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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Robert O who wrote (507)	6/11/1999 7:21:00 PM
From: P.T.Burnem	Read Replies (1) \| Respond to of 18137

Does anyone have a reference (resource) telling the tale of how Vic Niederhoffer went bust? If you read the book, you may have noticed that V.N.'s specialty was picking tops and bottoms - a high-profit potential/high-risk endeavor. Last year he went broke doing just that - selling naked index puts a correction, and then averaging down into a bear market.

To: Robert O who wrote (507)	6/11/1999 7:43:00 PM
From: -	Read Replies (2) \| Respond to of 18137

<little by little till you're in the red> RO, at the recommendation of John Summa ("The Option Nerd", www.optonsnerd.com) who knows a lot about this topic, I just picked up Larry William's new book "Long terms secrets to short-term trading", it has an excellent section on money-management. He goes through the math, and his long struggles with the issue. The really super, top traders have all struggled with this one long and hard. I touched on it in one of my lengthier "trading issue" posts on this thread - I think it was the one on "The Dark Side" of trading. The important thing is to realize that the position size vs. account size ratio is not something you want to just deal with intuitively. Many traders (even the best ones) are much closer to the "blow up threshold" than they think... Larry's book does a good job of explaining why, and how to avoid getting caught by the statistics. -Steve