Aaron chat

[Aaron]

Quote from cartm:

WOW. I am really pissed I missed that chat, just read the logs. I have a few questions that I would have asked if I was able to participate.

1. Why a CTA, why not register as a CPO?
2. Does the fact that you wrote much of your own sub docs/ppm etc turn off prospective clients? (Institutions)
3. I have been meaning to try ffastrade, but have been unable to bc of personal reasons lately, what is your opinion of it, in contrast to TT's X. How stable is it? I like the X depth trader, can you compare it to ffastfill, eventually I will just have to try it myself to know for sure, but am just asking your opinion. Is the lite version of ffastrade somewhat equal to the full?
4. Have you considered or thought of taking down your risk/reward ratio, that is, sacrifice the 95% return in return for lower dd's?
5. I saw the sharpe ratio mentioned a few times, but not the sterling? Do you use the sterling, does anyone use the sterling, I thought Sharpe was predominately used for equities.
6. You said you are sys, do you ever trade dis? Have you ever?
7. You mentioned the 3 instruments you trade, what other ones are you looking at to possibly trade in the future? Mini dow, E50, SSF'S?
I have a few more but am going to reread it later, thank you for sharing your thoughts, experiences with everyone on ET.

Hi cartm...

1. Schindler Trading is both a CPO and CTA for the Schindler Fund. Sometimes the CPO and CTA will be different firms. Since we are both, the NFA said we only needed to register as a CPO. We are not a registered CTA.

2. Not that I've ever heard.

3. These are good questions, perhaps, for the FFastfill people. I've never used X-trader or the FFastfill lite version. I like Interactive Broker's platform better than FFastFill's (less bandwitdth, better design, API, better protection against trade errors), but the lower commissions and better customer service at FFastFill more than make up for the platform's disadvantages.

4. If you, personally, want lower risk and lower drawdowns, you should invest less money with Schindler Trading. You can choose whatever risk level you like by putting part of your portfolio with Schindler Trading and part in a money market account. No need to pay us fees on money sitting idle.

5. Sharpe ratio is just a measure of reward versus risk. It can be used for any risky investment. The Sterling ratio is similar but uses the average max drawdown rather than the standard deviation of returns in the denominator. Both have their uses and weaknesses. Because of our uncorrelation with equities and bonds, Schindler Trading has an extremely high Treynor ratio, which looks, not just at the reward versus risk of an individual investment, but how the reward versus risk of one's entire portfolio will be affected.

6. I have tried discretionary trading with my own money (never for Schindler Trading). I don't have the stomach for it. I tend to cut my winners short and let my losers run based on a psychological aversion to turning paper losses into actual losses.

7. We are making some headway researching strategies for the Globex traded currency contracts.

Good luck trading, cartm!

 

[praetorian2]

Quote from DisciplinedHedg:



And the regular drawdowns you see, as you stated, have been only 5-10% or 3% this year?

That is truly (fill in the blank).

I'm not sure what you are getting at. Give me a bit more to go by and I'll help you "fill in the blank."

In the past 3 years, I had one drawdown of about 25% and a few around 15-20%. I was able to reverse all of those though within a few weeks or about 2 mos. max.

So far this year, I really have not had any drawdowns over 3% I believe. I have been very fortunate. An overly large cash position, 50-65% on average overnight, and low leverage usage intraday has helped reduce drawdowns.

 

[Aaron]

Quote from OPTIONAL777:


Aaron's statistical figures disturbed me during his on line chat. He was so specific about gains "Yes, after we topped the charts with +97% in '02 we got a lot of new investors" but talked about drawdowns of 20 to 30%.

Isn't it interesting how people know exactly the upside figures, and give a wide range of down side?

I tried to ask about the 97% number, whether that was total return, or from some valley to peak, but the question did not go through.

Our maximum drawdown to date was 26.0%. That is much smaller than we would expect to have had with the amount of risk we assume. A 40% drawdown would not be unexpected.

Yes, our 2002 return, from Jan. 1 through Dec. 31st was 97%. This is net of 2% management fee and 20% performance fee. Additional performance statistics are available on our website at www.SchindlerTrading.com.

 

[Aaron]

Quote from marketsurfer:




let's not forget that the 97% figure was before his fund was even at the 1.5 million dollar ( us) figure it is now. day traders regularly double their money can they do it again is the question. please don't think i am ripping on the presenter , he seems like a great guy and was very kind to share his knowledge.

best,

surfer

Thanks, surfer.

 

[marketsurfer]

Quote from Andre:

I've found that the longer you go at this the simpler it gets and you get.

From my work with Innerworth and here on Elite Trader, I've now spoken to many traders. I've read the main interview books most folks have read, and of course Innerworth's interviews...

If there's one thing that's gotten distilled above all else, is that once you figure it out, it's pretty simple. One fellow who manages millions, swing trades, 2 days to 2 weeks - uses one monitor and basic DSL. He might get a professional type feed and charting package like Real Tick. But that's it. What might be more important, is what he reads.

I see many people who have 4-6 monitors and charts out the wazzoo. Maybe it helps them. I dunno. I want a second monitor for a trading screen. But that's because I do other things all day, not because I'm going to be having so many charts open I need more display space.

Of course, I'm still looking for my angle. I may have found it. If that's the case, I'll have to start the long process of building up my capital. I am still 2-3 years away from trading like I would like to.

Count me as another who is enjoying this conversation.

André

disagree on the less is more philosophy. one can not have too good data, too fast computers, too many screens, too good of a news feed, et al . i started out charting by hand then graduated to an ancient laptop with fm radio quote feeds, so i have been there. there is no need to handicap ones self any longer with inferior equipment. it's hard for me to believe that gary smith trades on a single laptop--- geez !

best,

surfer

 

[Aaron]

Quote from deepitm:

Did I read the chat log correctly that Aaron is using the free Quote.com data feed? Isn't the free data feed delayed by at least 10 minutes?

It's real time for the indexes. I just use quote.com for the charts to see how the market is doing for the day. I actually trade off the real time futures quotes FfastFill provides via their trading platform.

 

[marketsurfer]

Quote from Aaron:



It's real time for the indexes. I just use quote.com for the charts to see how the market is doing for the day. I actually trade off the real time futures quotes FfastFill provides via their trading platform.

aaron,

i hope you beat me to the 10 million mark !

best to you,

surfer

 

[Aaron]

Quote from marketsurfer:




do these databases do ANY due diligence before accepting a fund ??

best,

surfer

It varies widely. Some didn't do any. Some want subscription documents and check on registrations. Morgan Stanley wanted: audited financials, to talk to the manager, to see the fund documents, and to check on registrations.

If they do any due dilligence, the databases are just looking to see that a fund exists and is on the up-and-up. They just catalog funds and, in general, pass no judgment on the quality of the fund. The investor needs to do their due dilligence as to the suitability and desirability of an investment for their portfolio.

 

[links]

Quote from DisciplinedHedg:



I've found that the longer you go at this the simpler it gets and you get.

I've constantly eliminated nonessentials. And you start to realize your bottom line counts.

It's the starters who look for all kinds of fancy gadgets and systems for some kind of edge. Only with time do you realize your biggest edge is your own experience.

I agree, if you study the field of Knowledge Management it is very clear that information overload actually hampers performance. For us traders I think we have to make the distinction between doing research and the actual trading. For brainstorming purposes one can justify five computer screens and go through hundreds of charts to let the ideas bubble, but when you finalize your strategies then I believe less is more.

This is actually turning out to be a pretty good thread, as another poster said a good conversation.

 

[trader99]

Quote from alfonso:




I know some hedge fund managers are good guys, and truly do want to the right thing by their clients. (I actually do know, personally, some managers. My family is quite involved in the financial world.)

Having said that, the temptation to shoot for big gains, and thus higher personal rewards, is just too big for most managers.

Hedge funds, from the manager's perspective, really are a game of "heads we both win, tails only you lose".

Well, that might be true in a strict sense, but a lot of hedge fund managers net worth is tied up in the fund they are managing. Victor Niederhoffer's lost everything when his fund blew up. He had to sell his mansions, paintings, silver collection, books, arts, antiques,etc.

Most hedge fund managers have almost all of their net worth/assets tied in the funds they are managing. How else would people believe you if you can't even believe in yourself? They can't put 95% of their assets in a savings acct earning 1% when they claim they are swinging around the market making good returns.