How to never get an account wiped out?
- Thread starter gg12
- Start date
Spectre2007
Thank you for your compiled list. My answers/questions are inline:
1) Dont bet against the Linear Regression Slope (long term) and short term.
Agree. But what is short and long term?
10 days vs. 1 year?
2) Bet with the LR slope when both LR (long term and short term) are pointing in the same direction.
That means only going long i.e. in the Dow?
3) Wait for a retracement on your entry calculated to be in the Linear Regession standard deviation channel.
Which standard deviation (calculated on which timeframe)? ATR?
3) Place stops according to charts, near support and resistance. But not at those levels. A few units away.
Hear that often! What about Turtle Soups setups?
4) Let the TP be faraway. Let the winners ride.
What is far away? Does that mean (practically) no Take Profit Targets at all? What if the profit melts down and you have some emotions attached on that?
5) Look for timed price progression, meaning take a staggered view on prices and see if progression is taking place.
Could you please explain further?
6) Risk 1% or less on a stop loss of account equity.
No Kelly optimization? Don't you risk to grow too slowly?
7) Have the Macro economic scenario in your favor.
Does that mean currently - only go long?
8) Have other markets correlate with your trade.
Fully accepted!
9) Dont step away, unless you've defined your risk exposure.
Here I have problems. I need to risk a 90 to get 10 (see my last post).
Thank you for your compiled list. My answers/questions are inline:
1) Dont bet against the Linear Regression Slope (long term) and short term.
Agree. But what is short and long term?
10 days vs. 1 year?
2) Bet with the LR slope when both LR (long term and short term) are pointing in the same direction.
That means only going long i.e. in the Dow?
3) Wait for a retracement on your entry calculated to be in the Linear Regession standard deviation channel.
Which standard deviation (calculated on which timeframe)? ATR?
3) Place stops according to charts, near support and resistance. But not at those levels. A few units away.
Hear that often! What about Turtle Soups setups?
4) Let the TP be faraway. Let the winners ride.
What is far away? Does that mean (practically) no Take Profit Targets at all? What if the profit melts down and you have some emotions attached on that?
5) Look for timed price progression, meaning take a staggered view on prices and see if progression is taking place.
Could you please explain further?
6) Risk 1% or less on a stop loss of account equity.
No Kelly optimization? Don't you risk to grow too slowly?
7) Have the Macro economic scenario in your favor.
Does that mean currently - only go long?
8) Have other markets correlate with your trade.
Fully accepted!
9) Dont step away, unless you've defined your risk exposure.
Here I have problems. I need to risk a 90 to get 10 (see my last post).
Best advice I have read in years.
Get your win/loss over 80% and your vol will grow.
Then put the screws on your Broker for better pricing and lower margins to keep your account size low relative to your daily profits.
Dont leave a dime more in your account than is required as somehow you will lose it.
RoughTrader
Thanks. I have googled for 'fixed-fractional money management'.
Very Interesting. The first entry is:
http://www.tacticaltrader.ca/commentary2.htm
Thanks. I have googled for 'fixed-fractional money management'.
Very Interesting. The first entry is:
http://www.tacticaltrader.ca/commentary2.htm
The 'staggered view' approach, its basically the idea of looking at the forest versus the tree's. You put a low leverage trade on, with a 1% stop loss on equity in place, and leave it alone.
Or you dont put any trade on, and just monitor the markets intermittently. The derivative your watching, should create either a bullish or bearish pattern, and you just go with it, with a minor bet, and leave it lone, see what happens, and then pyramid into it as the trade goes in your favor.
I've been told that some funds just monitor weekly charts versus daily charts.
It takes away the day to day emotional aspect out of trading, and you tend to catch price progression much easier.
Or you dont put any trade on, and just monitor the markets intermittently. The derivative your watching, should create either a bullish or bearish pattern, and you just go with it, with a minor bet, and leave it lone, see what happens, and then pyramid into it as the trade goes in your favor.
I've been told that some funds just monitor weekly charts versus daily charts.
It takes away the day to day emotional aspect out of trading, and you tend to catch price progression much easier.
Here's how I do it (note: I have blown 2 accounts in the past 20 years, but had no MM).
When I am going well, having a good month for example, I will risk up to 5% per trade, pushing the pedal so to speak. I make about a half dozen trades per day. Usually the risk is much lower however. I average around 2.5%
When I am not going well, I cut back on size and risk no more than 2%. This is adjusted each day. For example, given a hypo 100k acct, I'd risk no more than 2k per trade. If I had a shitty day, the next would be 2% risk of a lower number. Therefor, you'd be losing less and less each day, theoretically its impossible to reach zero, but at 10k, I'd say the acct is blown.
In actuality, I wouldn't even risk the 2% if things were crappy, it would end up being 1 contract trades until I was going good again. Or I'd go on vacation and take a break.
Jay
When I am going well, having a good month for example, I will risk up to 5% per trade, pushing the pedal so to speak. I make about a half dozen trades per day. Usually the risk is much lower however. I average around 2.5%
When I am not going well, I cut back on size and risk no more than 2%. This is adjusted each day. For example, given a hypo 100k acct, I'd risk no more than 2k per trade. If I had a shitty day, the next would be 2% risk of a lower number. Therefor, you'd be losing less and less each day, theoretically its impossible to reach zero, but at 10k, I'd say the acct is blown.
In actuality, I wouldn't even risk the 2% if things were crappy, it would end up being 1 contract trades until I was going good again. Or I'd go on vacation and take a break.
Jay
gg12 I probably wasn't being clear enough, I was refering to autocorrelation of your equity curve returns. In other words if bad trades tend to be clumped together and likewise with good trades. An ideal high frequency trading system has zero correlation of trade results and so its drawdowns will be very short in time.
I have made +6.3% today!
... and I have reached 39.75% of my original 100% investment with the closing of today's market.
It was a chaotic sesson for me and I feel that I don't deserve the %-profit. My feeling is that it's all luck (not reproducible) what was happening today. I've had invested my early profits in bets that the Dow will close minus 25 point - and other nonsense I am reluctant to explain ...
Nothing is predictible in my system, repeatable or relyable - just big CHAOS. It's all discretionary and I need to develop a better long term approach. In addition my trading is very time consuming. I spent nealy 5 hours in front of my system. Why? And how long can I do that?
My conclusion is that I need to take more advise from all of YOU. May be I am too stupid to learn myself. I will continue to study the markets and I will be more adaptive in the future.
Thanks a lot for all the great comments from all of you. I am happy to be here and being able to participate in the elitetrader forum. I need to work to improve my behavior radically and suppress EGO and massive GREED; bad habits for trading.
Good luck for all of your endeavors.
... and I have reached 39.75% of my original 100% investment with the closing of today's market.
It was a chaotic sesson for me and I feel that I don't deserve the %-profit. My feeling is that it's all luck (not reproducible) what was happening today. I've had invested my early profits in bets that the Dow will close minus 25 point - and other nonsense I am reluctant to explain ...
Nothing is predictible in my system, repeatable or relyable - just big CHAOS. It's all discretionary and I need to develop a better long term approach. In addition my trading is very time consuming. I spent nealy 5 hours in front of my system. Why? And how long can I do that?
My conclusion is that I need to take more advise from all of YOU. May be I am too stupid to learn myself. I will continue to study the markets and I will be more adaptive in the future.
Thanks a lot for all the great comments from all of you. I am happy to be here and being able to participate in the elitetrader forum. I need to work to improve my behavior radically and suppress EGO and massive GREED; bad habits for trading.
Good luck for all of your endeavors.