HuggieBear's Thread of Public Shame

Time for another update:



Even though it's been more than a month since "The Calamity", the burn is still fresh in my mind. After suffering more or less a complete loss of control and calamitous losses at the hands of CL in May, I have radically altered my investing strategy.

First, here is an image of my P/L for the year (at bottom)....the damage i did in May is well evidenced by this chart. My June has been a bit better than shown, as I have several winning positions open that aren't reflected.




My revised goals for the remainder of the year are simply two fold:


1) Outperform the S&P 500 avg

2) Finish 2010 profitable

3) Maintain low volatility (within reason)


To achieve the above, I've adopted the following strategy:

- 50% of my portfolio is invested in a long only ETF system that, essentially, stays long when the market is above its 45-week SMA

- 25% of my portfolio is following DecisionMoose

- 25% of my portfolio is being used for swing trading and hedging, at market extremes mostly


This is essentially a "not-very-active-trading" strategy, and I believe if I adhere to it the rest of the year I will definitely achieve #1 above and probably achieve #2.

I have concluded irrevocably that I can not actively trade in the manner I was up to this point while working full time, therefore I'll be pursuing this or other less active strategies from this point on. Obviously, any gains I achieve are going to be far more muted, but that's life. The most important thing at this point is to adhere to a well defined system, and hopefully achieve my primary goals.



I am currently up 7% on the year, and am in a massive drawdown after having been up 85%+. However, I swung to a 40% loss on the year at one point intraday, so +7% is ok.


I will continue to post infrequent updates on my progress against the key goals above....
 

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sounds great plan. but do not get the symptom of "bitten by a snake, 10years even afraid of a rope shadow".
I lost 5k in crude that day, but I gained 18k in NQ that day in five minutes. I first panic and dump my crude, but saw the abnormal activity broadly, particularly my favorite stock index NQ (dropped almost 10%, feel "what the hell going on", bought 9contracts, I saw my P/L goes up rapidly, in one second I almost dump when it hits 10k, thought I made 5k less that 5k, but I was frozen not greedy, and my P/L keeps going up quickly, when my mind back to logic, 18k gee, immediately put it on sell, in the quick action, even accidently entered a short, immediately lost several points, saw the red, felt odd and like a punished pubby, almost want to punch my screen[where is my 18k?I start to blame my no action],finally realized I sell 10lot (thought bought 10lot) entered a short, even do not know which button to hit, but good, out ).
that day made me mature more, learned rogue trading style(averaging down, fighting with the tape, I do not intend to do averaging down, I try to learn to do averaging up, now I forget about averaging trading, that is hard to do) is very bad, if wrong one time,totally wiped out. and the most important is I need a detailed trading plan.

so I start to focus on playing the market with strict stop loss, pay particular attention at entry, zoom in on the entry very accurately within 10ents in crude, also I reduced my trading size significantly.

I just trade 1lot crude now, 2lot NQ/ES.

I made the mistake that day is caused by my illusion: I traded QM that day, my purpose is try to do averaging up (end up with averaging down), I never toke QM seriously, 2points drop in my mind is just 1k, so I did not guide my loss thrashold strictly. very pleasantly added more QM in my basket, felt "QM is nothing, not risky not at all". in reality, if wrong, anything even tiny 1share is deadly.

I just want to share it with you my lesson. in the market anything can happen. I found you start to think ETF is not deadly. bear in mind, when you start to open any trade, you need a strict detailed plan, where/when/under what condition to get in, how much you want to risk even what method to control the risk (overnight risk is not contrallable by hard stop loss, then what tool to use to control the risk?), when/where/under what condition to get out.

otherwise, the 5/6 loss will not give you any lesson or value. do not chicken out, you just need BULL /BEAR nerve with a plan. a bull/a bear without a plan is a pure gambler. then beats the S/P 500 index is a piece of cake!













Quote from HuggieBear:

Time for another update:



Even though it's been more than a month since "The Calamity", the burn is still fresh in my mind. After suffering more or less a complete loss of control and calamitous losses at the hands of CL in May, I have radically altered my investing strategy.

First, here is an image of my P/L for the year (at bottom)....the damage i did in May is well evidenced by this chart. My June has been a bit better than shown, as I have several winning positions open that aren't reflected.




My revised goals for the remainder of the year are simply two fold:


1) Outperform the S&P 500 avg

2) Finish 2010 profitable

3) Maintain low volatility (within reason)


To achieve the above, I've adopted the following strategy:

- 50% of my portfolio is invested in a long only ETF system that, essentially, stays long when the market is above its 45-week SMA

- 25% of my portfolio is following DecisionMoose

- 25% of my portfolio is being used for swing trading and hedging, at market extremes mostly


This is essentially a "not-very-active-trading" strategy, and I believe if I adhere to it the rest of the year I will definitely achieve #1 above and probably achieve #2.

I have concluded irrevocably that I can not actively trade in the manner I was up to this point while working full time, therefore I'll be pursuing this or other less active strategies from this point on. Obviously, any gains I achieve are going to be far more muted, but that's life. The most important thing at this point is to adhere to a well defined system, and hopefully achieve my primary goals.



I am currently up 7% on the year, and am in a massive drawdown after having been up 85%+. However, I swung to a 40% loss on the year at one point intraday, so +7% is ok.


I will continue to post infrequent updates on my progress against the key goals above....
More...
 
Do what you gotta do. If you cant dedicate the screen time than your gonna get burned trying to scalp/daytrade. I bet you do 100% this year if you don't push swings. Wait for the pattern or setup and get in, Don't forget the s/l .. Good luck
 
Quote from Speciaul_K:

Do what you gotta do. If you cant dedicate the screen time than your gonna get burned trying to scalp/daytrade. I bet you do 100% this year if you don't push swings. Wait for the pattern or setup and get in, Don't forget the s/l .. Good luck
More...



Thanks for the vote of confidence. I will probably move to 100% swing trading at the end of the year if I can just execute this system and hit my targets. Right now its more important for me to demonstrate that I can stick to a plan, keep my drawdowns low, and demonstrate consistent profitability than it is to achieve big gains. Even though it is bothering me like hell that I'm only up 7% after being up 85%.

The problem is I have two drawdowns this year, one at 25% and now another of 60%. This is obviously unacceptable and is primarily related to lack of discipline (mostly caused by day trading with too many distractions).

Over the next 12 - 24 months I'm expecting to hopefully acquire a capital base of 7 figures+, and I need to ensure prior to that a rock-solid ability to control these drawdowns. What feels like an amputated finger now is going to feel a lot more like a mortal wound then.

Like you said anyway, if I'm correct about my ability, i should be able to still kill it this year swing trading. Might not hit 100% since I'm only using 25% of my portfolio, but i think there is still a possibility of making 25% - 50% with the strategy. Particularly if we end up with an up-market the rest of the year. If the market goes down, my gains are going to be muted but I should outperform in a big way.


The whole thing rather sucks because I did feel like I was doing relatively well trading CL with pretty consistent profits week after week:

1276969303.jpg



However, i just really let a legitimately bad loss get completely out of control .... i definitely earned and deserved about a 25k loss, as the style and approach I was using was going to encounter that type of loss occasionally. However, I let 25k turn into something a whole lot more ridiculous....25k would have long been made up for by now, but it's going to take me a long time to work off the drawdown i'm currently in.

CL will be a beast I will have to come back and tackle when and if I can focus on this full time....
 
trader198, you are definitely right that i've been "bitten"...i will be "trading scared" for a while...agree with all your points though. thnx
 
Actually, no i didn't. I got through probably the first two-thirds but didn't finish for some reason.


That reminds me, going to go back through it from the beginning now to see if I can pick up anything useful for swing trading. I was mostly looking at it from an intraday basis before.
 
Quote from HuggieBear:

CL will be a beast I will have to come back and tackle when and if I can focus on this full time....
More...

Glad to see you're up for the year and 7% halfway through the year is a solid return!
 
Thanks...you are always so positive :)


Being up 7% is what keeps me from being totally morose.


However, i've racked up 40k (or about 25%) in transaction fees in the process, and suffered a 60% drawdown. I could have spared myself a lot of stress just being long the SPY and giving up 3% or so (or thereabouts). Big volatility and costs to get to that 7%....hahaha



Anyway, must look at the bright side. I am confident I will be celebrating on 12/31 a successful year with goals well-met ;)
 
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