How much capital required to generate $200/day pair trading?

[bwolinsky]

Quote from bespoke:

I hate sounding like a jerk but im getting tired of seeing you spam your C2 page here.....

Shouldn't a successful pairs system always make money regardless of which way the market goes? That's one of the benefits of trading pairs, no?

And shouldn't "scalping" systems make money during downturns too? Outperform the market, lmao. This isn't a buy and hold mutual fund.

I've seen you try to spam your system on here for ages. It's getting old. I wouldn't trade your system even if you paid me. 5 dollar a month for a subscription. You sound like a beggar. If you want some respect, show us your real money trading results with this "system" of yours. Do you even have money in the market? Is this a high school project?

"Hmm, being the best pair trader in the world:" - this is a joke right?

If you think pairs systems always work you are uninformed, and haven't read the years of literature on the subject. It goes back to the 80's. Do some searches in the Journal of Financial Analysis, and Lexis Nexis. It's all covered in some of those articles. Some didn't make the timeframe connection though, and just expanded on the theory behind it.

You can search bwolinsky on covestor.com, and that is a free service currently. Robert Weinstein referenced me there.

 

[bwolinsky]

Quote from WesSeid:

"Outperform." With all the grief Tim Sykes takes around here, even he doesn't base his % on "outperform" and in fact makes fun of those who do.

It's hard for me to find "substantial worth" in a system that can't "outperform" cash in a mattress.

To answer the OP, I think dhpar already had one of the best answers back on page 3. If you can't average a 50% return on a smaller account, it might be time to try something else. Unless the risk is very small and/or doesn't require full-time attention, I guess.

That's probably one of the stupidest people you could have picked to defend your stance. We're talking about trading and investing here, not gambling, which is what buying any pink sheet stock is.

I'm not going to reference the returns of my system anymore, as I was asked not to. If you want to see "real returns" you can have a look on covestor and on the earlier pages.

Well, 50% is peachy. It's a pie in the sky number. I'm perfectly happy with a good 30%. That's not to say I won't catch up to that at some point. You'll find most stats are not stationary until the system is older than 5 years, or have been around for 1500 trading days.

Going back to the OP's subject, it seems whenever somebody asks how much capital do I need to make x? or x per day? or x every year? There's always people that come out and throw out their average number. The more money you have, the more money you're going to make. As you grow capital consistently, you'll compound on your earlier profits. Compounding may be why people throw out the 50% APR pie in the sky only a couple investors in the world have done that number.

It's easy to sit there and say you want 50%, making it is another story, b/c if you haven't traded for years, you're far more likely to lose 50% your first year, then nuke the account completely when you attempt to get back to your "50% per year" desired trajectory.

 

[bwolinsky]

I can only go by what I've had years of experience looking at, but obviously there's some benefit to hindsight with the data.

http://wl4.wealth-lab.com/cgi-bin/WealthLab.DLL/getpage?page=Top25APR.htm

Looking at that page, I notice the tweak I made to Mr Altucher's system, and wanted to make it comparable to my own.

We're assuming the system can be easily implemented by the free code there.

QQQQ 10% Gap, 0.75% Market Gap, no Short

Specifically is what I'll discuss.

If my drawdown is 33.68%, and this system's DD is 7.68%, this means 1.1173^(.3368/0.0768) or 62% has a better risk adjusted return over the last 1500 trading days. That's assuming leverage of 4.3854167.

Now, the difference is in the amount of time we have for the backtest. I feel that I'm going to do better than the systems at this link:
http://wl4.wealth-lab.com/cgi-bin/WealthLab.DLL/getpage?page=Top25APR.htm

If you want to have a reasonable APR, you could very easily average the top 10 APR's and get the answer of 18% approximately is what a top 10 strategy is doing right now. Currently doing 28%, so I'm beating the average of the top 10 most profitable limit order scripts.

Why does everyone think returns less than 50% isn't any good? It's all right, kids. When you're all grown up you'll start to realize a good 20% is swell for your lifetime. It just has to do with how soon you start, and how long you devote to building a foundation to succeed in the financial markets.

 

[spinn]

Quote from bwolinsky:

With the market down 40% they're paying for outperformance, so it's still worth substantial money. Also, it would appear I'm only down 15% from that point.

Um........this was a phenomenal market the last twelve months. A good, or even average method, should of made an absolute killing during this period.

How much food or rent can one pay for while only losing 15% last year?

My answer to the original question is that if I properly executed my method, $8600 or so could generate $300-$500 most weeks trading 100 shares of the SPY for 1-3 day holds.

 

[bwolinsky]

Quote from spinn:

Um........this was a phenomenal market the last twelve months. A good, or even average method, should of made an absolute killing during this period.

How much food or rent can one pay for while only losing 15% last year?

My answer to the original question is that if I properly executed my method, $8600 or so could generate $300-$500 most weeks trading 100 shares of the SPY for 1-3 day holds.

Plenty, I doubled the year before that.

Hi, please go to collective2.com immediately and prove it. If not, quit talking out of your ass. That's the whole problem with the paper traders on this site. If you don't want to pay we can see you at covestor.com.


Anyway, last I checked the S&P was -40% for the last year, so if you want a benchmark that you know if you beat then you'll be successful beyond your wildest imagination, then use the .SPX.

Ex Post edit: I'll expand on this. You're saying you make 500/8600=5.8% "most weeks" Well, the next thing you'll sit here and say is you lose only $50 in a down week. Yeah, right. I'd really like to see you try.

 

[spinn]

Since you asked.....my C2 system is up 44.7% in the two months I have been using it.

And no I do not sell it.

<a href="http://www.collective2.com/cgi-perl/systems.mpl?want=p&systemid=38880075">
<img src="http://www.collective2.com/cgi-perl/badge.mpl?systemid=38880075">
</a>

 

[bwolinsky]

Quote from spinn:

Since you asked.....my C2 system is up 44.7% in the two months I have been using it.

And no I do not sell it.

<i>Well, actually I do, b/c only the owner would have this java code and I'm just trying to promote a bottom quartile vendor's trading system.</i>

Yes, you are the owner, and it is for sale, nice try, b/c only the owner has that medallion. So, anyway, you're just 42 days old, there's nothing that can be said about it, either good or bad, other than it's a random post having nothing to do with pairs trading. You're rating says you're in the bottom 15% of c2 vendors, though, so I'm not going to pay that much attention to you, and I see you've blown up two accounts which makes you a paper trader so I guess I won't see you at covestor. If you were leveraged up more I'd recommend a contratrade if I also felt you didn't have an edge. But in this situation there's not much to be said about it other than that it is totally irrelevant to the topic, but...I did ask and I just now realized that.

 

[bwolinsky]

Quote from spinn:

Since you asked.....my C2 system is up 44.7% in the two months I have been using it.

And no I do not sell it.

<a href="http://www.collective2.com/cgi-perl/systems.mpl?want=p&systemid=38880075">
<img src="http://www.collective2.com/cgi-perl/badge.mpl?systemid=38880075">
</a>

Well, I guess up is good, but this is not the system you described. It's buy and hold on spy, essentially through leveraged ETFs, with a lucky entry on the long. I've yet to see a sub 200 level c2 vendor make it out, b/c these vendors have systems that follow them around. Usually this is due to them coming onto the site before they're ready, and I don't see any stellar command of trading acumen in this system. I think you should take more time to devote to analysis and backtesting. Right now, 2 trades and considering the timing relative to the S&P500 just looks like luck.

 

[spinn]

Quote from bwolinsky:

Well, I guess up is good, but this is not the system you described. It's buy and hold on spy, essentially through leveraged ETFs, with a lucky entry on the long. I've yet to see a sub 200 level c2 vendor make it out, b/c these vendors have systems that follow them around. Usually this is due to them coming onto the site before they're ready, and I don't see any stellar command of trading acumen in this system. I think you should take more time to devote to analysis and backtesting. Right now, 2 trades and considering the timing relative to the S&P500 just looks like luck.

Here is a PM sent to me by bwo:

"Sorry, spinn, I forgot who I was talking to. You have a lot of work to do, and I'm very surprised you even posted a medallion with that low of a c2 rating. You can debate however you want whether the rating means anything, but I know it's a mark of an amateur to be that low on the scale. No offense."

Dude you just do not get it. I do not care about C2. Maybe it is good, maybe it is a waste of my time, I do not know. I am not going to pay to post my calls in the hopes of gaining a small flock of admirers.......I am too busy trading my account.

When I created that account I thought I could post calls for a while without paying.

I realized a long time ago that trading my own account is more profitable than selling calls.....unless your method loses 15% per year.

 

[bwolinsky]

Quote from spinn:

Here is a PM sent to me by bwo:

"Sorry, spinn, I forgot who I was talking to. You have a lot of work to do, and I'm very surprised you even posted a medallion with that low of a c2 rating. You can debate however you want whether the rating means anything, but I know it's a mark of an amateur to be that low on the scale. No offense."

Dude you just do not get it. I do not care about C2. Maybe it is good, maybe it is a waste of my time, I do not know. I am not going to pay to post my calls in the hopes of gaining a small flock of admirers.......I am too busy trading my account.

When I created that account I thought I could post calls for a while without paying.

I realized a long time ago that trading my own account is more profitable than selling calls.....unless your method loses 15% per year.

Whatever, you completely missed the point that it doubled the year prior, and you've shown a real lack of understanding for trading, and, especially to pairs trading. And now, everyone will know you're one of the worst vendors on c2. Congrats. I was trying to help you, but I guess you're too busy blowing up $2,000 accounts.

Bullshit your trades only last 1-3 days. The last two trades have averaged 19 days, so you're lying about your system, which is to say, you don't have one. You have holding and hoping.

You're the typical ET wannabe that thinks he knows how to trade. Then when they come to c2 they find out they don't know how. What's more, you don't even know that you don't know how to trade, and that's what's even more bothersome.

If we increase 3% on Monday, I'll most likely be going short on Tuesday. I'd suggest you take your profit before the decline.

Losing more than 100% of an account, and 60% of another account tells me you don't know what you're doing. Being down is one thing, but it's a question of how much? You're other two accounts tell me you don't have any clue how to trade, or you would have not blown them up to the extent that you did. And you can own up to it. Here, when I tried adapting the system two years ago with SDS, SSO, MVV, MZZ, DDM, and DDS, I found these didn't have the same directional moves as QID and QLD. QID and QLD then became my bread and butter to take the grave knowing how to trade. I do have a price for that system. I'm sure I'm not the only one that's made that observation.