Thanks. I am not sure your observation is right. This year (up to the last report), I am up 76K on options and 52K on stock. That is right about the correct balance. I mentioned options in my acceleration model because I am going to size up %wise as balance grows with options and speed up account growth. I am not going to do the same increase on stock, because of its different risk profile.
2014: The Battle for Survival
- Thread starter neke
- Start date
Neke,
If something like Black Monday (10/19/1987) happens again, your long option positions will be wiped out. Could your current stock/option trade allocation withstand such a shock? Would you be able to recover from such event?
By the way, before I retired from my day job, I had worked full-time as a computer scientist while trading stocks every day for 20 years. Hence, I view you as a brother-in-arms, and admire your success.
I started with a few thousand dollars in the 80's and currently trade several million dollars in a dozen accounts. Few small traders conquer the scale up problem. I am still struggling with it today.
If something like Black Monday (10/19/1987) happens again, your long option positions will be wiped out. Could your current stock/option trade allocation withstand such a shock? Would you be able to recover from such event?
By the way, before I retired from my day job, I had worked full-time as a computer scientist while trading stocks every day for 20 years. Hence, I view you as a brother-in-arms, and admire your success.
I started with a few thousand dollars in the 80's and currently trade several million dollars in a dozen accounts. Few small traders conquer the scale up problem. I am still struggling with it today.
Good to hear your story. Pretty inspiring.
I am still refining the rules on my acceleration model. The initial assumption, if you check the levels and sizes, is that a 100% loss on an option position is possible, but that should set my account back by just one level. That assumes of course that the trades are consecutive, and preferably initiated on different days ( I am finding out to my chagrin that decision could be biased on a given day - I need the calmness of overnight to re-adjust). Unfortunately trades are not always consecutive, and I am having to deal with the risk of multiple position exposure.
Period Update for May (04/30/2016 - 06/04/2016) (5 weeks)
Awful month, down 95k (29.6%). Gave back everything made last month.
Stunning descent from the lofty heights attained last month. The flaw with my acceleration/deceleration model is just laid bare. Last month ramped up from 4% to 11% on option trades by end of month. Then began the sequence of losing trades on that high leverage. May 5th was the biggest losing day. It didn't get better the rest of the month. Leverage is back to 4% for option trades as I rework the rules.
Took out 20k from prior month's gains - before the losses for the month set in.
Awful month, down 95k (29.6%). Gave back everything made last month.
Stunning descent from the lofty heights attained last month. The flaw with my acceleration/deceleration model is just laid bare. Last month ramped up from 4% to 11% on option trades by end of month. Then began the sequence of losing trades on that high leverage. May 5th was the biggest losing day. It didn't get better the rest of the month. Leverage is back to 4% for option trades as I rework the rules.
Took out 20k from prior month's gains - before the losses for the month set in.
Code:
--------------------------------------------------------------------------------
Opening Balance: 318,953
Net loss for period (94,542)
Cash Withdrawal (20,000)
------------------------------------------------
Net Balance: 204,411
For the Thread Year 2016 (1/1/2016 - 6/04/2016)
Opening Balance: 203,449
Net gain 30,962 (Up 15%)
Cash Withdrawal (30,000)
------------------------------------------------
Net Balance 204,411
----------------------
TRADES
TYPE Exit Date/Time P/L
STOCK 2016-05-02-12-29-47 -3142.6
STOCK 2016-05-02-11-05-39 -2148.1
OPTION 2016-05-02-12-28-53 -3081.7
STOCK 2016-05-02-15-30-49 4438.3
OPTION 2016-05-02-15-03-33 4282.5
STOCK 2016-05-02-15-49-36 -1296.6
STOCK 2016-05-03-15-55-19 -526.6
OPTION 2016-05-03-15-45-15 -5923.1
STOCK 2016-05-03-11-06-36 1565
STOCK 2016-05-03-15-55-20 -2453.5
OPTION 2016-05-03-15-48-42 478.7
STOCK 2016-05-03-13-39-53 -4383.4
STOCK 2016-05-03-15-49-39 -4355.5
STOCK 2016-05-04-15-48-23 -6057.4
OPTION 2016-05-04-15-44-30 16011.7
STOCK 2016-05-05-10-03-57 -1385.3
OPTION 2016-05-05-10-45-15 -25528
STOCK 2016-05-05-15-23-23 -9474
OPTION 2016-05-05-10-03-33 161.1
OPTION 2016-05-05-15-24-33 -31401.1
STOCK 2016-05-06-09-39-09 2311.2
STOCK 2016-05-06-10-15-46 1638.6
OPTION 2016-05-06-13-56-02 5160.7
STOCK 2016-05-09-09-52-00 2239.8
OPTION 2016-05-09-10-04-51 3727.4
OPTION 2016-05-09-09-37-35 -5668.3
STOCK 2016-05-09-15-06-59 -21301.6
STOCK 2016-05-10-09-39-29 -817
OPTION 2016-05-10-10-35-35 -1034.9
OPTION 2016-05-10-13-40-31 570.3
STOCK 2016-05-10-15-35-43 317.7
OPTION 2016-05-10-15-34-07 2088.6
STOCK 2016-05-11-09-53-25 -73
STOCK 2016-05-11-10-22-12 4679
OPTION 2016-05-11-10-11-56 -3034.1
OPTION 2016-05-11-10-21-24 7263.9
OPTION 2016-05-11-15-50-00 -58.7
STOCK 2016-05-11-15-49-19 329.8
STOCK 2016-05-12-15-33-11 1859.1
STOCK 2016-05-12-09-33-42 -1200.7
STOCK 2016-05-12-10-06-14 -2468.3
STOCK 2016-05-12-10-37-27 582.8
STOCK 2016-05-12-15-36-21 -611.3
OPTION 2016-05-12-15-48-44 644.7
STOCK 2016-05-12-15-52-16 619.1
STOCK 2016-05-12-10-35-56 223.4
STOCK 2016-05-13-11-24-34 -11563.9
OPTION 2016-05-13-11-35-23 -5648
STOCK 2016-05-16-10-40-58 2111.9
OPTION 2016-05-16-11-01-53 3989.1
STOCK 2016-05-17-15-01-12 -2919.5
STOCK 2016-05-18-09-43-31 824.8
OPTION 2016-05-18-10-24-21 1411.4
OPTION 2016-05-18-09-35-14 37.9
STOCK 2016-05-19-10-13-56 -5045.4
OPTION 2016-05-19-15-36-37 -74.9
OPTION 2016-05-19-10-16-08 -8081.3
STOCK 2016-05-20-10-38-49 2237.3
STOCK 2016-05-20-10-34-47 1441.2
STOCK 2016-05-20-09-49-24 -1016.1
STOCK 2016-05-23-10-14-20 -807.8
STOCK 2016-05-23-11-02-41 -1816.3
STOCK 2016-05-24-10-22-10 1606.5
STOCK 2016-05-24-10-22-38 1977
STOCK 2016-05-25-12-52-34 7116.8
STOCK 2016-05-25-15-01-08 -3812.3
STOCK 2016-05-25-13-24-07 216.1
STOCK 2016-05-26-10-16-02 -150.5
OPTION 2016-05-26-11-42-26 2371.6
STOCK 2016-05-26-11-44-31 1471.6
STOCK 2016-05-27-10-21-35 -2398.9
STOCK 2016-05-27-09-52-45 2872.3
STOCK 2016-05-27-10-27-40 -1112.7
OPTION 2016-05-27-10-07-41 -1494.5
OPTION 2016-05-27-10-30-59 2943.7
STOCK 2016-05-31-12-21-53 583.3
OPTION 2016-06-01-15-58-46 -1088.5
STOCK 2016-06-01-09-51-32 -1274.3
OPTION 2016-06-01-10-53-49 -4731.5
STOCK 2016-06-02-10-47-02 -1011.1
OPTION 2016-06-03-09-52-20 2261
STOCK 2016-06-02-10-47-12 259.3
Option Levels fo MC trades
lvl MinBal Perc
0 <200000 0.02
1 200000 0.04
2 210970 0.05
3 226266 0.07
4 248066 0.09
5 280061 0.11
6 328910 0.15
7 407608 0.19
8 544199 0.25I have been following your journal from the very beginning and I was a fan. A few times I posted expressing my admiration for you and for posting your performance no matter what. You were inspiring but not anymore for me, ( not that you have to inspire me or any other of your readers, but since you are posting on a public forum allow me to express a harsh critic for once.
I have been in your position ( losing a lot of money ) I don't like to be harsh with someone who just lost money, and hope that somehow my comment will have a positive effect for you instead of a negative one but it seems that it has been a while since you trade like a gambler.
Last year you had a good performance about 100% on your account, yet you lost it before the end of the year. This year you had a great start and yet gave it all back. Losing money is part of this job, we get it, but how can you give it ALL back, A-L-L back again and again ?
Out of the money you made ( was it 200k ? ) between last year and this year maybe you could have kept 100k, 50k, 35k but nothing at all ?
Are you so taken by your trading that you forget how to give value to 100k or you just don't care ? You had it and now it's ALL gone. Do you give any value to the time you spend trading or researching ? There are places to go, thing to do and people to meet And what about your feeling that keeps on going up and down ? How can you be psychologically sound to trade ? Obviously that is the last of your problems.
I will repeat what I wrote you before one last time: I would kindly suggest to be more of a trader and less of a gambler.
If you keep doing exactly what you are doing maybe one day you will break to 1 million and everyone will be like ... wow look at Neke the best trader ever...but it will be just like a lucky guy who gets out of a Las Vegas casino after a huge win. I'll still have zero interest in being a gambler. Why ? Because with your ways after you make 1 million you will give it all back.
Why bother, there are 99 more pleasant things you can do with your life. Your money will stay the same just like after all your gambling. If you really have to gamble go to Vegas take your family to enjoy the restaurants, the pool, the shows. It will be more rewarding.
I'd like to believe that you can do much better than being a total gambler.
I have been in your position ( losing a lot of money ) I don't like to be harsh with someone who just lost money, and hope that somehow my comment will have a positive effect for you instead of a negative one but it seems that it has been a while since you trade like a gambler.
Last year you had a good performance about 100% on your account, yet you lost it before the end of the year. This year you had a great start and yet gave it all back. Losing money is part of this job, we get it, but how can you give it ALL back, A-L-L back again and again ?
Out of the money you made ( was it 200k ? ) between last year and this year maybe you could have kept 100k, 50k, 35k but nothing at all ?
Are you so taken by your trading that you forget how to give value to 100k or you just don't care ? You had it and now it's ALL gone. Do you give any value to the time you spend trading or researching ? There are places to go, thing to do and people to meet And what about your feeling that keeps on going up and down ? How can you be psychologically sound to trade ? Obviously that is the last of your problems.
I will repeat what I wrote you before one last time: I would kindly suggest to be more of a trader and less of a gambler.
If you keep doing exactly what you are doing maybe one day you will break to 1 million and everyone will be like ... wow look at Neke the best trader ever...but it will be just like a lucky guy who gets out of a Las Vegas casino after a huge win. I'll still have zero interest in being a gambler. Why ? Because with your ways after you make 1 million you will give it all back.
Why bother, there are 99 more pleasant things you can do with your life. Your money will stay the same just like after all your gambling. If you really have to gamble go to Vegas take your family to enjoy the restaurants, the pool, the shows. It will be more rewarding.
I'd like to believe that you can do much better than being a total gambler.
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Neke didn't lose all his money. He is up 30K this year, he is on pace to make 70K this year, more than what most people make doing things much more boring, soul-sucking, and time consuming than trading. And guess what? he has taken out exactly 30K, so he has taken out his profits. His profits are NOT all gone, unless you think the last 2 months are the only thing that matter.
Before you criticize neke, why don't you look at how much money you have made over the last 10 years trading, and compare it to him. Trading is a long term game, not a short term one. neke has a volatile, yet proven track record of success. And he has a full time job. He is one of the last people you need to worry about on ET.
He is outperforming 99% of the people here, and is in the top 1% in honesty on this forum. If you are looking for lies and smooth equity curves, go look for Karen the Supertrader. If you are looking for the rough realities of the road to success in trading, look for neke.
Before you criticize neke, why don't you look at how much money you have made over the last 10 years trading, and compare it to him. Trading is a long term game, not a short term one. neke has a volatile, yet proven track record of success. And he has a full time job. He is one of the last people you need to worry about on ET.
He is outperforming 99% of the people here, and is in the top 1% in honesty on this forum. If you are looking for lies and smooth equity curves, go look for Karen the Supertrader. If you are looking for the rough realities of the road to success in trading, look for neke.
He's been doing this since 2007...I don't think he needs your advice or is looking for it. He gives you updates...come and observe and leave...don't try to be a hero and convince others on your way of living. Oh, you're investing diligently and diversifying your portfolio? Congrats on the 10% return. Neke's not here for 10% return...okay?
Neke's compounded rate of return since 2007 has been roughly 20% a year.
That is great, but too low for what he is happy with.
The reason why his return is so 'low' is because he gives back so much money when he loses (plus he doesnt compound profits, he takes out most of his profits and doesnt allow his account to compound, even though he has a day job to cover his living expenses).
If he had aimed for 50% yearly returns (and not removed any profits), over 10 years he would have made $5million instead of just 1/10th of that much.
Instead he seems to want to make 50%+ a month. So he ends up with just 20% a year with a high risk of ruin to boot.
Madness.
Neke wrote that he once turned 15K to almost 150K in one year.
But it is relatively easy to make 1000% on 15K.
Much much harder to turn 150K to 1.5Million in just one year.
Why, after all these years of trying, doesnt he get that?
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He hasn't gone bust in 10 years, and he resizes smaller after drawdown, so I don't know why you would call that a high risk of ruin.
On the one hand you say he shouldn't have withdrawn profits from his account, so he can compound his gains trading bigger, yet on the other hand you say its much much harder to turn 150k to 1.5 mil.
Don't think neke is trading such size that he is facing big slippage on his orders, 150k to 1.5 mill will not be difficult because of liquidity and size concerns. Now 1.5mil to 15 mil in a year is a different story.
You can't know that, neke hasn't revealed any data so you're just guessing how much liquidity there is for his style. Many strategies will have trouble with his position sizes. Even if there is plenty of liquidity, bad execution will cause constant slippage that he might or might not have included in his plan. Slippage analysis should be a process done regularly.
Southall's point as I understood was that neke's position sizing is ridiculous, he is entirely correct regarding the risk of ruin. Now it only takes one more bad month for him to lose portfolio margin (I recall him using PM) meaning he will have less leverage and less chance of coming out from the hole.