Quote from d08:
Those results are not amazing in relation to the drawdowns.
Very good but not close to a holy grail as true holy grail signals would never be available for sale.
Madoff was a fraud.
4% drawdown and 40% annually for 10 years is a fraud. You might see 3-5 year records like that, but pure ponzi scheme if it's older than that.
I've seen drawdown all the way to 2% at my size, get over 20%, and scaling up you get to Madoff, but any more or any less drawdown or whatever your figure is I believe in using 100% of my margin for futures and ETF trading.
Just try designing a portfolio that doesn't lose more than 50% at a 100% margin to equity ratio. I bet you can't, but we're like 40% on 1,000% annually in our backtests, and we just need a few more analyses before we can make the call between what 1 more contract on futures can get us versus the other strategies. I have that, and no matter what there's so few people that do it that way if you're not making 100% every 6 months it's just not worth it to invest your time not earning an income at a regular job if your goal is to attract tons of subscribers, ad infinitum if you're trading futures.
So what's the problem? Nobody except me uses 100% of their margin and gets less than 50% drawdown. I actually get 40% for that 2 year $3.8 million on 33,000, so it's not like I'm saying it's not risk free. It isn't at all. Futures trading is the riskiest investment you can ever make, but if you've come to trust the professionals of your managed futures portfolio, and they trust their managers, they will do everything they can to earn a good return, then it's not just a good return they want but a stupendous one, and that's primarily what I've been working toward for years. Now I'm there, and if it doesn't work out there's no other outlet for me. Failure's not an option, but since I'm in the midst of doing it and it's working I don't see anything wrong with approaching my trading for max return. Max risk anyway you cut it is still 100%. Period. It'll never be any less than 100% risk every time you even begin to think about opening a futures margin related or managed futures account. So why not use all of it as it is, which is trading capital?
It's not like there's no risk. 50% drawdown anything can be argued as too risky. 20%, 10% and 2% per trade is also too risky for some people, but if it's not recognized that in order to get returns like that nearly all of your margin must be deployed <b><i>efficiently</b></i> then the rest is on the professional managing the model, and I completely understand incredulity, but it's not like I'm trying to lie about whether I'm actually getting those returns, that's just what I'm basing my assumptions on, and even if the assumptions are half as good (glass half full) and the drawdown is underestimated I think it'll still be worth it.
