts and behave... ;)
I agree with that.

Like Pure Pip Producer, I also reacted a bit irritated / with some emotions to hefoba last week. Will try to not do that again.

But I can understand Pure Pip Producer. I think that he and I have very comparable views on risk management, and these views are diametrically opposed to those of hefoba.

That can sometimes lead to some irritation on the forum, but also to some entertainment;)
 

Pure Pip Producer

Well-known member
490 254
Those who want constructive criticism on risk management can go to check my trading journal...That's all

That's probably better than speaking and speaking and speaking again...
 

hefoba

Member
94 74
But I can understand Pure Pip Producer. I think that he and I have very comparable views on risk management, and these views are diametrically opposed to those of hefoba.

That can sometimes lead to some irritation on the forum, but also to some entertainment;)

I was not talking about my trading. I was giving examples of historical events where RM would solve some issues.
I do not plan to write about my trading but my view of events and my view of different current situations.

If people can not accept that I'm sorry for that.

I have no time to fight so some nice diner and IRL life will be good for me.
 

Pure Pip Producer

Well-known member
490 254
I was not talking about my trading. I was giving examples of historical events where RM would solve some issues.
I do not plan to write about my trading but my view of events and my view of different current situations.

If people can not accept that I'm sorry for that.

I have no time to fight so some nice diner and IRL life will be good for me.
LTCM was not a RM problem!

They couldn't exit from the Market because of the liquidity.

That's why they failed...
 

CavaliereVerde

Established member
553 814
I agree that averaging down is an element of potential danger and I dont' average down, but I try to be a bit open minded, so I am not certain that every trader that averages down is a gambler doomed to blow.
 
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