100k or Blowout - My First Discretionary Day Trading System

S

sysdevel99

I've been algo trading for quite a while but over the last year I've tried to focus more on discretionary trading. I started live trading a new trend following system this week with the hope to get to 100k within two years or blow out that account. "Backtests" on the "simulator" have shown pretty good results, about 80% return on a YoY basis, however backtests and simulations are even more useless in discretionary trading than in algo trading. To speed up the entire experiment I'll double my P&L on a weekly basis (up or down) to derive next week's position size. I sucked this week so a good chunk of this mini account is already gone.

Week 11/5-11/9
Starting Capital: 18k (fully leveraged as part of a larger PM account)
P&L:
11/6: -787
11/7: -538
11/8: -988
11/9: 327 (easy day, obvious movements)
Weekly P&L: -1986
Double weekly P&L: -3972
Starting Capital for next week:
18k-3k9 = 14k
 
I expected a successful algo trader to be an automatic successful discretionary trader . I guess I am assuming skills for algotrading necessarily means a deeper understanding of the markets and profits would be easy. What are you trading?
 
pennystocker said:
I expected a successful algo trader to be an automatic successful discretionary trader . I guess I am assuming skills for algotrading necessarily means a deeper understanding of the markets and profits would be easy. What are you trading?
More...

Nothing could be further from the truth. Succesful algo trader will almost always suck as diescdtioary trader. They will subotage themselves.
 
sysdevel99 said:
I've been algo trading for quite a while but over the last year I've tried to focus more on discretionary trading. I started live trading a new trend following system this week with the hope to get to 100k within two years or blow out that account. "Backtests" on the "simulator" have shown pretty good results, about 80% return on a YoY basis, however backtests and simulations are even more useless in discretionary trading than in algo trading. To speed up the entire experiment I'll double my P&L on a weekly basis (up or down) to derive next week's position size. I sucked this week so a good chunk of this mini account is already gone.

Week 11/5-11/9
Starting Capital: 18k (fully leveraged as part of a larger PM account)
P&L:
11/6: -787
11/7: -538
11/8: -988
11/9: 327 (easy day, obvious movements)
Weekly P&L: -1986
Double weekly P&L: -3972
Starting Capital for next week:
18k-3k9 = 14k
More...

Why why why would you go from algos to discretionary? It makes no sense.
 
Overall Higher return on Capital. One of my algo challenges is that the systems that have a high return on capital have a size limit, you can't easily scale them up.
 
sysdevel99 said:
Overall Higher return on Capital. One of my algo challenges is that the systems that have a high return on capital have a size limit, you can't easily scale them up.
More...

Easy then, just go to higher time frames if the underlying logic allows
 
pennystocker said:
I expected a successful algo trader to be an automatic successful discretionary trader . I guess I am assuming skills for algotrading necessarily means a deeper understanding of the markets and profits would be easy. What are you trading?
More...

Many if not most of us are algo trading because we have emotions that can be distracting. Beside that, algo trading means you can have 200 positions opening and closing at once while you're sitting on the balcony while sipping coffee and staring into nothingness.
Yet, I believe 'mastering' your emotions too much will have a negative impact in other aspects of your life.
My insignificant discretionary trading experiments have had mediocre to poor results.
 
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