2012: The Battle for Survival

illiquid · Apr 7, 2012

Quote from neke:

I still have my regular job (glad I do ). My work revolves mostly around the computer, so yes I frequently check on the market (switch windows!). I have automated stops on most of my positions these days too, and I have opportunities to close them before close of market if not stopped out. RHT? I am glad my system recognised my short as disallowed strategy and closed it out immediately (shorted 55.20 closed out 5 seconds later at 55.38) or I could have mourned that trade.

So any reason why you trade intraday only? If you don't have time to focus on the very short-term, why not choose a time-frame where not looking at every tick actually serves as an advantage? If you can't read the tape there is really no point for u to daytrade. Period.

neke · Apr 13, 2012

Weekly Update for week 13/50 ended 4/13/2012

Horrible week, down 13K (7.2). Confidence at new lows, and outlook looks grim. Market sell-off on Tue left me seriously wounded, as a bunch of call options were sent reeling.

I 've been too fast to increase number of allowed discretionary trades following a few weeks of gains. That has cost me for two weeks now (week before last, and this one) because it is permitting pseudo-averaging (increasing market directional exposure on different stocks).

Now there is all the urgency to get everything automated, including options. One of the reasons for keeping my discretionary trades on was because of options. I have been fearful of automating that, for fear of a bug causing massive loss on a position (think of buying an OTM option near expiration bid 0.01 ask 0.05 by mistake with all my buying power. That would be catastrophic). However I 've got to the point of being comfortable enough to put in enough checks to ensure nothing like that ever happens. Trusting my discretion has turned into emotional thing instead of the sound logic that is supposed to be in play. I just have to define every strategy now precisely, that way performance could be measurable.

Going forward I will cease initiation of discretionary positions for the day if at any time the account is in the red by a certain amount (set currently at $2K): that restriction would hold for the rest of that day. Position sizes are being slashed now for the remainder of the month. The model I will be putting in place will call for a target profit for a month. If that target is realised by the end of the month, then position sizes will be incremented and a new target set for the following month. If the target is not met, the sizes will remain small (or even adjusted smaller) for the following month with another target.I will have to enforce the discipline to stick with the same fractional size for the entire month.

For the remainder of April, the max. size per option position will be 3% (of account). Target P/L for the period will be a modest 6K.

Code:

Opening Balance:                	176,552
Net loss for the week 		        (12,741)
------------------------------------------------
Net Balance:                   		163,811


Since Inception of Thread   01/18/2012 - 04/13/2012

Opening Balance:                   	203,729
Net loss 			        (22,918)(Down 11.2%)
Cash Withdrawal				(17,000)
------------------------------------------------
Net Balance				163,811

kubek · Apr 13, 2012

you should lower your stakes immediately until you recover your confidence and consistency

jys78 · Apr 13, 2012

I've heard that, more than any other quality, persistence is what separates the winners from the losers. You clearly have that.

But your goals man! After this huge, devastating drawdown you are adjusting to a "modest" goal which actually works out to 6.5% per month return?

Best of luck to you!

HurricaneUS · Apr 13, 2012

Code:
Quote from neke:

Weekly Update for week 13/50 ended 4/13/2012

Horrible week, down 13K (7.2). Confidence at new lows, and outlook looks grim. Market sell-off on Tue left me seriously wounded, as a bunch of call options were sent reeling.

I 've been too fast to increase number of allowed discretionary trades following a few weeks of gains. That has cost me for two weeks now (week before last, and this one) because it is permitting pseudo-averaging (increasing market directional exposure on different stocks).

Now there is all the urgency to get everything automated, including options. One of the reasons for keeping my discretionary trades on was because of options. I have been fearful of automating that, for fear of a bug causing massive loss on a position (think of buying an OTM option near expiration bid 0.01 ask 0.05 by mistake with all my buying power. That would be catastrophic). However I 've got to the point of being comfortable enough to put in enough checks to ensure nothing like that ever happens. Trusting my discretion has turned into emotional thing instead of the sound logic that is supposed to be in play. I just have to define every strategy now precisely, that way performance could be measurable.

Going forward I will cease initiation of discretionary positions for the day if at any time the account is in the red by a certain amount (set currently at $2K): that restriction would hold for the rest of that day. Position sizes are being slashed now for the remainder of the month. The model I will be putting in place will call for a target profit for a month. If that target is realised by the end of the month, then position sizes will be incremented and a new target set for the following month. If the target is not met, the sizes will remain small (or even adjusted smaller) for the following month with another target.I will have to enforce the discipline to stick with the same fractional size for the entire month.

For the remainder of April, the max. size per option position will be 3% (of account). Target P/L for the period will be a modest 6K.

Code:

Opening Balance: 176,552 Net loss for the week (12,741) ------------------------------------------------ Net Balance: 163,811 Since Inception of Thread 01/18/2012 - 04/13/2012 Opening Balance: 203,729 Net loss (22,918)(Down 11.2%) Cash Withdrawal (17,000) ------------------------------------------------ Net Balance 163,811

consider another line of work.....SERIOUSLY.....before you're left with nothing........

take whatever cash you have left and start a Subway or two.....

nkhoi · Apr 13, 2012

Quote from HurricaneUS:

consider another line of work.....SERIOUSLY.....before you're left with nothing........

take whatever cash you have left and start a Subway or two.....

To whom it may concern:

I have been a 15 plus year Subway operator. I have been Franchisee of the Year for my territory. I have been a representative on both the local and national advertising fund board of directors.

I can tell you thisâ¦I would not own a Subway if I had to touch it with a 10 foot poll.
http://www.coachmorse.com/364/advice-for-subway-start-up-from-the-profit-coach/

neke · Apr 13, 2012

Quote from jys78:

But your goals man! After this huge, devastating drawdown you are adjusting to a "modest" goal which actually works out to 6.5% per month return?

Yes, for someone involved with active stocks, the next two/three weeks is the heart of earnings season, and it is not difficult to find opportinities to trade. I think 6K for the next 2/3 weeks is realistic on the reduced size (It's not like taking 162K to $2million by year end

). If I can't make that, that would suggest I stay small or even smaller.

glassinc · Apr 13, 2012

This is the way Neke wants it, so nothings changed here and no surprise.

Neke you say you want to look at this as an isolated incident and not the norm. Yet it is the norm and not an isolated incident, therefore the continued drawdown.

You are not addressing the issues that have you in this repetitive loop of a couple to a few weeks of gains, that are negated by a week or two of losses. This is now in the 1st qtr of the 3rd year! Open your mind and examine the thoughts, beliefs, and values that are defining your results.

The best predictor of the future is past behavior. Since you're not changing your behavior, expect more of the same results of the recent past.

None of us can solve our problems with the same mind that created them, which is what you're trying to do.

glassinc · Apr 13, 2012

Quote from Millionaire:

Neke's weekly P&L so far for 2012:

Week 1: (14,450)
Week 2: 8,860
Week 3: (3,770)
Week 4: 2,303
Week 5: 7,631
Week 6: (14,717)
Week 7: 5,132
Week 8: 9,163
Week 9: 14,371
Week 10: (4,817)
Week 11: (19,458)
Week 12: 150

Good to see more winning weeks than losing ones.

We need to see more 14K+ winning weeks too.

The greater frequency of winners vs. losers doesn't matter. What matters is that avg winning trades is larger than your avg losing trades, creating positive expectancy.

From your table above avg winning week is 6801.43 vs avg losing losing week of 11442.40. There isn't a positive expectancy anywhere close here. Would you be willing to trade a system like this? One could do a coin flip with random entry, and using proper position sizing with a volatility stop obtain better results.

tenthousandmen · Apr 13, 2012

Quote from glassinc:

The greater frequency of winners vs. losers doesn't matter. What matters is that avg winning trades is larger than your avg losing trades, creating positive expectancy.

From your table above avg winning week is 6801.43 vs avg losing losing week of 11442.40. There isn't a positive expectancy anywhere close here. Would you be willing to trade a system like this? One could do a coin flip with random entry, and using proper position sizing with a volatility stop obtain better results.

Great words