2012: The Battle for Survival

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Quote from neke:

Yes, still trading, although like you already know, the balance is still well below $100K. Will give a mid-year update at the end of June (unless of course the balance comes above 100K in which case it will happen sooner).
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What I've learnt from Neke's trading is how important money management is.

Most of the gain/loss comes from a few large moves. Those 15% or more big days are the real business.

When we make a trade or take a view, if we have edge, say, 60% right, it does not mean we'll make $$. A bad money management on even 5% of the days can kill the book.

On the other hand, if we do have an edge, say 50% chance right. But if we still have good money management, we can still make a winner on the large good days.

To me, it appears it is much easier to trade a large book than a very small book. If my target is $1k a day with a $10k account, I'll have to try to make 10%. This is hard and it can blow up the book easily.

But Neke had a large book of $400k. He can live a comfortable life with only a 1% (or $4k) gain everyday. With such a big book, he can support 40 CL contracts. But he only needs to keep a position of 4 contracts to achieve his $4k target. 4 contract position is small to his book.

Whatever his case is, it seems he likes to take risk and add to his positions and then out of control. And he got hurt with a few large moves. You do not need many 15% losses to ruin the book.

Wish Neke's good luck and get back to $100k. He should learn something. He has been doing this for several years.
 
Quote from neke:

Yes, still trading, although like you already know, the balance is still well below $100K. Will give a mid-year update at the end of June (unless of course the balance comes above 100K in which case it will happen sooner).
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Neke,

Thanks for continuing to update us. I know it is tough, but could you consider an update sooner then that - it's hard to wait that long! :)

It doesn't sound too good though that you mention that account is well under $100K, but that could mean different amounts to different people.

JJacksET4
 
Good luck Neke. I'm still rooting for you to make a comeback.

It is really tough to trade and withdraw money out every month to support the family. Big thumbs up to you.

Money comes and goes. At least you spent the money on your kids.
 
Its not money management, it's control of one's emotions. I have seen him not want to take a loss on an option trade during expiration and then go all in with massive option selling on huge margin.

Quote from RedSun:

What I've learnt from Neke's trading is how important money management is.

Most of the gain/loss comes from a few large moves. Those 15% or more big days are the real business.

When we make a trade or take a view, if we have edge, say, 60% right, it does not mean we'll make $$. A bad money management on even 5% of the days can kill the book.

On the other hand, if we do have an edge, say 50% chance right. But if we still have good money management, we can still make a winner on the large good days.

To me, it appears it is much easier to trade a large book than a very small book. If my target is $1k a day with a $10k account, I'll have to try to make 10%. This is hard and it can blow up the book easily.

But Neke had a large book of $400k. He can live a comfortable life with only a 1% (or $4k) gain everyday. With such a big book, he can support 40 CL contracts. But he only needs to keep a position of 4 contracts to achieve his $4k target. 4 contract position is small to his book.

Whatever his case is, it seems he likes to take risk and add to his positions and then out of control. And he got hurt with a few large moves. You do not need many 15% losses to ruin the book.

Wish Neke's good luck and get back to $100k. He should learn something. He has been doing this for several years.
More...
 
As promised, I am here to make an update for the mid-year (Jan-Jun 2013). First though, a recap of the final weeks of last year during which my account went below the 100K line. The entries were kept in my personal journal but not posted here.
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Weekly Update for weeks 48,49,50/50 ended 12/29/2012

Fell into the trap of compulsive fading on size once again, this time on RIMM on 12/12 and 12/13, costing 12K. I really need to put into consideration market bias before making fading decisions. I 've fought the bull market too much, and paid too little attention to going with the overall market bias.

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Opening Balance:                	101,425
Net loss for period 		         12,390
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Net Balance:                   		 89,035


Since Inception of Thread   01/18/2012 - 12/29/2012

Opening Balance:                   	203,729
Net loss 			        (59,694)(Down 29%)
Cash Withdrawal				(55,000)
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Net Balance				89,035
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Weekly Update for Extra Week ended 1/6/2013

Slow week, just accounting for the week that span 2012 and 2013.

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Opening Balance:                	 89,035
Net loss for period 		         (1,879)
Cash Withdrawal				 (4,000)
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Net Balance:                   		 83,156


Since Inception of Thread   01/18/2012 - 1/6/2013

Opening Balance:                   	203,729
Net loss 			        (61,573)(Down 30%)
Cash Withdrawal				(59,000)
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Net Balance				83,156
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Summary Update Weeks 1 - 25 2013 (1/6/2013 - 6/29/2013)

Still treading below the surface, but still alive and trading. For the 25 week period, account up 21K (26%).

After a thorough review of where I have come from in the market over the last 10 years, and the tendency for the market to get more efficient, and arb out long-running inefficiencies, while continuing to do havoc with my emotions on a daily basis, I decided the best course of action going forward was a man/machine partnership between myself and my system. I am the day-to-day trading strategist/tactician, while my computer is the trader, monitoring quotes, placing orders for entry and exits. I define the rules for the trading after hours and pre-market (before the market opens): the decision is made on which strategies are allowed for the day (based on analysis of existing market conditions), what stocks are worth watching for certain actions, and what the parameter values should be. After that I have no further role - I am not allowed to vary it intraday. My system does the rest, including position sizing individually and correlated, exit rules, etc. Of course I know I miss out on real-time decision making during market hours which could be beneficial, but I think the tendency to fall to bias and emotion in the heat of the day is more negative than what I am missing by not being involved. It is a work that is still ongoing, and I still fall foul now and then and quickly get back on the narrow path afterwards, but already I think it is the right direction. After so many years, it is time to leave the adrenaline rush of intraday hysteria to younger kids and the algos. All of a sudden I am devoting more time to the important strategic trading decisions, and more time for my regular job, and less time sitting by the computer during market hours.

At the start of the year, I discussed with my wife the need to cut down on our cash withdrawal if there is to be any hope of sustaining the withdrawals. She agreed and we lowered the monthly withdrawal to about $2,500. Yes a lot of adjustments had to be made, but I am glad we didn't have to pull our kids from private school. Will step up the withdrawals if the needed stabilization/improvement happens, and there is a clear path to recovery. At the end of the year I wish to be able to say I made so much with manageable drawdown, and see whether it could set a benchmark going forward. Then I could talk of the capital needed to sustain a good trading income.

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Opening Balance:                	 83,156
Net gain for period and year	         21,442		(Up 26%)
Cash Withdrawal				(11,900)
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Net Balance:                   		92,698
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Neke I know you take comission costs into consideration in showing net gain but have you totaled the cost of comission and compared what you are paying with what it would cost at IB?
 
Quote from RichardRimes:

Neke I know you take comission costs into consideration in showing net gain but have you totaled the cost of comission and compared what you are paying with what it would cost at IB?
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Neke, I also think IB would be alot cheaper for you...unless TD gave you some really good savings based on your volume
 
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