The trouble is vague aphorisms can be used to retroactively argue for anything, making them useless.Ferru123 wrote:
However, I'm a fan of positive thinking in the sense of saying:
'**** it. I don't know for sure if this will work, but there is limited downside and a big potential upside, so I've nothing to lose by rolling the dice.'
That's the kind of attitude that Peter credits much of his success in trading and in life with.
Jeff
Lets say I want to back something that is at a price of 4.00. I put in an order requesting 3 ticks (so I want to back at 4.30).
Soon the price drifts a little and I get matched at 4.30. Great so far. Now lets say I have a stop-loss of 7 ticks (so I'll get out if the price goes over 5.00).
The price starts drifting...damn! Still drifting, it's gone over 5.00. What should I do?
If I stop-loss for a red and then it reverses and steams in again someone can argue:
'Too negative, you should have stayed positive and not looked for problems'.
If on the other hand I 'stay positive' and don't stop-loss at 5.00, hoping the price will come back, and then it keeps drifting and drifting for a big loss, the same person can then turn around and say
'You idiot, you should have stopped out at 5.00' !
