Incorrect. None of Brooks' students have even claimed 5% consistent yearly returns from ES day trading with his methods, and certainly none have had the necessary third-party audits to verify such extraordinary claims.
By day trading, is it really impossible to get a 3% return every day without fail?
- Thread starter Sotnis
- Start date
Incorrect. None of Brooks' students have even claimed 5% consistent yearly returns from ES day trading with his methods, and certainly none have had the necessary third-party audits to verify such extraordinary claims.
That's the thing about "discretionary trading".
Most traders learn stuff from many different resources prior to coming upon a method they concentrate their efforts upon. Yet, those other things they've learned already will subconsciously be incorporated (merged) with that method they've now decided to learn.
That's the primary reason why two different discretionary traders using the same method have different trade results...the traders just think different and view the markets differently because of their different personalities and their different prior learned trading experiences.
Simply, Al Brooks trade method is discretionary and it reflects different trade performances within those using the method just like any other method (e.g. s/r analysis, MACD, trendlines, japanese candlesticks, breakouts, double tops/bottoms, traditional chart patterns, market tendencies, Wychoff, ACD and any other trade method that's out there).
For example, take a close look at The ACD Method thread @ http://www.elitetrader.com/et/index.php?threads/the-acd-method.170318/
Read through that education thread and you'll see some guys talking about their trade performance while trading the same trading instruments...their performance is different. Its not because the trade method is not clear...its because the traders are different from each other because they are subconsciously using that prior learned information.
I remember the first time I heard about the guy was in a free chat room many years ago on the Othernet server. There was a few hundred traders in the chat room and someone posts a question about who was using Al Brooks because he needed help with understanding some particular price action concept.
I think about 5 people said they were using his trade method. I recognize those 5 traders because they were very active in posting their real time trades. Two of them were profitable and the other three were consistently losing. Of the two profitable traders, it seemed like he was making about 75% consistent winners from his real time trade posts...most of his trades were small winners. The other profitable seem like he was around 50% winners but the winners were 3x bigger than the losers. As for the three losing traders...big losses and consistent...I believe two of them were naive newbies because I remember one asking how long will it take to become rich.
That new member that asked how many were using Brooks then notice the different performance levels about a month into the chat room and asked why was there such a difference. Many other members not using Brooks explained why such happens with any discretionary trading method...basically similar to my above explanation.
Sure enough, he had discussions with those traders and they all come from different prior learned trading experiences and have a completely different view of the markets in comparison to each other even after they learned Brooks method.
Conclusion, its not so much that a trader's failure and successes while using methods by Al Brooks or using methods via any other discretionary trade method...its really about the trader. This is the primary reason why so many traders say there is an art to successful trading. Seriously, get a friend and go to your local art gallery or museum...you both stand in front of an art piece that seem obvious and then write down what you see and feel when you look at that piece of art.
Next, compare your notes...you'll see we're just different and our perspectives/opinions via whom we are as a person. Thus, we define the art...the art does not define us.
Last edited:
I think the question would be:
"If you trade the ES and:
- make an average of 5 points a day, so at the end of a 5 day week you have made 25.
- increase your contracts traded to the margin limit each Monday,
- dropping back down 1 contract each time you lose $2,500,
- start with enough for 2 contracts and 5 stops in a row (=25 pts)
- how much would your account be at the end of 500 trading days?"
Start:
ES RTH margin requirement $2,500 * 2 contracts + your stop cushion ($5,000+$2,500) or $7,500 (roundup to $10,000=starting account balance).
e.g. Week 1 Start = 2 contracts points made Mon-Fri
= +7, -3, +8, +10, +3 = 25pts,
Week 1 = 25 pts * 2 contracts => +50 pts (or enough for 2 more contracts)
Monday increase to 4 contracts.
Account end of week 1 $10,000 + 50 *$50 = $12,500
So assume:
week 1 =2 contracts
week 2 =4 contracts
week 3 =8 contracts
etc
1.after 100 week how many contracts are you trading? =contract number?
2. how much does that equal at $2,500 per contract? =account balance?
3. looking at the answer to number #2, account balance, what does that imply about the likelihood that a person who could do this would be posting in a forum?
Hint for answer #1 :
start contracts * (growth rate^ periods) = final contracts traded
doubling is a growth rate of 2.0, weeks are 100.
e.g. 2 * 2^100= final contracts traded.
Last edited:
Let you make 3% per day with initial seed of 10K.
Roughly 20 days per month give you 10K*1.03^20= 18.06111K. And for 12 months you should have 10K*1.03^(12*20) = 12048.53K
After 30 years, how much you have?
After 100 years, how much you have?
After 400 years (with your sons), how much you have?
If there is ONE person who keeps daily 3% compounded, then Gates and Buffet should be broke NOW.
Note that stock market was open during the last 400 years from Netherlands.
example of drop back week
---------------------------------------aside for drop-back week --------------
This is simplified to make enough in points to double the contracts traded. If doesn't mean you won't have losing days but you are assuming you are making 25pts+ each week per contract traded. I have a dollar cushion for a stop day and you would drop down on a losing day bringing you to a cumulative total for the week of negative 5points.
e.g. Week with drop back = +2, -5, -3, +10, +21 = 25
Cumulative running week totals:
Monday +2
Tuesday -3
Wednesday -5
on Wednesday (cumulative total = -6 which is greater than -5) you would drop back 1 contract. eg. 4 contracts drop back to 3 contracts.
Start week 2 = $12,500 trade level = 4 contracts
Monday 4*2pt = +8 points = $400 + $12,500 = $12,900
Tuesday 4*-3pt = -12 points = $-600 + $12,900 = $12,300
Wednesday 4*-5pt = -20 points = $-1000 + $12,900 = $11,300
(drop back from 4 to 3 contracts)
Thursday 3*-10pt = +30 points = $1,500 + $11,300 = $12,800
Friday 3*+21pt = +63 points = $3,150 + $12,800 = $15,950
$15,950 - $2,500 stop cushion = $13,450 / $2,500 margin req = 5 contracts
For week 3 you start with 5 contracts
- though I have included a drop-back week where your increase is from 4 to 5 contracts (instead of 4 to 8) ---- it isn't known when it will happen nor if there was some very high weeks proceeding this - so for ease of extrapolation calculation, calculate in simple contract doubling.
--------end of aside for drop- back week example -------------------------------------
---------------------------------------aside for drop-back week --------------
This is simplified to make enough in points to double the contracts traded. If doesn't mean you won't have losing days but you are assuming you are making 25pts+ each week per contract traded. I have a dollar cushion for a stop day and you would drop down on a losing day bringing you to a cumulative total for the week of negative 5points.
e.g. Week with drop back = +2, -5, -3, +10, +21 = 25
Cumulative running week totals:
Monday +2
Tuesday -3
Wednesday -5
on Wednesday (cumulative total = -6 which is greater than -5) you would drop back 1 contract. eg. 4 contracts drop back to 3 contracts.
Start week 2 = $12,500 trade level = 4 contracts
Monday 4*2pt = +8 points = $400 + $12,500 = $12,900
Tuesday 4*-3pt = -12 points = $-600 + $12,900 = $12,300
Wednesday 4*-5pt = -20 points = $-1000 + $12,900 = $11,300
(drop back from 4 to 3 contracts)
Thursday 3*-10pt = +30 points = $1,500 + $11,300 = $12,800
Friday 3*+21pt = +63 points = $3,150 + $12,800 = $15,950
$15,950 - $2,500 stop cushion = $13,450 / $2,500 margin req = 5 contracts
For week 3 you start with 5 contracts
- though I have included a drop-back week where your increase is from 4 to 5 contracts (instead of 4 to 8) ---- it isn't known when it will happen nor if there was some very high weeks proceeding this - so for ease of extrapolation calculation, calculate in simple contract doubling.
--------end of aside for drop- back week example -------------------------------------
There are roughly 52 weeks in one year, so that you hope
1.01^52 = 1 + 0.677689 with APR=68%.
If you keep the APR many years, then you should be best millionaire in the world.
Suppose you have seed of 10K and keep 30 years of 68%, the your asset will be 10K*1.68^30 = 5744847K = 5744M.