JWBK169-Lien July 3, 2007 13:56
Man Versus MachineQ: Out of that basket of 250 trades, how many winners, how
many losers?A: I would say more than half are winners and my winners are
always bigger than my losers. I scratch a lot of trades just trying
to figure out what is going on. For example, if the stock is 50 bid
51 offer. I may try the 51 offers because in stocks you can show
anything you want on the size. You may have a million, but only
show 100, and then just refresh all day long. If you show a million,
you have to do a million unless you quickly cancel. So I’ll buy an
offer or hit a bid just to see if the buyer or seller is real.
Sometimes I want to see if the bid will come up so I will buy
the 51 offer, lift him, and then go 51 bid just to see if the 50 bid
will come up and join me.Q: Some final questions. What’s your number one rule for trading
if you were to boil it down to one idea?A: Number one rule of trading is risk aversion. To make sure
that no matter what happens, no one trade can put you out of
business.Q: What was your worst trade ever?
A: The only thing I can tell you is once I was in a stock and the
stock got halted. There was nothing you can do. I was long the
stock. It got halted and it was bad news. It was a biotech stock. It
opened a dollar and half lower and I had 1,000 shares. So I got
hit.Q: So you never had a 10-point gap against you.
A: No, because I don’t hold stuff overnight and the only thing
that can happen to me is the stock gets halted.