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James Austin

James Austin

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12 May 2008
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I was reading an article about Mark, who is apparently "one of the world’s top traders"; refer link below.

Assuming that Mark is good at what he does, it never ceases to fascinate me, just how common it is for poeple who end up being highly "skilled" traders, to have initially lost significant sums of money as part of their education (Mark states he lost $500k when he started out); almost a rite of passage -- for some at least!

Secondly, Mark devulges his trading secret that places him head-and-shoulders above the rest . . . . . . . . but you'll have to read the article.

http://www.cmcmembers.com.au/traders_review/pdfs/200808/tr_issue_aug08.pdf
 
James Austin said:
Assuming that Mark is good at what he does, it never ceases to fascinate me, just how common it is for poeple who end up being highly "skilled" traders, to have initially lost significant sums of money as part of their education (Mark states he lost $500k when he started out); almost a rite of passage -- for some at least!
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No never
I NEVER make losses...I win all the time
Execept those several accounts I've blown, but they don't count cause I was just practising :D
 
James,
Have you read the 'Market Wizard' series of books by Jack schwager?

They are filled with stories of the best traders in the World, well worth the read if you haven't yet.

cheers

PS...I wonder if Cook trades CFD's? :D
 
Another thing to consider with these elite traders is their tenacity to stay the course. Great traders become great because they can push through the tough times. Taking a look at the 20-year trading records of people like Bill Eckhardt is a good example. He's had strings of 6-months of losses and even losing years, but he keeps coming back.

The same can be said for top sportsman - they can go through periods of several years without winning yet still come back. Greg Normans performance in the recent British Open is an example of tenacity.

Nick
 
Nick Radge said:
Another thing to consider with these elite traders is their tenacity to stay the course. Great traders become great because they can push through the tough times. Taking a look at the 20-year trading records of people like Bill Eckhardt is a good example. He's had strings of 6-months of losses and even losing years, but he keeps coming back.

The same can be said for top sportsman - they can go through periods of several years without winning yet still come back. Greg Normans performance in the recent British Open is an example of tenacity.

Nick
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Would they be classed as elite traders whilst they are going through those unprofitable years? I would think a down year would imply they are not able to alter their trading to adapt with the market and therefore surely they wouldn't be classed as an elite trader? Or is it appropriate for a trader to continue trading a losing system for a year?
 
Doesn't your comment exemplify the difference between an elite trader and a dreamer? A dreamer expects to win every day in any market condition. Therefore a dreamer will tend to chop and change techniques if not shown a consistent winning streak which in turn detract from profitability. I'm sure Tiger Woods doesn't change his swing after a bad round...
 
Nick Radge said:
Another thing to consider with these elite traders is their tenacity to stay the course. Great traders become great because they can push through the tough times. Taking a look at the 20-year trading records of people like Bill Eckhardt is a good example. He's had strings of 6-months of losses and even losing years, but he keeps coming back.

Nick
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Yes,
there appears to be a much stronger relationship between perseverance and trading success than some unique trading gift or "secret", and success.

Although some forms of perservere wouldnt be too fruitful.
eg., just reading copious amounts on how to trade Vs. copious amounts of screen time.

a perseverance quote I quite like:

if your dream should fall and shatter into 10,000 pieces, dont be afriad to pick up one of the pieces and start all over again
 
Nick Radge said:
Doesn't your comment exemplify the difference between an elite trader and a dreamer? A dreamer expects to win every day in any market condition. Therefore a dreamer will tend to chop and change techniques if not shown a consistent winning streak which in turn detract from profitability. I'm sure Tiger Woods doesn't change his swing after a bad round...
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I see how my comment could be perceived as such, however I was not implying a change of technique moreso a tweaking of technique. I completely understand the need to be tenacious and expect drawdown when trading a method with a positive expectancy. Being a subscriber to the chartist and also an attendee at your Power Setup seminar recently i am very aware of the beginner's cycle you refer to here. What i was trying to get at is tweaking the technique based on the market conditions. Perhaps a similar thing to what the chartist has done in introducing a trend filter?

I just don't understand how you could class someone as an elite trader when they can lose money over the period of a year which i would expect would be in the vicinity of maybe 500 - 1000 trades??

I think if Tiger Woods was hitting more bad shots than good shots over 500 - 1000 shots he would start trying to modify his technique.
 
jersey10 said:
I just don't understand how you could class someone as an elite trader when they can lose money over the period of a year which i would expect would be in the vicinity of maybe 500 - 1000 trades??
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When times are tough the elite trader will make loses but still survive, whereas the amateur trading during the same period will probably lose all their money and be dragged out of trading for good.

So if an elite trader is struggling, what chance does the amateur trader have.

Certain conditions are just too plain hard to trade even if you tweak
 
Convenient that CMC Markets publishes an article detailing how a trader 'lost' all his money when he first started.

But wait. If you persevere, you WILL win all your money back, and more. Lol. And, in the meantime, we'll take you for your losses and brokerage.

But, having said that, i agree with everybody's comments about peserverence.
 
Nick Radge said:
I'm sure Tiger Woods doesn't change his swing after a bad round...
Click to expand...
I think that would ultimately come back to expectancy.

If he knew he'd just played a bad round, then no he wouldn't change. However, if the course conditions changed such that he felt his technique wasn't as effective on that course, then he might try to change his technique to suit those conditions, or simply stop playing on those types of courses.

If he persevered with his old technique and the course conditions stayed changed for a long time, then he might find himself somewhat down on the leader board.

GP
 
el caballo said:
Very nice Aussiet!!! :)
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Thanks el caballo! I think i've been listening to Trembling Hand too much, i've become cynical about the CFD providers... But, i should really take the article for what it is, a guy who sounds switched on and good on him ;)

However, it just seems to suit publications like the CMC magazine to print articles about winners.

Interesting concept about perseverance though.
 
It does seem odd to well research a stock, to buy it at what your research tells you is a good price, then to sell before the end of the day. The overnight gains are usually double the intra-day gains.

I think he's talking about when he was professional, and how he trades on the S&P500 now while he's retired.

I think I need enough to cover a $500k loss, then I could really do some learning.
 
deadset said:
It does seem odd to well research a stock, to buy it at what your research tells you is a good price, then to sell before the end of the day. The overnight gains are usually double the intra-day gains.

I think he's talking about when he was professional, and how he trades on the S&P500 now while he's retired.

I think I need enough to cover a $500k loss, then I could really do some learning.
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What makes you think that he researches a stock before buying it? Most daytraders wouldn't know anything about a stock other then the code.

The reason a daytrader doesn't hold postions overnight is because of the risk. Stock that gaps against you can wipe out profit very quickly. Daytraders positions are probably quite a bit larger than longer term traders.

Like he said he just goes in and takes small bits but probably does this numerous times each day
 
Aussiest,

Hehehe ... you are too harsh on yourself ... your cynicism is well warranted.

FYI, there is a magnificently useful YouTube video with Mark Cook being interviewed

http://www.youtube.com/watch?v=-NR7KbRRuhI

Do youself a favour and watch both. Also, markdcook.com is his website with multiple free commentaries - also very good to reflect on.

Now we just need the inimitable and insightful Trembling Hand to enter the YouTube arena!

Greg
 
Yes, i was thinking we need Trembling Hand's comment on the fact that the CMC Markets magazine published an article promoting the continuation of trading after massive losses!

Ok, i'll keep my cynacism close by. May come in handy :p:

One thing i'm curious about though is where he got the 500k he lost, in the first place?
 
The numbers are thin at the top and they wouldn`t be there without us kooks to make them look good. :disgust:
 
Different traders trade different markets and styles. IF u are trading the "penny stocks" on the ASX then the market has become so thin ( volume wise ) that there are not enough folk around the "table" to trade with. The market has taken a very major hit and liquidity has dried up very substantially.

Many penny stocks stocks have become illiquid or trade very sporadically so the nature of the game changes very drastically from trading volume spurts on many stocks to researching for extremely oversold situations.

Many, many penny stocks are simple small scale explorers with small budgets and only a small amount of money in the bank. They typically have up to several million dollars in the bank and will burn thru this cash over the next year or so. Financing them will be very difficult. Most will eb away and fail or be taken over by someone with cash (assuming they have found something worthwhile to grab).

The only one's worth following are those with growing cash flows or those that are already mine financed thru to production. Even then valuations are pretty shot because of trepidation about commodity pricing. One small example is Integra IGR. They have done everything right in building up mine plant for cash at extreme discounts and finding lots of near surface open pittable gold yet the stock price action looks awful.

Another place to look is energy stocks, some of the very small scale explorers with reasonable growth profiles. One small example is Target TEX which is growing its oil production very significantly from a current 20 bpd to a possible 80-150 bpd over the next six months. Assuming they can keep this up the current market cap could go 5-10 times BUT this stuff is a little like buying a "pig in a poke".

I suspect that energy may hold up better than gold, might even have a significant rally in u if McCain wins in the USA.

Good luck to all longs
 
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