2012: The Battle for Survival

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Weekly Update for week 26/50 ended 7/6/2012


Bad week, down 4K (3%). Had a steady week, but the walls cracked on Friday, with my bearish positions killed. Hope earnings season brings some relief.



Code: 
Opening Balance:                	128,494
Net loss for the week 		         (3,985)
------------------------------------------------
Net Balance:                   		124,509


Since Inception of Thread   01/18/2012 - 07/13/2012

Opening Balance:                   	203,729
Net loss 			        (47,220)(Down 23%)
Cash Withdrawal				(32,000)
------------------------------------------------
Net Balance				124,509

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Quote from neke:




Bad week, down 4K (3%). Had a steady week, but the walls cracked on Friday, with my bearish positions killed.
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It's interesting that you named your thread in such a way that predicted your demise. Your spidey senses may have already known that you were going to struggle.

:(
 
Neke is down about 40% since the beginning of the year. Earlier I said he would blow out his account early next summer. At his current rate it will be earlier-this February March.

7 more months.

:(
 
I haven't gone through the thread to try to figure out his trades . . . does anyone know what kind of trades he takes? I'm guessing lots of shorting tops and buying bottoms. RTM has destroyed many accounts.
 
I notice a number of posts curious about the details of Neke's trades.

Presumably, people are wanting to put on the opposite?
 
Quote from jys78:
Presumably, people are wanting to put on the opposite? [/B]
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Neke is an intra day trader, dont think he ever holds overnight so most of his trades will be very old by the weekend.
 
People are asking to know his trades so they can understand what he is doing better to actually help him. Only so much advice you can give without actually knowing what he is specifically doing, though I doubt the advice would be taken. To me it seems Neke is a serial fader of strong trending moves, which has seriously hurt his account many times. Friday did suck as the up move happened very fast at the opening and then just continued to stay up there; however, if the position wasn't opened up before Friday, there was no reason to short the market heavy. What seems to happen is he fades the market and then adds for a better average position and then pukes it if there is too much pain. Of course this doesn't always happen but is a noticeable pattern of his. This isn't a normal drawdown. I can't believe he has much if any confidence left. Go back to the sim and re-work your strategy until you are confident with your trading. Sometimes no trading is better than trading if you are just consistently losing. I also don't believe anyone wants Neke to fail. He is just being very stubborn, and it is showing with the continuous account decreases.
 
This from 2/26/11:

http://www.elitetrader.com/vb/showthread.php?threadid=213286&perpage=6&pagenumber=12

"Was caught long in the market on Tues sell-off. Lost 15K. Then came Wed, and as the early morning weakness came, scooped up a number of names: NFLX CMG BIDU etc in stock and options, expecting a rebound, but was waaaaay too early. Witnessed as one stock after another kept collapsing, and at one point was down more than 45K on the day. Got a little bit of a reprieve later in the day, cutting the loss to about 20K. Thurs saw some modest gains of about 12K which was thrown away on Fri on CRM call.

Will be working on refining the oversold strategy that was employed on Wed. Part of this will be determining the formula for increasing size (via other long positions) in the face of such general melt-down. Size is being cut as I undertake further investigation/changes."

Oversold strategy ie picking bottoms and doubling down. Unless you're Rafael Nadal, picking bottoms is a bad idea. IMO
 
Quote from JustDoingIt:

I used to love reading Neke's journal because it was raw, honest, and lacked a lot of the BS that so many journals have on ET. Neke reminded me of myself early in my trading career...self-financed, working stiff with a very good life and career compared to more than 95% of the world's population yet still missing that one thing that would complete you. Seeking to get out of the rat race, ditch the cubicle, shed the suit and tie, and provide for your family in the comfort and freedom of your tee shirt and boxers. Then you wake up and realize that it is all bullshit really. This is a business...serious business and you better treat it like that, and you better make sure that everyone else that is around you treats it like it is serious business.
Neke's meteoric success is the exact cause of his current malaise. He has been conditioned to treat trading as a game and the account balance has merely been a tally of the high score. Too many cliche's and trading adages have been at work in Neke's trading to allow him to adapt and overcome the changing tides of the market.
1. Plan the trade and trade the plan. But what if the plan is no damn good?
2. Stick with the plan even when suffering a serious drawdown. But what if the plan is no damn good?
3. Focus on the plan...not the money. But what if the plan is no damn good? The money is the only thing that keeps you in the trading game. It is your life blood. When the trading capital is gone...your trading life ends.
Neke has failed to properly discern luck from skill. Neke still hasn't realized that he is a reversion to the mean trader. Neke has failed to realize that trading with 500k is a lot different than trading with 50k and thus the strategies and risk should also be different. With 500k he should have graduated to writing credit spreads, doing straddles, condors, etc. I have a saying "Small accounts seek volatility; large accounts seek predictability".
I told Neke over a year ago that he was playing a very serious game. Neke is an engineer and I know how much or shall we say how little most engineers make per year even those from top schools only make around 100k/yr. Now he has been making monthly withdrawals to help maintain his current standard of living all while suffering a hellacious multi-year drawdown. This is the type of thing that destroys marriages, families, and causes guys to take a swan dive off of the highest building in their city. This is real life Neke not a computer game. Take time and seek advice and let a trader you trust review your trades. Many of the trades you used to post had absolutely no apparent rhyme or reason to them other than they had gone too far in their current direction so you were going to go short or long and wait on the "inevitable" correction/reversion. If they kept running then you'd add to the loser and keep adding until the pain got too great to bear. Oh and then you'd lament how the market eventually turned and you would have made tons of cash if you had just held on a little longer. It's not all doom and gloom though Neke. You still have a sizable account balance for someone with a viable trading plan and proper risk management skills. Stop trading, withdraw all but about 50k, learn a few viable strategies, develop solid risk management, and share your trades with someone(your wife is a good start). I wish you much success Neke but you have developed too many enablers and cheerleaders here on ET.
P.S. automation is overrated. Automation isn't made to replace discretionary trading only enhance it. Computers can only trade the plan that it is programmed to trade. But what if the plan is no good?
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Great post - you wrote it for Neke but it could be for me, Thanks!
 
Code: 
	From		To		StartingBalance			Net P&L		Return%		Net Cash Movement	Closing Balance
	===========	===========	===============		===============		=======		=================	==============
	Nov 2004	Dec 2004	          5,300			  8,700		    164			    1,000		 15,000
	Jan 2005	Dec 2005		 15,000			132,000		    880			  (12,000)		135,000
	Jan 2006	Feb 28 2007		135,000			115,000		     85		 	 (174,000)		 76,000
	Feb 28 2007	Jan 12 2008		 76,000		        138,000		    182			 (111,000)		103,000
	Jan 12 2008	Jan 11 2009		103,000			377,000		    366         	 (160,000)		320,000	    
	Jan 11 2009	Jan 10 2010		320,000			210,000		     65			 (120,000)		410,000
	Jan 10 2010	Jan  9 2011		410,000		        (44,000)	    (11)		  (30,000)		336,000
	Jan 10 2011	Jan 17 2012		336,000		       (121,271)	    (36)		  (11,000)		203,729

[/B]
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FALSE
 
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