raising funds

[Martinghoul]

Quote from traderwann:
I don't know how long, if you look back to the original question that should be clear. Years may seem right if you're at a bank or other blue chip type environment. All this seems to be avoiding the issue and questions at hand though.

No, it's not avoiding the issue and the questions at hand. Do you think it's coincidence that, in an institutional context, it takes quite a long time to train a good trader or, in fact, conclude that a person is any good? I am just providing you with a benchmark.

You're starting the same illogical pattern: ask no questions, just assume it can't be true based on not giving any opportunity to show it is! You're pulling my leg yes? Same question, around and around we go: what do you need to prove it? Then, how do you find sufficient funds to prove it live? Then what? Etc..

I have asked a lot of questions, actually. None of which you're able to answer conclusively, given how short your observation period is. And of course I assume that it can't be true, just like anyone with a modicum of experience in this game will. More accurately, it's not that it can't be true, but rather the odds of it being true are so low that it amounts to the same thing.

Are you equally skeptical of all discretionary traders or just this specific situation because the returns are (so far and will go down) stated as being top tier? I thought the whole definition of discretionary means it is NOT mechanical, which also means it can't (usually, often) be coded or else it would then become mechanical, not discretionary. The fact that I'm pointing this out to you worries me.

I am equally skeptical of all traders that can't demonstrate basic performance characteristics that show some degree of statistical significance. The returns don't matter, really, although they can serve as a warning sign. And I know the difference between mechanical and discretionary, although I didn't realize you were doing the latter. However, for a prospective investor that hardly matters, as the requirements are likely to be very similar. A discretionary trader, unfortunately, doesn't have the luxury of using backtests for everything.

I could offer you an analogy that would illustrate what I am trying to say, but I don't think you're particularly receptive to my message. Which is perfectly fine. Maybe sle and/or heech can contribute something that is more to your liking. Regardless, I wish you the best of luck.

 

[asap]

Quote from traderwann:

I don't know how long, if you look back to the original question that should be clear. Years may seem right if you're at a bank or other blue chip type environment. All this seems to be avoiding the issue and questions at hand though.

You're starting the same illogical pattern: ask no questions, just assume it can't be true based on not giving any opportunity to show it is! You're pulling my leg yes? Same question, around and around we go: what do you need to prove it? Then, how do you find sufficient funds to prove it live? Then what? Etc..

Are you equally skeptical of all discretionary traders or just this specific situation because the returns are (so far and will go down) stated as being top tier? I thought the whole definition of discretionary means it is NOT mechanical, which also means it can't (usually, often) be coded or else it would then become mechanical, not discretionary. The fact that I'm pointing this out to you worries me.

I didn't get to trade before 10:30 today but I managed to squeeze out just over $1500 with max 5 contracts, 2 trades used all 5, few other trades used a couple. Worst inter-trade drawdown was maybe a few thousand, I don't recall as I was managing multiple positions in 3 different markets at the time. I can probably scale down what I'm doing but it's more stressful and actually means more risk in some ways, perhaps less in others but I'm not seeing it yet.

sorry to bring up lousy news.

i think you'll soon find out about the law of large numbers.

your style of trading doesn't have any edge.

you are just experiencing a winning streak and sooner or later the market will teach you a painful lesson.

 

[traderwann]

Quote from Martinghoul:

No, it's not avoiding the issue and the questions at hand. Do you think it's coincidence that, in an institutional context, it takes quite a long time to train a good trader or, in fact, conclude that a person is any good? I am just providing you with a benchmark.

If it's not avoiding then I will get an answer soon, it's not always conscious either. So which is it, does it take that long to train or to conclude? I don't think training applies and I don't think it takes that long to conclude, but you can confirm and re-answer maybe?

I have asked a lot of questions, actually. None of which you're able to answer conclusively, given how short your observation period is. And of course I assume that it can't be true, just like anyone with a modicum of experience in this game will. More accurately, it's not that it can't be true, but rather the odds of it being true are so low that it amounts to the same thing.

If I can't do something because it is beyond my control (simulating discretionary strategy) that doesn't help anyone to punish me for it, or base assumptions on that fact. I can't help it if you insist on assuming things when being offered evidence. Once again, if what I offer so far isn't good enough then what is. I am being serious here, I know its hard to believe. Yes the return will change, is it likely to fall to 5 - 10% annual? I don't see how you can conclude that objectively, you HAVE TO factor in things that will make it likely for EVERYONE no matter what. Without doing that, I just don't get your logic or reasoning. You do realize factors which make everything the same aren't useful right? I'm just thinking this through this, trying to make sense from A to Z. If I'm missing something, please show me. If not, are you able to change your analysis to fit what's actually happening, not what 'should be but isn't' (can't think of a better way to phrase it)?

I am equally skeptical of all traders that can't demonstrate basic performance characteristics that show some degree of statistical significance.

I can certainly demonstrate them. If you wish to calculate them for me they will be done as soon as you are. I have nothing to hide and only something to learn! Please try looking at this from BOTH SIDES, look at it as if I am deceitful AND as if I'm telling the truth. It's quite unfair otherwise, regardless of how many idiots post on here. I'm talking about me, not them. Please analyze this specific situation and only include relevant outside details that won't unfairly bias your analysis.

I know the difference between mechanical and discretionary, although I didn't realize you were doing the latter. However, for a prospective investor that hardly matters, as the requirements are likely to be very similar. A discretionary trader, unfortunately, doesn't have the luxury of using backtests for everything. I could offer you an analogy that would illustrate what I am trying to say, but I don't think you're particularly receptive to my message. Which is perfectly fine. Maybe sle and/or heech can contribute something that is more to your liking.

If you know then I was confused why you were talking to me like I was doing something mechanical after I told you it was discretionary. That is what lead to that last comment. Please don't confuse trying to make sense of what you say with not being receptive. I can only receive what I understand. As I just explained, you aren't always clear. This has nothing to do with "my liking". I like what works. Still trying to figure that out fully.

 

[traderwann]

Quote from asap:

sorry to bring up lousy news.
i think you'll soon find out about the law of large numbers.
your style of trading doesn't have any edge.
you are just experiencing a winning streak and sooner or later the market will teach you a painful lesson.

Lousy news is good news if it makes sense, I have no vested interest in being wrong nor in denying reality.

"According to the law, the average of the results obtained from a large number of trials should be close to the expected value"

What is the expected value, please enlighten me. I have no idea. I have said the results have a 99.9999999% (you get the point) of dropping to being more realistic. What is realistic here? What is the expected value and how can you know without being a futurist, psychic, etc?

"The LLN is important because it "guarantees" stable long-term results for random events."

Right, so people that are top tier performers, verifed tried tested true and all that, written books, audited, and anything else you can think of. All exceptional people in history ... they got a waiver from the guarantee? What exactly is this saying or are you saying? I quickly skimmed the page as a refresher and I didn't see your point at all. BTW, was the waiver like one of the Paulson waivers where he gives it to himself or did it come as a cereal prize box?

You can't know what my trading style is but you already know it does not have an edge?? Really, are you omniscient or something? How the heck did you figure that one out? Yes sooner or later the results will go down, there's a 99.9999999999999999999999999% chance of that. That's been said from the beginning, so what's your point?

 

[heech]

Quote from traderwann:

What is the expected value, please enlighten me. I have no idea. I have said the results have a 99.9999999% (you get the point) of dropping to being more realistic. What is realistic here? What is the expected value and how can you know without being a futurist, psychic, etc?

Well, there's your answer right there. Investors won't put a dime in you until they know your long-term expected value. The amount of time needed to attract money, is exactly the amount of time needed to (with some reasonable sampling error) calculate that number. If YOU don't know it, then certainly an investor wouldn't know it, and they won't invest.

If you're a discretionary trader, then 12 months is absolutely not remotely enough time time... (especially when you're asking the investor to ignore your previous trading record "which needs improvement" and just focus on the previous month). If you're not able to back-test systematically, then I'd suggest live trading of an account (not hypothetical/simulated) for 36 months.

I think this thread is quickly running out of usefulness. Pretty obviously you don't like the answers you're getting, even though they largely reflect reality.

 

[oilfxpro]

Quote from heech:

traderwann, I think you are taking his comments too personally. His conclusion is correct, although he wasn't generous in sharing his logic. No one is going to invest in a strategy that returns "6-15% a month" on the basis of 30 days of hypothetical trading. There is literally nothing of value there. It would take minutes for most of us to generate a curve fit strategy that happened to return 6-15% over the previous month... hard part is finding a strategy for the next month!

Backtest in- out- sample with 5-10 years of data. Generate numbers on worst daily/monthly drawdown, generate Sharpe/Sortino numbers on a rolling 6, 12, 36 month basis. Then if you are charming, have great credentials, and a fair amount of luck... You will find a gambler ready to take a small position in you. Trade that effectively for 3-5 years live, and you will start to find other investors starting to take a serious look at you.

Back tests are pretty useless cause there is no psychology tested i.e discipline ,fear ,greed , natural reaction to losses and many other personality traits of the individual. 20 % is trading and 80 % is psychology , so who is going to invest based on 20 % testing. The 80 % gets tested only with real money.

 

[heech]

Quote from oilfxpro:

Back tests are pretty useless cause there is no psychology tested i.e discipline ,fear ,greed , natural reaction to losses and many other personality traits of the individual. 20 % is trading and 80 % is psychology , so who is going to invest based on 20 % testing. The 80 % gets tested only with real money.

Yes, backtests are pretty useless for non-systematic traders. That might make it "unfair" for discretionary traders, but facts remain the same. You need many years of great, live trading results to attract serious money.

 

[oilfxpro]

Quote from heech:

Yes, backtests are pretty useless for non-systematic traders. That might make it "unfair" for discretionary traders, but facts remain the same. You need many years of great, live trading results to attract serious money.

Back tests are pretty useless also for systematic traders, especially when the systems are average.No system will survive the test of time , if systems are profitable they will lose their edge with more users.

 

[traderwann]

Quote from heech:
If you're not able to back-test systematically, then I'd suggest live trading of an account (not hypothetical/simulated) for 36 months.

I think this thread is quickly running out of usefulness. Pretty obviously you don't like the answers you're getting, even though they largely reflect reality.

LOL. It's funny when something doesn't make sense, or certain questions remain unanswered the perceived reality is that "I don't like it", but reality isn't that it doesn't actually make sense and questions are actually left unanswered.

In 36 months of live trading I wouldn't need any further funds or the strategy doesn't work, either way irrelevant right? This is why questions are left unanswered but are perceived as me "not liking" the answer. A non-answer is given, I try to make sense of it, no clarification is received back, and then I am perceived as having an emotional problem. This is quite unreasonable!

**It still comes down to this: let's assume I have 2 solid months of simulated data with noteworthy double digit returns, what does a person do to exchange that talent with someone who needs that talent? Previously it was suggested to go get $100k and trade live and then solicit more money with those results (probably wouldn't need to if can scale down but cross that bridge later). Where, how, from who, and when to get that seed capital? Only a portion of this is actually at risk since any changed from the previous trend would halt live trading to re-assess. Let's say it's a $10k - $20k write off bet out of $100k before pull plug to re-asses. This from someone who when they see good returns has enough capital to fund $2M BP. They must have a lot more funds than that to be giving me $2M, I dunno just to throw some numbers out that's gotta be less than 0.05% of total capital, maybe less than half that or more.

Here's the deal if someone comes to me and I have that kinda cash. I say prove it. They bring something. I attack it and shred it and ask for more. I get it. Fine. I'm satisfied. I say, go do it once and let me see. It happens. Ok, now I have real decision to make about how much leeway to give for try #2. Each profitable on target day trade decreases risk capital by 5% - 10%, each trade about 1% - 2%.

I just don't think these answers I'm getting are the full picture. All that matters in the end are results. Yes, I am simplifying this on purpose, there would be more steps, but not 12 - 36 months worth is the point!!!

If there's no way at all to go about doing this then there's an opportunity to make it happen, who are the right partners with a vested business interest?

Cmon, none of this can reasonably be called "not liking" an answer. Since when is giving suggestions, thinking critically, thinking outside the box, etc equivalent to "not liking" what person says?!

 

[heech]

Quote from traderwann:

LOL. It's funny when something doesn't make sense, or certain questions remain unanswered the perceived reality is that "I don't like it", but reality isn't that it doesn't actually make sense and questions are actually left unanswered.

In 36 months of live trading I wouldn't need any further funds or the strategy doesn't work, either way irrelevant right?

The answer makes perfect sense, you just don't like it.

You might believe that "in 36 months of live trading you wouldn't need any further funds" and therefore waiting that long is "irrelevant", and you might even be ultimately right about your "talent"... but no one living outside of your skull is going to take your word on that. Period.


Two months of double-digit returns is completely unconvincing to me. 12 months of double-digit returns (er, triple digit compounded at that point) is still completely unconvincing to me.

So, go trade 36 months, blow the target out of the water with minimum draw-down, and maybe someone like me would think about giving you some of my hard-earned money. And I say this as someone who's not particularly risk-averse... I have about $5 million invested in various higher risk ventures, including startup hedge funds (including my own) + seeding technologies companies as an angel.