Maverick Money Management---Good, Bad or Ugly?

[tech/a]

What in your view is a Maverick?

Are you a "Maverick?"
Have you every been a successful Maverick?
A reformed Maverick?
A recovering Maverick?

Any good or bad Maverick experiences?
Any advice?
Is it a good or bad way to do things.

I'm actually speaking of Mavericks in all areas of Wealth creation not necessarily trading alone.

[MS+Tradesim]

Reformed maverick. Confused luck with skill and loaded up.

While I think what Ivan has done is fantastic and good on him, I did big things in shares and lost the lot when things changed. Took me years to accept responsibility. Since then, risk management is everything.

[nunthewiser]

need to be able to tick more than one option tech/a... them bottom 2 sum it up

[sammy84]

I think nearly every trader started out as a bit of a maverick, then the results of this led us to learn money management.

[Trembling Hand]

Guys I do this stuff all the time. in fact I've done it about 30 times in the last 2 years.

BUT

If you are learning to trade this will do more damage than good. A lot of trauma & bad habits comes from blow ups. If you are not reasonably competent in what you are doing you are more than likely going to just program yourself to the fight or flight response. not the ideal learning environment.

[MS+Tradesim]

If you are learning to trade this will do more damage than good. A lot of trauma & bad habits comes from blow ups. If you are not reasonably competent in what you are doing you are more than likely going to just program yourself to the fight or flight response. not the ideal learning environment.

Amen. Preach it bro.

[tech/a]

I ticked multiple options so you can choose more than 1

[peter2]

Thanks TH, what would you say to those who know what they're doing but have never risked a large % of a small amount?

There has got to be some benefit of going a little crazy once or twice.

[Cartman]

If you are learning to trade this will do more damage than good. A lot of trauma & bad habits comes from blow ups. If you are not reasonably competent in what you are doing you are more than likely going to just program yourself to the fight or flight response. not the ideal learning environment.


very responsible post from someone who has been both sides of the fence

never seen a great trader yet who hasnt blown a few accounts --- its called experience/paying your dues etc ----

without experience Maverick MM WILL blow you up ---

with experience, there is no such thing as Maverick MM --- UNLESS you didn't learn anything from the blowups --- it just becomes calculated risk; thats why they call it experience !!

[Mr J]

Are we defining a maverick as someone who doesn't adhere to responsible money management?

[tech/a]

Are we defining a maverick as someone who doesn't adhere to responsible money management?

As percieved by others. Yes

[motorway]

Are we defining a maverick as someone who doesn't adhere to responsible money management?

A maverick is an unbranded range animal, especially a motherless calf. It can also mean a person who thinks independently,
, a lone dissenter, a non-conformist or rebel. Sometimes it means to swear to one.

A true maverick would have to tick all four

motorway

[motorway]

I in the end ticked three boxes

motorway

[Timmy]

Nah ... this is Maverick.

[Timmy]

A true maverick would have to tick all four

motorway

LOL! GOLD!

[brty]

Should a $2,000 account be traded the same way as a $200,000 account??

Can you/me/we/us be mavericks with one and not the other??

At what point should a change from maverick to conservative occur??

Will changing kill results or save because of changing market conditions??

When will the questions stop and answers appear??? :p:

brty

[brty]

29638

And I thought his a Maverick!!!

[alwaysLearning]

I think that the MM used to build an account fast can be used in moderation somehow. If you built up consistant trading profits each week for awhile, you can put a little aside and throw it in a bucket shop brokerage account and have some fun with it.

As for the actual MM used as a maverick over the long term, it would be a bad idea. I think the idea is to keep risk small in the begining so that you can survive long enough to build skill. Without skill you will blow up doing maverick money management before you know it, lol.

When you have the skill, and IF you are very confident of something happening or whatever, then you can increase your position size at times to make a quick bigger gain. But hey, the markets are uncertain, or rather you are uncertain of where the market will go, so its important to weigh up the risk witht he reward.

The bottom line is that it can be done BUT very few people can do it, and even those people can blow up fast when you are leveraging your entire account at 400:1 or whatever. So in other words if you want to blow $1000 and it is spare cash and you don't care about it at all period. Then sure, do what TH has done or the guy from forex factory and throw it in a bucket shop broker and gun it and see how far you can get.

If you care about that 1000$ then don't do it, lol.

Someone asked earlier if this is the way we should all be doing it, uhm no, I don't think so. Need to get the skills up first and then IF you have enough money, put some aside and have a go. But don't be surprised if it blows up on you fast, real fast. In fact you can try and have a go at doing this with a demo account. See how hard it actually is :)

So yes, we risk no more that 2% per trade so that we don't blow up quickly and can survive a losing streak. Also, I believe that the total freak traders such as Jesse Livermore were so skilled that they knew when to ramp up and not to ramp up. That's how they were able to be consistant and be huge at the same time in my opinion.

By the way, ivant is obviously very skilled...you can't just fluke turning $1300 into $400000 in one year. They guy had to take HUGE risks but at the same time, he obviously knew what he was doing and had the skill to pull it off. But will he be able to be that consistant in the years to come? I don't know, I hope so, for his sake.

But then, I'm sure he'll continue to learn and figure out what works and doesn't work. And so he'll probably be doing this stuff for a long time yet :D

[Mr J]

By the way, ivant is obviously very skilled...you can't just fluke turning $1300 into $400000 in one year. They guy had to take HUGE risks but at the same time, he obviously knew what he was doing and had the skill to pull it off. But will he be able to be that consistant in the years to come? I don't know, I hope so, for his sak

I'm going to have to address this. No, he didn't have the "skill to pull it off". He took large risks, and the variance was favourable. The end result was completely out of his control. He may be very skillful, but don't disregard that fact that he's had to be quite fortunate to be able to do that.


The bottom line is that it can be done BUT very few people can do it

Those who can apparently do it are on the edge, if not over it. In the end we are all vulnerable to variance, and trading aggressively just increases the vulnerability. We can't control variance, so skill isn't a factor. All we do is stack the deck and hope the cards play our way.

[Trembling Hand]

Would of liked this pole to be open to see who voted for what.

[alwaysLearning]

I'm going to have to address this. No, he didn't have the "skill to pull it off". He took large risks, and the variance was favourable. The end result was completely out of his control. He may be very skillful, but don't disregard that fact that he's had to be quite fortunate to be able to do that.



Those who can apparently do it are on the edge, if not over it. In the end we are all vulnerable to variance, and trading aggressively just increases the vulnerability. We can't control variance, so skill isn't a factor. All we do is stack the deck and hope the cards play our way.

I understand what you are saying but I find it unlikely that this is just luck or that variance was favourable. He made many many trades over a long period of time. I'm not sure what it is, but he did make good decisions consistantly.

Isn't the proof in the pudding? I mean, 12months is plenty of time with lots of trades. If it was going to go pear shaped on him it should have happened within a year. (when taking such extreme risk)

I find it less probable or likely that a person can do that for such a long period and be 'lucky', with that number of trades over a 12month period, he must have been very skilled in my view and had a style of money management that supported his edge.

I mean, if you locked someone else up in a room who didn't have a trading background and you asked them to trade on variance and luck, would they have been able to do what he did? I really doubt it.

What about TH? TH turned $1000 into $50000 within one week? Was it just variance that enabled him to do that? I doubt it since he has done it several times. (generated big returns from a small account that is)

edit: I will agree with you though that the markets are definitely uncertain and that we can not know for sure where price will go all the time. We can't be successful with every trade just because of skill. BUT over time and with an edge, we can be profitable. So yeah, just because ivant made that much money in 12months doesn't mean that he didn't lose money along the way, rather that he chose the precise trades to ramp up and generate big results, and he did that enough times over 12months to give he return that he got.

The question I suppose would be, how many times can you 'ramp' up and get it right before you blow up? But I suppose that is where the edge and discrection comes into the equation and probably the skill factor. I don't know.

[kennas]

I'm extremely conservative.

But, I look back and wish I was a maverick.

For just the bull market.

[nomore4s]

I'm extremely conservative.

But, I look back and wish I was a maverick.

For just the bull market.

That's the trick isn't it, knowing when to load up and when not to.

I would have preferred to be a maverick at the top of the bull market and ridden it down;) - pretty much what ivant did.

[skc]

I think of it this way...it's a 2x2 matrix...

1. Skilled with balls of steel = successful traders who take more risky approach
2. Skilled with balls of normal human tissues = successful traders who follow normal risk management
3. Unskilled with balls of steel = (3a) May get lucky or, more probably, (3b) easily wiped out
4. Unskilled with balls of normal human tissue = Inconsistent results

A perfect example - for every ivant who post on this forum, there are 20,000 new traders who blew their $1000 account. Is ivant a (3a) or a (1)? I don't know. But (3a)'s don't stay there forever - they either become a 3b, or they turn into a 1, or their balls of steel turn back into human tissue.

To me I think the right path is to move from 4 to 2 and then try 1 if you so desire. The wrong path is start at 3 and hoping to land in 3a...

[kennas]

That's the trick isn't it, knowing when to load up and when not to.Yep. I think the first time I met YT I told him the world was about to implode and we should get out of the market. Over the next year I think he made a couple of mil, while I sat on my hands with some managed funds and sold any 10% gains. Lovely in hindsight. :banghead:

[nunthewiser]

Would of liked this pole to be open to see who voted for what.


i voted for the bottom 2 options

[MS+Tradesim]

i voted for the bottom 2 options

Ditto.

[Mr J]

I understand what you are saying but I find it unlikely that this is just luck or that variance was favourable. He made many many trades over a long period of time. I'm not sure what it is, but he did make good decisions consistantly.

....................

The question I suppose would be, how many times can you 'ramp' up and get it right before you blow up? But I suppose that is where the edge and discrection comes into the equation and probably the skill factor. I don't know.

I'm not saying skill wasn't involved, as skill makes it far more likely to experience such a result. Without skill, there's almost no chance that someone could accomplish a similar feat over what I assume is a decent sample. I'm just saying that he must have been trading very aggressively, and could easily have finished with a fraction of what he has, have a large enough draw down to make trading not worthwhile etc. Hell, he may have easily finished with more, as I'm assuming a few good trades significantly affect the balance.


What about TH? TH turned $1000 into $50000 within one week? Was it just variance that enabled him to do that? I doubt it since he has done it several times. (generated big returns from a small account that is)

Skill just gives him a much better chance of doing it. When I said skill is irrelevant, I mean when it comes to just how much we make. I didn't mean to say it wasn't influential, just that EV (skill) does not determine the result, it merely influences it. Hence the "stack the deck and hope it goes our way" comment.

[Cartman]

I think of it this way...it's a 2x2 matrix...

1. Skilled with balls of steel = successful traders who take more risky approach
2. Skilled with balls of normal human tissues = successful traders who follow normal risk management
3. Unskilled with balls of steel = (3a) May get lucky or, more probably, (3b) easily wiped out
4. Unskilled with balls of normal human tissue = Inconsistent results

A perfect example - for every ivant who post on this forum, there are 20,000 new traders who blew their $1000 account. Is ivant a (3a) or a (1)? I don't know. But (3a)'s don't stay there forever - they either become a 3b, or they turn into a 1, or their balls of steel turn back into human tissue.

To me I think the right path is to move from 4 to 2 and then try 1 if you so desire. The wrong path is start at 3 and hoping to land in 3a...

nice use of numbers SKC :D ----


i voted for the bottom 2 options

i didnt actually vote on the poll, but ---

ive worn the "2" shoes in the past ---- cause "4" is a reality (without experience)

i'm working towards wearing the "1" shoes cause i believe "3" is also a reality (with experience --- and a lot of hard work --- which are pretty much the same thing in the end !! )

ps my 1234 is from the original poll not SKC's numbers ---- that would make no sense at all lol --

[alwaysLearning]

I'm not saying skill wasn't involved, as skill makes it far more likely to experience such a result. Without skill, there's almost no chance that someone could accomplish a similar feat over what I assume is a decent sample. I'm just saying that he must have been trading very aggressively, and could easily have finished with a fraction of what he has, have a large enough draw down to make trading not worthwhile etc. Hell, he may have easily finished with more, as I'm assuming a few good trades significantly affect the balance.



Skill just gives him a much better chance of doing it. When I said skill is irrelevant, I mean when it comes to just how much we make. I didn't mean to say it wasn't influential, just that EV (skill) does not determine the result, it merely influences it. Hence the "stack the deck and hope it goes our way" comment.

ahh yes definitely, I think I see what you mean now. Yeah the risk of ruin is there whether you are skillful or not. So yeah, I agree with you in that sense. Nothing is certain in the world of trading that I've observed.

[Mr J]

I probably could have been clearer, but I have a habit of trying to explain things in detail, which only makes it more confusing :confused:.

[shag]

whats life without risk
rather apt with anzac day looming.
the market attracts risk takers.

[shag]

Yep. I think the first time I met YT I told him the world was about to implode and we should get out of the market. Over the next year I think he made a couple of mil, while I sat on my hands with some managed funds and sold any 10% gains. Lovely in hindsight. :banghead:

i bet its better than having to tell the wife u lost a hundred or two k today...

[tech/a]

I havent voted.

But all 4 for me.

I have one thing to say BOTH winning and Losing as a Maverick ARE life changing.

In the early 80s I really didnt know I was a Maverick,I didnt know that I had risked EVERYTHING (In property). I had no concept of RISK.

Over 3 yrs
It cost me our home,my marriage,destroyed my business,and lost all but my best of friends.I came terribly close to bankruptcy---I could smell it!


In the late 90s I knew my RISK,I knew the consequences of that risk,I was able to quantify that risk.(In Property).

Over 5 yrs
I'm Building my Mc Mansion,I'm very happily married,My business went from strength to strength,still got my best of friends.

Now I can retire if I wished---I dont wish.

I no longer need to be a Maverick.

I really think that to really excel we need a good dose of Maverick in us all.

[saiter]

This thread has inspired me to risk all my capital on a single stock. Thanks guys! :D

[MS+Tradesim]

This thread has inspired me to risk all my capital on a single stock. Thanks guys! :D

Red or black?

[tech/a]

This thread has inspired me to risk all my capital on a single stock. Thanks guys! :D


You make an excellent Maverick.
If your happy with the consequences(+ or -) then Go for it.

[Cartman]

I havent voted.

But all 4 for me.

I have one thing to say BOTH winning and Losing as a Maverick ARE life changing.

In the early 80s I really didnt know I was a Maverick,I didnt know that I had risked EVERYTHING (In property). I had no concept of RISK.

Over 3 yrs
It cost me our home,my marriage,destroyed my business,and lost all but my best of friends.I came terribly close to bankruptcy---I could smell it!


In the late 90s I knew my RISK,I knew the consequences of that risk,I was able to quantify that risk.(In Property).

Over 5 yrs
I'm Building my Mc Mansion,I'm very happily married,My business went from strength to strength,still got my best of friends.

Now I can retire if I wished---I dont wish.

I no longer need to be a Maverick.

I really think that to really excel we need a good dose of Maverick in us all.

now that is a post from someone who has had "experience" ;) lol ---

age/marital status/commitments/financial security/reason for doing whatever/ etc etc are what determine what we do as individuals

perhaps we are simply pre-programmed to behave as dictated by our cellular constituency !! --- who really knows what makes us do what we do !! :D

and do we deserve to take credit/feel pride if we are successful at something ---- maybe we are just lucky to be who we are (or unlucky, depending on the circumstances !!)

[tech/a]

now that is a post from someone who has had "experience" ;) lol ---

age/marital status/commitments/financial security/reason for doing whatever/ etc etc are what determine what we do as individuals

perhaps we are simply pre-programmed to behave as dictated by our cellular constituency !! --- who really knows what makes us do what we do !! :D

and do we deserve to take credit/feel pride if we are successful at something ---- maybe we are just lucky to be who we are (or unlucky, depending on the circumstances !!)


Cartman

let me add this.

My spectacular Failure would be seen by most as terrible bad luck---18% interest rates and another 6% default on top of that!

My Spectacular Success would be seen by most as tremendous stroke of luck---the biggest housing boom seen in a lifetime.

ON REFLECTION

I see the first as ignorance.
The second as experience.

[Cartman]

Cartman

let me add this.

My spectacular Failure would be seen by most as terrible bad luck---18% interest rates and another 6% default on top of that!

My Spectacular Success would be seen by most as tremendous stroke of luck---the biggest housing boom seen in a lifetime.

ON REFLECTION

I see the first as ignorance.
The second as experience.

its all good Tech --- i know where you are coming from ---- in your above post, the word "most" would be the operative word ---

honesty with oneself is an admirable attribute !!

[Bobby]

honesty with oneself is an admirable attribute !!

Yes , its also the only thing that will save you when real trouble hits .
Well said Cartman. :)

As for Maverick trading , I just love it !! :D
Makes me feel alive , all those books on trading I have in my library are now redundant , stale thoughts that I followed once .

[Cartman]

Yes , its also the only thing that will save you when real trouble hits .
Well said Cartman. :)

As for Maverick trading , I just love it !! :D
Makes me feel alive , all those books on trading I have in my library are now redundant , stale thoughts that I followed once .


people are gona start thinking your a bit crazy Bob ---- haha

the funny thing is (and im guessing we are thinking the same language), the "Maverick" style of trading can actually be less risky than regular trading if it all goes to plan, cause you are playing with the house's money ----

the real fun/stress starts when you get to that level where the brain has to decide "deal or no deal" --- i'm still pretty conservative in a Maverick sense, but that comes down to (lack of) experience ---- i give myself about 2 years to get it right --- after that --- well thats another story :dunno:

[So_Cynical]

I have been a very successful maverick at times....everything from 200/1 winners at the races
(backed deliberately for the win) to getting down to my last $5 at Jupiter's casino one nite and
leaving 2 hours later with 300 bucks, all won on even money bets (roulette & two up).

In my trading and investing im a more organized maverick than i used to be, i am now willing and
in fact eager to take a loss and get out of something that's gone against me, and thanks to this
forum im much more disciplined, however when picking stocks im still somewhat a maverick/punter.

I like the big results u get from having big positions...funny cos that's what lead me to big punting
back in the day, currently im trading/investing all my (Disposable) funds in 2 positions, planing to
just keep turning that over and over and building...until i have enough for 3 positions etc.

[ivant]

Reformed maverick. Confused luck with skill and loaded up.

While I think what Ivan has done is fantastic and good on him, I did big things in shares and lost the lot when things changed. Took me years to accept responsibility. Since then, risk management is everything.

That is yet another difficulty in trading, accepting responsibility. Picking bull markets and knowing when they end is the trick :) It is far from easy too! Although the tape starts telling you little whispers when things die off.


29638

And I thought his a Maverick!!!

I have a love for that movie. I think I saw it when I was 12 or so for the first time, and I fell in love with it then :)



When you have the skill, and IF you are very confident of something happening or whatever, then you can increase your position size at times to make a quick bigger gain. But hey, the markets are uncertain, or rather you are uncertain of where the market will go, so its important to weigh up the risk witht he reward.

If I may add to this, also confident in yourself. If you are in the zone, pile it up.




By the way, ivant is obviously very skilled...you can't just fluke turning $1300 into $400000 in one year. They guy had to take HUGE risks but at the same time, he obviously knew what he was doing and had the skill to pull it off. But will he be able to be that consistant in the years to come? I don't know, I hope so, for his sake.

But then, I'm sure he'll continue to learn and figure out what works and doesn't work. And so he'll probably be doing this stuff for a long time yet :D

Most definitely. Learning is a big part. You can't stop learning. Things go in cycles and something from the past can give you a good hint, something in the present can also help. There is a lot of stuff out there to grasp. These small hints make up the big picture. Think about credit cards for example. Who doesn't think that will be the next big downfall. If people can't repay homes, how can they repay credit cards with 20% interest. But we will see if this plays a part when unemployment jumps. It takes 6 months for a bank to right off credit. So this could happen a few years into the future. Although, on the bright side, Citigroup can't fail twice lol. Thank you for believing I have skill, I'd love to think so. Only time will tell though :)



I think of it this way...it's a 2x2 matrix...

1. Skilled with balls of steel = successful traders who take more risky approach
2. Skilled with balls of normal human tissues = successful traders who follow normal risk management
3. Unskilled with balls of steel = (3a) May get lucky or, more probably, (3b) easily wiped out
4. Unskilled with balls of normal human tissue = Inconsistent results

A perfect example - for every ivant who post on this forum, there are 20,000 new traders who blew their $1000 account. Is ivant a (3a) or a (1)? I don't know. But (3a)'s don't stay there forever - they either become a 3b, or they turn into a 1, or their balls of steel turn back into human tissue.

To me I think the right path is to move from 4 to 2 and then try 1 if you so desire. The wrong path is start at 3 and hoping to land in 3a...


Hahaha well said :) Nice idea. I could also be a 4 you know :) These things aren't easy to predict my friend :)

[Mr J]

I havent voted.

But all 4 for me.


Technically, you were a winning/losing Maverick. Those who never were may miss out on some important lessons. As much as it sucks, the tough times are character-building.

[tech/a]

Technically, you were a winning/losing Maverick. Those who never were may miss out on some important lessons. As much as it sucks, the tough times are character-building.

Learnt more from Failure through life than from Success.
In Hindsite
Wouldnt trade those times of hardship---for success either.
for not to have suffered and battled through hardship would leave me I'll prepared for the multitude of times it raises its ugly head.

Now I greet it with enthusiasm.(The doom and gloom and the seemingly impossible).

If you want to be a real Maverick you need to be able to recognise when the crowd is down well before they do.
You need to see the punch well before it hits you.
You need to place yourself in the plane for take off before it does.

In other words put yourself in front of LUCK and remove yourself from BAD LUCK.

[Mr J]

You're preaching to the choir here ;).

As humans, failure forces us to contront reality, and those of us who will learn will find it invaluable. We're usually complacent in success, as when things are going well, there doesn't seem to be a reason to analyse our actions and to better ourselves. Those who have failed but are now successful will probably not only have better refined their methods, but also have a discipline and stability that is otherwise hard to gain.


If you want to be a real Maverick

A maverick of trading, it depends who I'd be comparing myself to. To successful traders, then no. To the market as a whole? Yes. Same goes for money management. If it's to the market as a whole, yes, but if compared to the responsible and profitable crowd, then no.

[Bobby]

people are gona start thinking your a bit crazy Bob ---- haha

the funny thing is (and im guessing we are thinking the same language), the "Maverick" style of trading can actually be less risky than regular trading if it all goes to plan, cause you are playing with the house's money ----

the real fun/stress starts when you get to that level where the brain has to decide "deal or no deal" --- i'm still pretty conservative in a Maverick sense, but that comes down to (lack of) experience ---- i give myself about 2 years to get it right --- after that --- well thats another story :dunno:

Hello Cartman , yep I do play one A/C a bit crazy , why ? because its exciting to cut & thrust & not worry about the outcome , your right about when its the house's money especially ~ Thats when the real fun happens :nuts:

I'm very conservative otherwise :rolleyes:

[Mr J]

cause you are playing with the house's money ----


There are two ways to look at it. The first is that it's not your money until you take it off the table, and the second is that if you can lose it, then it is yours to lose. The first only exists because people ignore the second :D.