Honestly, Can You Be Successful Without a HUGE Account?

[Spectra]

Jimmy your missing the point. The sad sad sad fact. Most of the traders who will come in to our room or any room will fail. It just the nature of the business. They wont fail because our system is bad. They'll fail because they will not follow it. One great trader recently said that she could post her setups each day on the front page of the wall street journal and no one would take them. Skepticism, fear, inexperience, issues at home. Who knows exactly all the reasons why we fail. When we first started our business. The goal was to make sure atleast 30% of the people who joined turned in to profitable traders. This means that 70% would have to fail. If you see a way around that then we'll implement it right away. So can you do well with a $2,000 account yes? Is it very likely.. NO!

I'd rather someone come in with a cautious attitude then a trigger happy one.


CajunSniper / Puretick.com Administrator-Trader

Soooooooooooo, you've started a thread asking a question Honestly, Can You Be Successful Without a HUGE Account? and it seems that using your system, the answer is a resounding NO?

 

[Pa(b)st Prime]

Jeez, I posted this Five freakin' years ago!

Quote from Pabst:

I'm not the best guy to comment on this. I grew up a scalper and even now off the floor I consider a 2 day position an "investment".
But as someone who has seen the likes of Rich Dennis and Tudor Jones operate, those "5%" winning trades involve add on after add on. Case in point is Dennis in the 1985-1986 bull market in bond futures. He would start with his normal unit of 500 contracts and get chopped for days. Buy the days high, put em back out on a new swing low ect. Every once in a while he'd wind up with 500 that worked. Then he'd start the process higher, all over again. Work em in, work em out. After maybe a couple of months the market has rallied 10pts. from where he started and he has 2000 on.(meaning 2million a point) Now the market is short and ready to pop on any size buying and he's there supplying the noose. Bidding for 500 on every up tick, finally gets to a point where for the last month of the move he has 5000 on. T-Bonds rally 20 pts. in just over a month and he's up $100,000,000 on a trade that started out with him just testing the waters,losing $100,000 a few times before he could establish a position worth doubling up on.

And this one:

Quote from Pabst:

Great post Nitro. I am firmly with you and Commisso on this issue. I spent most of my career being a "true" scalper, i.e. a local who bought the bid and sold the offer. Adding to losers and peeling out of winners was my schtick. Very rewarding in the micro. Obviously low commissions and a tremendous positive expectancy are paramount for successfully employing such a strategy. However few traders are so skilled as to lay claim for any expectancy high enough to justify an even R/R. In the macro those "consistent, steady returns" that every novice yearns for are death waiting to happen.
True story. A guy was relating to me how he started way back in the MidAm with Rich Dennis. They would each enter a trade off the same setup. As the fellow I met would be getting out with a small profit, Dennis would be doubling up. I remember the phrase he used, "Rich would push the pedal to the metal on every trade." Of course RD was in his formative stages on his way to 200mil. Later in the evening a friend who was with me, said that the guy who had told us the story about Dennis had also been a pretty good trader. But on that night, many years after his prime, the fellow with the good tale, was toiling behind the bar pouring drinks.

 

[JimmyJam]

Quote from Spectra:

Jimmy your missing the point. The sad sad sad fact. Most of the traders who will come in to our room or any room will fail. It just the nature of the business. They wont fail because our system is bad. They'll fail because they will not follow it. One great trader recently said that she could post her setups each day on the front page of the wall street journal and no one would take them. Skepticism, fear, inexperience, issues at home. Who knows exactly all the reasons why we fail. When we first started our business. The goal was to make sure atleast 30% of the people who joined turned in to profitable traders. This means that 70% would have to fail. If you see a way around that then we'll implement it right away.

About the failure rate, I'm sorry to hear about that, but that may be human nature, I honestly don't know if there is a way around it.

So can you do well with a $2,000 account yes? Is it very likely.. NO!

80% chance of success ... , rising to over 90% chance of success once the double digits are hit.

I'd rather someone come in with a cautious attitude then a trigger happy one.

Trigger happy ain't got noth'in to do with it, but then again, neither does being cautious.

CajunSniper / Puretick.com Administrator-Trader

Good trading,

Jimmy Jam

 

[Spectra]

I just hope Alex's and my experience rubs off at least a tad on some of these guys.

 

[Spectre2007]

FIFO is not a impediment when your using 'drift' in your favor to hit the spread for entry and exit.

 

[osorico]

Quote from Pa(b)st Prime:



...

Scalping taught me HORRIBLE habits. As my size increased it was impossible, even in a pit as liquid as the bonds, to trade each tick. Thus adding to losers under the justification of "trading at a level" was my modus operandi. Since I'd clerked at a retail firm I was familiar with trend following strategies so I was able to successfully merge scalping and trend following for a while. Right market at the right time.

Alas conditions changed and my discipline which is 1 on a scale of 10 led me to massive losses. I still didn't get it. I held on to the hope that markets can be gamed daily in the micro. I suspect I use a technique similar to yours in fact. However Austin the writings of Taleb, Dennis, Eckhardt etal have led me to believe that much short term success is in fact the random product of unscalable methods lacking in common sense. Position sizing is key. Most short term strats only allow for adding to losers as opposed to adding to winners.

The easiest way for me to illustrate this is by re-posting some observations I've made of Richard Dennis. Very appropriate since he took $2000 and ran it up to $200,000,000 in a decade. He stands alone as the greatest trader in history. I'll post these tales shortly.

Quote from Pa(b)st Prime:

Jeez, I posted this Five freakin' years ago!
...

Im failing to your see your point. But then Im a stupid, crappy trader.

On one side you laud RD, suggesting (his) trading success is due to position sizing. On the other side you laud RD for taking on large risks (while still in his informative years, suggestive that he was swinging for the fences.).

Here's a couple of links (off of the TT site) regarding position sizing...
http://www.turtletrader.com/position_sizing.pdf
http://www.turtletrader.com/money.html


So back on topic... the small account, when properly empowered with position sizing and money management, can be successful regardless of the style of trading. Is that what you are saying? The statement (although for only one day) suggests that.

Osorico

 

[123Magic]

Quote from 123Magic:

Spectra, is it true Alex was schooled by John Carter and Hubert Senters, the ex-traders turned marketeers? If so, he is one of the rare people who spent a decent amount of money with those clowns and actually learned to trade profitably.

Senters was once overheard as saying that newbies are going to lose their money anyway, so why shouldn't he and Carter take some of it before they lose it all. Cynical and sad, but true.

Spectra, you are very thorough in replying to posts so I assume you just overlooked this one. If you don't know, maybe Alex can address it.

 

[Spectra]

123Magic,

Yep. Didn't see that one sorry. Ahh yes Alex makes no secret of his past mentorships and learning experiences. It's how he got where he is today.

Alex has spent decades and over $100,000 learning to trade. Hes been in numerous mentorships himself (including TTM, Linda Raschke/LBR Group, Mark Fisher and others), purchased countless books and attended a number of seminars. It is our hope (and pitch) that by tapping in to his mind and experiences, you will not have to spend this vast amount of money to learn to trade.

As far a hubert goes, I know onlywhat Alex has told me. That his tape reading class was very valuable. But they only teach that in person.

CajunSniper / Puretick.com Administrator-Trader

 

[Pa(b)st Prime]

Nice links BTW.

RD's "risks" involved his ability to neglect the short term uphoria of cashing in winning positions at the expense of missing large moves.

Dennis would explain that losing one's winning position in a trending market is a greater risk than losing the short term profit generated by that position.

Quote from osorico:

Im failing to your see your point. But then Im a stupid, crappy trader.

On one side you laud RD, suggesting (his) trading success is due to position sizing. On the other side you laud RD for taking on large risks (while still in his informative years, suggestive that he was swinging for the fences.).

Here's a couple of links (off of the TT site) regarding position sizing...
http://www.turtletrader.com/position_sizing.pdf
http://www.turtletrader.com/money.html


So back on topic... the small account, when properly empowered with position sizing and money management, can be successful regardless of the style of trading. Is that what you are saying? The statement (although for only one day) suggests that.

Osorico

 

[osorico]

Quote from Pa(b)st Prime:

Nice links BTW.

RD's "risks" involved his ability to neglect the short term uphoria of cashing in winning positions at the expense of missing large moves.

Dennis would explain that losing one's winning position in a trending market is a greater risk than losing the short term profit generated by that position.

You answer as well as the following QA from one of those links explains why, for now, I trade the way I do. I don't trade looking for the few outliers, although intraday, especially with an increase in volatility, I seem to find a few each week anyway. It doesn't mean any particular style is right or wrong.

Q. What is the win/loss ratio of Trend Following management? Can it experience many losses in a row?
A. Trend Following systems (and the Turtle system) trade for the outsized large move. Several big trends a year are your key to success. The strategy cuts your losing positions quickly. Consequently, a few big trades will make up the bulk of your profits and many small trades will make up your losses. Winning trades can range from 35-50%, but that percentage reveals little information since we expect more losses (of smaller value) than winners (of much larger value). Win/loss ratio, while a favorite of the novice trader, has limited use in terms of Trend Following analysis.

Play what you see,
Osorico