InvestorGeeks

Trading Badly

by Jason

I’m in a funk. You ever get to that place where you want to reverse every one of your trade ideas? I’m there now.

I sell GRMN at $81 and it goes to $103. I buy BBBY for some reason at $36 and it goes low. Then I watch it bounce, set a stop loss that gets hit at $34.74, and watch it have a nice up day today. I sell EBAY in a whipsaw too, and now it’s jumping up like I thought it was going to two week ago.

I think the main mistake here is I’m being conservative, trying to avoid losses. GRMN looks like it’s dropping, sell… EBAY is dropping, sell. The other part of it is that I was nearly fully invested when the stocks started tumbling a couple weeks ago. So “reinforcing” my position was a trick out of my disposal. (That’s my own fault.) I aslo was pretty frustrated for getting in BBBY early and just wanted to get some distance from that trade.

So what do you guys do when you make big costly blunders like this?

Patterns in Random Numbers

by Christian

At iTulip they had an interesting posting regarding the currency markets.

“We are fast reaching a stage at which elegant quantitative models won’t determine who survives, in fact, those that tend to rely on models in this environment may be most likely to be shining shoes sooner rather than later.”

Really, you mean you CAN’T PREDICT? Who would have thought? Seriously, I have been talking about this time and time again (1,2,3). I might be a newbie at this, and I might not have all the credentials of a full time quant. BUT, after a year of doing algorithmic trading I have learned that you cannot and should not predict the market.

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