Using Newbie - Is anyone able to make system out of that?

[ulebule]

I know it may sound funny for some of you, but some time ago I've heard about this method on some Jake Bernsteins seminair. He spoke about some newbie client he has, who was almost always wrong when trading. So the simplest strategy was to always play aganst him.

So I figured out to do the same and taught my brother how to trade futures (gave him some standard books on Technical Analysis) and asked him to play for some virtual money. Unfortunetly the result wasn't as I was expecting. He balanced around 0 all the time (no big wins, no major losses).

Some time later he was so exciting about whole trading idea, that he wanted to trade for real money. And that's when miracle happened - he lost almost everything he had on his trading account in one day. He was doing some really stupid things like panicing and selling on low of the day. That was the real system I was looking for - true emotions (greed and fear). All I needed to do was to play always against him.
Next day, he claimed to learned on his mistakes, deposited some more money on trading account and started trading allover again. This time I was ready . Of course he lost everything again, and at the end of the day our balance was almost equal 0, but I was pretty sure I found the best trading system there is. Unfortunetly, even we tried later, we couldn't simulate this on virtual money, because then there's no emotions involved, and he was always expecting me to do the opposite, so even he tried he couldn't play like with real money.

I know it may sound to easy, but if really nearly 90% of traders are loosing, then the best trading system is to find one of them (which shouldn't be too hard) and alwys do the opposite. That's as easy as it sounds

Generally my question is - can you find someone like this and try to describe his behaviour? I realy think that measuring people emotions might be the key to trading futures. Unfortunetly it's easy to sit next to this kind of person and do the opposite, but it's very hard to close his behaviour into mechanical system. But I'll try...

[Kappa]

Thanks for your results. A firm I used to trade at did exactly the same but had a computer execute the trades. The results were similar to yours, they found the system lost money due to commission costs. The firm is still operational and is a pro futures trading outfit which only backs traders with their own capital. With sort of business model the traders are well-trained and experienced traders with a good track record. This is probably why the system wasn't profitable. It would probably make money in a retail environment.

[Christos]

That would be the challenge, finding someone that is consistently loosing. Many systems are close to break even before commissions, but end up loosing after commissions.

The other approach is to develop a strategy that consistently looses, but then do the opposite.

[ksama]

And trying to find someone to replace the loser after he/she gives up on trading completely.

I don't believe you can find someone who consistently loses money. I think newbie traders are those who gets huge gains and huge loses. They'll eventually lose all their money, since they're gambling. But how much you can gain out of their loss is questionable, to me anyway.

That sounds like the system where you long when the market is up and short when the market is down. Don't think that works very well.

Just my 0.0000002 cent.

[Fx_Gold]

yeah, Folks....

Funny thread....

Some experienced gamblers try to do the same, but it is probably much easier in a Brick and Mortar Casino than in trading....

Just find a born to be loser....and counterplay what he bets

hehehe