Wednesday, 14 April 2010

Preparedness Meets Opportunity

Lucky for me, for I now have something to post about, there have been a couple of comments on my last post questioning why the ratio of winners to losers falls as the size of the wins or losses increase.

The first comment was that “It's probably because, like most "traders" you back at non-value prices and lay at non-value prices because you don't actually know what the prices should be”.

The obvious rebuttal to this idea is that if anyone consistently backs at non-value prices and lays at non-value prices, their trading will not be profitable over the long-term, but as I am now in my sixth year of trading, I am reasonably confident that overall I am finding value. If the value was poor, I think it would think the luck would have caught up with me by now, although as April is currently in the red, perhaps I am speaking too soon!

I would also imagine that if "most" traders are losing money, then they will not be traders for long.

The second comment is hard to take too seriously, since the language, misspellings and poor grammar used, reminds me somewhat of the Intelligent Design believers who comment on atheist web sites thinking that they have something new to contribute to the debate, but who instead simply reveal their overall lack of intelligence and inability to understand the subject.

To me it suggest you're crap at trading and just gambling to have a pnl with those type of daily profits.
While I accept that there is always room for improvement in my trading, the suggestion that I am “simply gambling” can be easily debunked by my earlier observation that luck would have caught up with me by now had this been the case.

He goes on (in more ways than one…):
But surely this isn't the same Cassini who continually tells us the amounts he makes are no ones elses business and refuses to ever validate his 'winnings' and now we're expected to believe he regulary makes 4 figure sums on a daily basis.
There is only one Cassini here, and the amounts I make are indeed the business of nobody but me.

Whilst it is very kind of you (Anonymous) to offer to audit my accounts, it really isn’t necessary. I keep my own fairly extensive records, and besides, I would first need to validate your credentials, as well as understand why exactly you feel you have the right to see my accounts?

How many other accounts of bloggers have you previously audited? Do you have letters of recommendation from those people? Would you need a statement of my net worth too so that my average daily profits of 1p, 10p, ₤1, ₤10, ₤100, ₤1,000 or whatever they might be, have some perspective? Would ₤1,000 a day excite you more than ₤1 a day? What if it was Bill Gates who was making the ₤1,000 a day? Understand that ₤1,000 a day to someone with a net worth of ten million is no more interesting or relevant than ₤1 a day is to someone with a net worth of ₤10,000.

Is this really so hard to comprehend? Apparently for some, yes. I could understand this curiosity if I were selling something, but this blog was never intended to be for financial profit. It’s just my ramblings on (mostly) a number of sports investment related topics. If it is numbers you are after, then check out the blog roll to the right of this page and you’ll find several. I assume that when you read The Sun each morning for your financial news, you have already verified that the journalists are suitably qualified?

Also, please note that nowhere in my post did I claim to “regularly make 4 figure sums on a daily basis”. What does that even mean? That each day I regularly make 4 figure sums? I wish! Assuming that Anonymous means “frequently” (but then I never said that either), anyone who is into their sixth year of trading, and involved in several markets on most days will, by the law of averages, have a significant number of days where the net profit or loss runs to four figures. In fact there are no doubt many out there whose account balances fluctuate by five figures from time to time, but I’m not at that point yet.

The trick is to increase the frequency of those four figure days, and the ratio in which the good days outweigh the bad days.


Anonymous said...

Think your giving these clowns a bit more credit than they deserve posting replies....

Cassini said...

You're probably right, but it does make it easy to write a daily post. Good luck.