Draw-Down Analysis

Quote from damir00:

well you're obviously not a marketing guy. where's the title?! :-)
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The book is called Techniques of Tape Reading by Vadym Graifer, Christopher Schumacher

and can be purchased from amazon http://www.amazon.com/exec/obidos/A...1338821/sr=2-1/ref=sr_2_1/104-5553246-3391164

The reality crew www.realitytrader.com is way too classy to push their stuff here on a public forum (unlike some others that pollute these boards) and if the book is even remotely up to par with the work they do and have done in the past then I can highly recomend it without ever even reading it yet :)

PEACE and good-trading,
Commisso
 
Quote from damir00:

well you're obviously not a marketing guy. where's the title?! :-)
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Thinking that posting the title would be considered advertising...Techniques of Tape Reading is the title..if this is advertising..feel free to kill the post whoever the moderator may be.

Thanks for the interest.

Chris
 
Quote from TriPack:

Commisso: nice to see you back.
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Tri,

So nice to hear from you :) Yes I did see that thread and thank you very much for the kind words. Nice to hear that my ramblings and rants affected some others in a positive way.

Hope all is well with you and yours (your trading too of course)!
Commisso
 
that would fill a void. thanks! i'll be on the lookout for it.

Quote from ChrisRT:



Thinking that posting the title would be considered advertising...Techniques of Tape Reading is the title..if this is advertising..feel free to kill the post whoever the moderator may be.

Thanks for the interest.

Chris
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Quote from J~Commisso:

I was wondering what sort of measurements you guys (especially those that are or have traded other peoples money, such as P2, MarketSurfer, and Aarron) use when doing a Drawdown Analysis of your accounts???

I have traded my own capital for years and have always used a very basic DD analysis, which basically only measured 5 things; Magnitude, Length, Recovery, Valley, and Peak...

But in the 4th Qtr I will make the transition to managing OPM, as well as my own, and I was just looking to get ideas as to how other traders view and measure their own dreaded drawdowns #'s...

TIA

PEACE and good-trading,
Commisso



EDIT; Just to clarify -- When I say OPM I mean I am managing an account for a private company so I am not required to follow any regulations or guidelines to report drawdowns to the company itself...
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Hello my friend. In 35 years or so of trading I've never done a "draw down analysis". Seems a little mis-focused, if you will, to do a statistical analysis of how badly you're losing your ass, when you could just as easily concentrate on WHY you're losing your ass.

Reminds me a little of baseball cards, only the ball player keeps his own statistics as he goes. LOL.

Of course, now that you're going to manage someone else's money, perhaps they'll be interested in how deep the valley is 'on average', and how long' on average' before you can climb out of the valley. And if you could somehow then combine it with some color coded pie charts it could really spruce your monthly report up.

Personally, I'd rather just concentrate on how much dough I make each month, rather than statistics. Or in your case, perhaps you could concentrate on discovering who you are.

Just having a little fun on a slow August night. Hope all goes well with your trading and your new venture. Take care.

OldTrader
 
Quote from OldTrader:



Hello my friend. In 35 years or so of trading I've never done a "draw down analysis". Seems a little mis-focused, if you will, to do a statistical analysis of how badly you're losing your ass, when you could just as easily concentrate on WHY you're losing your ass.

Reminds me a little of baseball cards, only the ball player keeps his own statistics as he goes. LOL.

Of course, now that you're going to manage someone else's money, perhaps they'll be interested in how deep the valley is 'on average', and how long' on average' before you can climb out of the valley. And if you could somehow then combine it with some color coded pie charts it could really spruce your monthly report up.

Personally, I'd rather just concentrate on how much dough I make each month, rather than statistics. Or in your case, perhaps you could concentrate on discovering who you are.

Just having a little fun on a slow August night. Hope all goes well with your trading and your new venture. Take care.

OldTrader
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Nice to see you old one :) ironically I was just going to send you a pm saying that it was nice to see you back on the boards posting and then bam here you are. I literally just before checking this post added you to my new buddy list...

For the most part our feelings on DD analysis are actually very much in accord, which is why I had to start a thread of this nature in the first place (after trading for living for 6 years). I, unlike you it seems, want to know how bad, as well as WHY. For my own accounts though I was more than satisfied with knowing not much more than max dd, dd to net, and an avg dd.

BUT I want to sink it into my 1 (and only) large investors head that his attention should be foremost on the risk inherent in trading -- I have always viewed my own trading this way and I want him to be no different. As such, I thought it might be wise to show him the ugliness of a DD in all its glorious formations :)

Hope all is well with you my friend and like I said it is extremely refreshing to see you posting here again...

PEACE and good-trading,
Commisso

BTW; an invitation is always extended to drop by my room on IRC to chat with us like we used to. If you forget the channel then just shoot me a PM.
 
Quote from OldTrader:



Or in your case, perhaps you could concentrate on discovering who you are.
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Jesus that sounds like something I would have said to another :p Good one my friend!

PEACE and good-trading,
Commisso
 
Quote from J~Commisso:



Thanks Peter! This is exactly the type of thing I was looking for with this thread. "Risk of Ruin" measurement indeed sounds interesting and after all these years has totally managed to escape my limited realm of imagination :)

Do you happen to have any links or know of any resources where I can further explore this concept?
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Sorry, that's all I got.

Also, I will say, the tool is not for figuring out "how fast you are losing your ass". It's to get a "second opinion" on what size you should be trading. It can warn you of danger that may not be readily apparent after a profitable month.
 
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