Get Rich Or Die Tryin'!

SabreMan said:
...I am happy to take a 50 or even 60% drawdown in order to make 143%.
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The amplitude of these swings will send you to the poor house.
Need less risk in order to sleep better.
Create a system with a smoother curve would be wiser.
Schweiz's post above makes sense as well, luck is a very large part of trading at times, both good and bad, one should always err the side of caution. Swinging for the trees on "hitting the big one" in a trading plan is not a good idea. Trading is a journey, not a destination, good trading plans have boring outcomes - dollars which just keep coming in, bit by bit by bit.
However apologise for my rant, you have titled this" get rich or die tryin" :)
 
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The Famous Ed Seykota Interview:

Jack Schwagger asks his interviewee: “Don’t all traders want to win?”
And Ed replies with: “Win or lose, everybody gets what they want out of the market.

“I know one trader who seems to get in near the start of every substantial bull move and works his $10 thousand up to about a quarter of a million in a couple of months. Then he changes his personality and loses it all back again. This process repeats like clockwork. Once I traded with him, but got out when his personality changed. I doubled my money, while he got wiped out as usual. I told him what I was doing, and even paid him a management fee. He just couldn’t help himself. I don’t think he can do it any differently. He wouldn’t want to.

“He gets a lot of excitement, he gets to be a martyr, he gets sympathy from his friends, and he gets to be the centre of attention. Also, possibly, he may be more comfortable relating to people if he is on their financial plane.
“On some level, I think he is really getting what he wants.”
 
themickey said:
The Famous Ed Seykota Interview:
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Ed Seykota when he had a big edge trend following in the 70s used to take large risks and 50% drawdowns. That is the way he capitalised on his edge and averaged 100+% returns a year in the 70s.
When the markets stopped trending so well and his trend following edge diminished he said he could no longer trade that way as it took too long to recover from 50% drawdowns as compared to before.
 
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When the markets stopped trending so well and his trend following edge diminished he said he could no longer trade that way as it took too long to recover from 50% drawdowns as compared to before.

That's completely made up BS! Ed Seykota was a fanataic about cutting losses immediately, he did not take 50% draw downs, that's ridiculous. Seykota traded decades after the 70's and did very well, he would be the last one on the planet to claim trend following 'has diminished'.

Trend following is just viable today as it has always been. Sure the 70's had slightly larger swings on gold & silver. The dot.com bull and Crypto's make up for that an than some.

Trading costs are about 90% less now then the 70's and slippage is way down & you have lightning fast trade fills now around the clock, in the 70's you were on a call getting mugged by the pit traders and your broker. This is the golden age of trend following.

You have the have the great stock bull market 2009 - present, if you cant strike pay dirt in these conditions when trading has never been easier chances are you would have gone bust trading in the 70's.


http://www.macrotrends.net/
 
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comagnum said:
That's completely made up BS! Ed Seykota was a fanataic about cutting losses immediately, he did not take 50% draw downs, that's ridiculous.
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He had several 50% drawdowns in the early and most profitable part of his career on his way to making a Million%+ overall return.
He did not get to a Million% by not having large draw downs, he was not doing HFT. He does not recommend trading that way these days as the markets in general do not trend as well as they did in the high inflation 70's.

I do not know why Jack Schwager did not mention Seykota's largest ever draw down in his Market Wizards interview. We are only told one side, "The model account went from $5000 to $10million+". No mention of the draw downs suffered to get there.
Same for Marcus. What kind of draw downs did Michael Marcus take going to $80million profits? We are never told, which is a big disservice to the reader.
I guess the traders themselves did not want this very important detail mentioned, lest they appeared to look like gamblers.
But Schwager does mention the draw downs that Larry Hite's Fund and the Richard Dennis Fund suffered (in the case of Dennis almost 50%!), but that looks like widely known or public hedge fund info.
 
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