2014: The Battle for Survival
- Thread starter neke
- Start date
The major reason for my lacklustre performance last year had been the habit of doubling down into losers. This was also a problem even before last year, but my analysis of performance for last year brought it to the fore. It always ensured that my biggest sizes were in low quality trades. This year I am making a commitment to do the opposite. To have my biggest sizes on when the conviction is highest. The main obstacle had been how to objectively classify the trades (at the time of entry) into low
conviction (LC), medium conviction (MC) and high conviction (HC) trades. Allowing my emotion to determine that would be calamitous to my account.
Lately though I have put out a number of objective criteria which would make it possible for my system to analysis my trades and know whether they qualify for MC or HC designation. The biggest leverage will be permitted for the HC trades. As my account balance increases, so will the (percentage) size allowable for these trades. At the end of the year, I would be delighted if my LC trades just break-even after costs. My gain should come from the MC and HC trades, and allowable leverage will be determined as follows for option trades based on existing balance on account (starting the year wit 203K). If the balance goes below 180K I will become ultra-defensive and avoid all LC trades. Accelerate when balance rises, and decelerate when it falls.
(so yes, if the balance ever hits 624K this year, high conviction option trades can be made with 40% of my account!)
HC trades will be rare, and there can only be one HC trade active at a time. I would be delighted if I have these number of trades for the year
conviction (LC), medium conviction (MC) and high conviction (HC) trades. Allowing my emotion to determine that would be calamitous to my account.
Lately though I have put out a number of objective criteria which would make it possible for my system to analysis my trades and know whether they qualify for MC or HC designation. The biggest leverage will be permitted for the HC trades. As my account balance increases, so will the (percentage) size allowable for these trades. At the end of the year, I would be delighted if my LC trades just break-even after costs. My gain should come from the MC and HC trades, and allowable leverage will be determined as follows for option trades based on existing balance on account (starting the year wit 203K). If the balance goes below 180K I will become ultra-defensive and avoid all LC trades. Accelerate when balance rises, and decelerate when it falls.
Code:
2016 HC MinBal and Allowable Fraction of Account for Option Trades
-------------------------------------------------------------------
Minimum Bal HC MC LC
<180 0.02 0.02 -
180 0.04 0.02 0.01
196 0.08 0.04 0.01
223 0.12 0.06 0.02
273 0.18 0.08 0.02
374 0.27 0.10 0.03
624 0.40 0.12 0.03HC trades will be rare, and there can only be one HC trade active at a time. I would be delighted if I have these number of trades for the year
Code:
HC MC LC
No of Trades 10 70 200
Period Update for February (01/30/2016 - 03/05/2016) (5 weeks)
Great month, up 57K (26%).
A lot of opportunities in the first couple of weeks with the increased volatility. Preserved all of that thru the month. It was a transitional month in terms of restricting size to only qualifying MC+HC trades. Spent some time coding my system to recognise the permissible trades (I haven't designated any trade HC yet). My acceleration/deceleration formula means I am not yet operating the options at significant size - else the gains would have been much more.
I am quite optimistic for the future with the direction being taken. Took out 10K for Jan/Feb.
Great month, up 57K (26%).
A lot of opportunities in the first couple of weeks with the increased volatility. Preserved all of that thru the month. It was a transitional month in terms of restricting size to only qualifying MC+HC trades. Spent some time coding my system to recognise the permissible trades (I haven't designated any trade HC yet). My acceleration/deceleration formula means I am not yet operating the options at significant size - else the gains would have been much more.
I am quite optimistic for the future with the direction being taken. Took out 10K for Jan/Feb.
Code:
--------------------------------------------------------------------------------
Opening Balance: 214,910
Net gain for period 56,540
Cash Withdrawal (10,000)
------------------------------------------------
Net Balance: 261,450
For the Thread Year 2016 (1/1/2016 - 3/5/2016)
Opening Balance: 203,449
Net gain 68,001 (Up 33%)
Cash Withdrawal (10,000)
------------------------------------------------
Net Balance 261,450
----------------------
TRADES
TYPE Exit Date/Time P/L
STOCK 2016-02-01-15-49-14 -801.3
STOCK 2016-02-02-09-49-33 3397.1
OPTION 2016-02-02-11-46-17 5970.7
OPTION 2016-02-02-15-47-33 -3082.3
STOCK 2016-02-02-15-48-24 -889.9
STOCK 2016-02-02-14-35-25 1195.2
OPTION 2016-02-03-10-06-17 2972.1
STOCK 2016-02-03-15-02-49 -380.2
STOCK 2016-02-03-09-41-51 635.8
OPTION 2016-02-03-12-31-50 -10497.4
OPTION 2016-02-03-15-50-00 -3388.7
OPTION 2016-02-03-14-59-15 10756.4
OPTION 2016-02-04-14-42-45 8356.2
STOCK 2016-02-04-15-55-08 -5722.4
STOCK 2016-02-04-13-29-09 2001.2
OPTION 2016-02-04-14-48-19 8818
STOCK 2016-02-05-10-32-05 8984.8
STOCK 2016-02-05-10-31-16 2171.9
STOCK 2016-02-05-10-31-30 552.6
OPTION 2016-02-05-11-00-20 -13105.9
OPTION 2016-02-05-11-25-49 -6281.5
STOCK 2016-02-05-11-27-27 -2940
OPTION 2016-02-05-11-26-15 -6581.6
OPTION 2016-02-05-11-26-25 -5565
OPTION 2016-02-08-15-51-44 2979.2
OPTION 2016-02-08-15-42-08 4608.3
OPTION 2016-02-08-15-54-13 165.1
OPTION 2016-02-08-15-47-45 -4255.1
STOCK 2016-02-08-15-56-28 -1704.1
STOCK 2016-02-08-15-52-24 872.6
OPTION 2016-02-08-15-55-16 2977.6
OPTION 2016-02-08-15-53-19 1027.8
OPTION 2016-02-09-15-51-58 10277.1
OPTION 2016-02-09-15-53-06 805.6
OPTION 2016-02-09-15-12-17 9373.3
STOCK 2016-02-09-15-12-39 2766.3
STOCK 2016-02-09-15-49-08 176.9
OPTION 2016-02-09-15-57-12 1481.7
STOCK 2016-02-10-12-25-03 -455.7
OPTION 2016-02-10-12-57-06 -4067.8
OPTION 2016-02-11-10-23-24 11084
OPTION 2016-02-11-12-23-50 731.8
STOCK 2016-02-12-09-45-03 2243.4
OPTION 2016-02-12-09-58-56 7291.2
OPTION 2016-02-16-11-42-45 -3954.7
OPTION 2016-02-17-13-29-03 -4025.1
STOCK 2016-02-18-10-59-59 -6
STOCK 2016-02-18-10-54-01 1952.5
OPTION 2016-02-18-11-19-07 134.1
OPTION 2016-02-18-10-54-22 14870.3
STOCK 2016-02-19-09-38-39 3804.6
STOCK 2016-02-19-13-35-39 7865.8
STOCK 2016-02-23-12-20-45 -3228.6
STOCK 2016-02-23-10-26-28 -1952.6
OPTION 2016-02-23-10-25-41 -9722.3
OPTION 2016-02-23-10-28-56 -4041.4
STOCK 2016-02-24-12-00-17 4258.3
STOCK 2016-02-24-15-57-46 1069.7
STOCK 2016-02-24-15-33-45 -9051.1
STOCK 2016-02-25-10-53-28 3311.6
STOCK 2016-02-25-11-52-04 -6976.6
OPTION 2016-02-25-11-34-52 -295.9
STOCK 2016-02-25-11-52-10 5901.7
STOCK 2016-02-26-09-52-04 538.7
STOCK 2016-02-26-13-38-47 1841.4
STOCK 2016-02-29-11-17-04 2077
STOCK 2016-03-01-11-08-26 -1969.1
OPTION 2016-03-01-11-08-02 -5729.2
STOCK 2016-03-01-15-55-15 4458.5
STOCK 2016-03-01-15-09-42 3846
STOCK 2016-03-02-13-48-29 1996.5
STOCK 2016-03-02-10-01-08 1514.9
STOCK 2016-03-03-11-40-01 -800
STOCK 2016-03-03-10-34-58 220.5
OPTION 2016-03-03-11-45-40 1190.6
STOCK 2016-03-04-09-44-58 2482.6.
Hopefully you get your trading under control
Never deviate from the trading plan
and achieve great success.
you deserve it.
.
I did ask neke a while ago how he trades (method/strategy) Not the full details, just an overview. He never responded one way or the other. It's gracious of him to show his PnL, which serves as an inspiration for us ordinary retail traders, but that's all - inspiration (that it can be done - trade profitably in this game). However, that's where it ends really (inspiration and dreams), and we won't ever be able to emulate his 'success' if we haven't a flipping clue how he trades. In fact, knowing how you trade is far more important and useful than showing us your PnL. Your PnL is what you show us and we just have to accept it without any verification, but showing us your method, one can practice/paper trade this and determine for oneself whether it works or not.
You are asking for too much. Privacy is important nowadays.
A system is something very individually, especially when it was developed by himself.
Developing & testing (& possibly also automating) a successful system takes a long time.
I too wouldn't make available the inner workings of my own system, because that is the only "edge" one has.
If it is known to many others then soon it wouldn't work anymore for me...
That's the same when a company hides its business and technological secrets against competitors... much like CocaCola does with their formula for their soft drink for now more than 100 years... ;-)
And you have to see and treat trading as a serious business.
Simple logic...
Be happy with the results he kindly shares, and do your own research and develop your own system...
from wiki:
"Physical security of the secret recipe
After Dr. John S. Pemberton invented Coca-Cola in 1886, the formula was kept a close secret, only shared with a small group and not written down. In 1891, Asa Candler became the sole proprietor of Coca-Cola after purchasing the rights to the business. Then, in 1919, Ernest Woodruff and a group of investors purchased the Company from Candler and his family. To finance the purchase Woodruff arranged a loan and as collateral he provided documentation of the formula by asking Candler's son to commit the formula to paper. This was placed in a vault in the Guaranty Bank in New York until the loan was repaid in 1925. At that point, Woodruff reclaimed the secret formula and returned it to Atlanta and placed it in the Trust Company Bank, now SunTrust Bank, where it remained through 2011.[29] On December 8, 2011, the Coca-Cola Company moved the secret formula to a purpose built vault in a permanent interactive exhibit at the World of Coca-Cola in Atlanta.[30]
"
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Kind of offtopic, so I will be quick:
Complete bullshit as an analogy, because:
1. To believe that a recipe only exist in a vault is just plain silly. How the fuck do they make the coke without knowing the recipe?
2. With analyzers anyone can know what is in the recipe, you just have to have an expensive machine.
3. In specially this case, the recipe was stolen, so so much about security:
http://www.foxnews.com/story/2006/07/06/pepsi-alerted-coca-cola-to-stolen-coke-secrets-offer.html
As I said, complete BS analogy. Sorry for the interuption...
Complete bullshit as an analogy, because:
1. To believe that a recipe only exist in a vault is just plain silly. How the fuck do they make the coke without knowing the recipe?
2. With analyzers anyone can know what is in the recipe, you just have to have an expensive machine.
3. In specially this case, the recipe was stolen, so so much about security:
http://www.foxnews.com/story/2006/07/06/pepsi-alerted-coca-cola-to-stolen-coke-secrets-offer.html
As I said, complete BS analogy. Sorry for the interuption...