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Random Rants and Market Ideas by Brandonf
- Thread starter Brandonf
- Start date
Quote from coolweb:
.3%?
How does that equate to 70k losts per trade hehe
I guess I misread your question. I thought you were asking what % of my capital I risk on a trade. If you are asking how much room I give a stock it is variable, but generally not more than 6%. When I take a loss though it costs me about 1/3 of 1% of the value of my accounts.
Brandon
Quote from Brandonf:
yes, I think if you are trading large amounts of money you need to be able to play with the big picture in mind, and to me "the chart says so" is not a good enough reason to justify risking the money that a loss on a full size position would cost me.
Brandon
Someone, some where said "The chart shows the footprints of the smart money"or something along that line.
Too many people have access to the information, and the opportunity to act on it before it becomes news.
How does the size of your trade influence the risk you are willing to take.
You will be happy to know that Amanda Jean came into the world Thursday without too much trouble. A little early, so she will be in the hospital for a few weeks so that her lungs can develop, but for the most part Mom and Baby are well. It was a nerve wracking few days for everyone and I'm glad it's over. So many of you responded and I must thank you all.
Moving on, there is a damn woodpecker attacking my roof! I don't know what his thing is, I have a concrete barrel tile roof, but all the sudden I keep hearing this machine gun otu there above the office. I go look and see a woodpecker wood pecking away at my roof. I scream at him and he flies away to a palm tree and gives me the evil eye. Twenty minutes later the process repeats only this time I swear he is just giving me the finger. Here I thought being a successful trader would get me RESPECT, but at least in the woodpecker world it don't mean a damn thing! Just call me Elmer Fudd.
In the equities market Christmas comes four times a year, it's called earnings season. Earnings season jumps off in full swing next week and this one is looking like it will be a good one. I saw that because we have not had too many companies out there confessing there sins the last few weeks, and that should be a good sign. How I approach earnings season is to watch the reaction of the stocks, that tells you everything you ned to know. That a report appears good or bad to me is not the most meaningful thing, the most meaningful thing is how the market reponds to that report. What I like to see is a stock gap up a lot on the earnings news and then build a nice base. Once that base is built a breakout provides an excellent buying opportunity. Look at a current chart of Jabil Circuts for an example of this setup.
I think that Asia (specifically Thailand (TTF), Japan (EWJ, JOF) and Korea (KF) are going to be major upside themes. I also think that the secular bull market has resumed in oil stocks, though I am a little worried about volume there.
Finally retail stocks. They came out with a bit of bad news yesterday, however as a group they acted relatively well. This is always something worth noting, when the market shrugs off bad news it is very often a sign of good things under the surface. MW is an example of a very nice looking retailer.
Trade well
Brandon
Moving on, there is a damn woodpecker attacking my roof! I don't know what his thing is, I have a concrete barrel tile roof, but all the sudden I keep hearing this machine gun otu there above the office. I go look and see a woodpecker wood pecking away at my roof. I scream at him and he flies away to a palm tree and gives me the evil eye. Twenty minutes later the process repeats only this time I swear he is just giving me the finger. Here I thought being a successful trader would get me RESPECT, but at least in the woodpecker world it don't mean a damn thing! Just call me Elmer Fudd.
In the equities market Christmas comes four times a year, it's called earnings season. Earnings season jumps off in full swing next week and this one is looking like it will be a good one. I saw that because we have not had too many companies out there confessing there sins the last few weeks, and that should be a good sign. How I approach earnings season is to watch the reaction of the stocks, that tells you everything you ned to know. That a report appears good or bad to me is not the most meaningful thing, the most meaningful thing is how the market reponds to that report. What I like to see is a stock gap up a lot on the earnings news and then build a nice base. Once that base is built a breakout provides an excellent buying opportunity. Look at a current chart of Jabil Circuts for an example of this setup.
I think that Asia (specifically Thailand (TTF), Japan (EWJ, JOF) and Korea (KF) are going to be major upside themes. I also think that the secular bull market has resumed in oil stocks, though I am a little worried about volume there.
Finally retail stocks. They came out with a bit of bad news yesterday, however as a group they acted relatively well. This is always something worth noting, when the market shrugs off bad news it is very often a sign of good things under the surface. MW is an example of a very nice looking retailer.
Trade well
Brandon
Quote from Boib:
Someone, some where said "The chart shows the footprints of the smart money"or something along that line.
Just because someone, some where said something does not make it the be all and end all. That said I would not trade without charts, they are important, but they are only one part of the picture
Brandon
This will be fast. Right now the market is looking like hell, and everything looks terribe. Breadth is bad, interest rates are above 5%, Iran has nukes, the Congress cant get the tax cut extended, and I stubbed my toe. But, thats how markets often look. A lot of the market is just in a range, and we are now at the bottom of the that range, and until that is no longer the case Im not going to assume there is a trend.
That said last night I spent my time looking to isolate relative strength, which was pretty easy to do given how weak the market has been. A few names I will be focused on include CAT, MOT, CMCO, GEOI, DRQ, CWTR, NFLX, RHAT, VAL, and AVNC.
That said last night I spent my time looking to isolate relative strength, which was pretty easy to do given how weak the market has been. A few names I will be focused on include CAT, MOT, CMCO, GEOI, DRQ, CWTR, NFLX, RHAT, VAL, and AVNC.
Put up or shut up is a pretty common request here on ET, at least it has been towards me over the last several years as I was posting here on ET and running a chatroom. As anyone @ mainstreet knows I have pretty much not been involved in the chatroom business now for about a year and do not currently offer any subsription products, nor do my plans call for doing so in the future. At any rate, I have been managing money for some time and am very happy wtih my results. I have been catering my program to qualified investors who want consistant returns without much volatility. I have done this using the methods I taught to people for 8 years @ TFMS and just pretty much doing what I talk about here. In any event, here is the graph of my trading thus far this year (as of the 18th, Im up slightly more now)
http://www.elitetrader.com/vb/attachment.php?s=&postid=1044049
One idea that I am playing around with is that the equity curve actually charts well. I go sideways, form flags, breakout etc. So, on a seperate account I am playing around with the idea of reducing size when i start to flag, then increasing it when I breakout. If this produces a nice increase after a year or two of doing it I will start to incorporate that into my client accounts as well.
My performance for the year has been 9.13% in Jan, 1.85% in Feb, 1.48% in March and 3.22% in April as of the 18th. My worst loss occured on March 31st when I had a 1.5% down day, my second worst Jan 18th when I was down 1.18% and my third worst was March 30th with a loss of 0.42%. Just slow and steady, which is what I am trying to do. Im shooting for 20-30% per year with no drawdowns in excess of 7%,(my biggest quarterly loss was 0.85%) something I have thus far done since I started the fund a few years ago.
Anyway, I just wanted to post this because for a long time people have questioned my ethics, ability and integrity simply because for some period of time I ran a "guru" business. I'm sure that for many people they will say oh this return sucks, its only around 16%, I can do that in my sleep..thats fine, if you can do it in your sleep with any real amount of money than very soon Bill Gates will be looking over his shoulder as you close in on him.
Anyway, I will still be here as I enjoy it for the most part ,and again here is the link to the graph.
http://www.elitetrader.com/vb/attachment.php?s=&postid=1044049
One idea that I am playing around with is that the equity curve actually charts well. I go sideways, form flags, breakout etc. So, on a seperate account I am playing around with the idea of reducing size when i start to flag, then increasing it when I breakout. If this produces a nice increase after a year or two of doing it I will start to incorporate that into my client accounts as well.
My performance for the year has been 9.13% in Jan, 1.85% in Feb, 1.48% in March and 3.22% in April as of the 18th. My worst loss occured on March 31st when I had a 1.5% down day, my second worst Jan 18th when I was down 1.18% and my third worst was March 30th with a loss of 0.42%. Just slow and steady, which is what I am trying to do. Im shooting for 20-30% per year with no drawdowns in excess of 7%,(my biggest quarterly loss was 0.85%) something I have thus far done since I started the fund a few years ago.
Anyway, I just wanted to post this because for a long time people have questioned my ethics, ability and integrity simply because for some period of time I ran a "guru" business. I'm sure that for many people they will say oh this return sucks, its only around 16%, I can do that in my sleep..thats fine, if you can do it in your sleep with any real amount of money than very soon Bill Gates will be looking over his shoulder as you close in on him.
Anyway, I will still be here as I enjoy it for the most part ,and again here is the link to the graph.
Attachments
Quote from maxross:
Brandon,
congratulations on the great performance ytd. Are you managing a hedge fund or just individual accounts? And what kind of fees do you charge?
Thanks.
Long term my goal is and always has been to have and manage a hedge fund. However at this time the costs outwieght the benefits of that type of structure for me. My accounts are all setup as seperatly managed accounts. I think its a pretty neat structure. There is a master account which is what I trade off, and then each persons individual account is attatched to the master account. If I have say $100,000 total in 10 accounts that are each $10K each account has 10%. Say I buy 500 shares of a stock, I will execute it off the master account, but the software will immediatly allocate the 500 shares to each account based upon their capital, so 50 shares each.
The seperatly managed structure allows me to reduce my expenses greatly, and it also provides a lot of transparancy to the account. I don't have any access to the capital at all, unlike a hedge fund, and you can see each and every day exactly what is being held, what has been bought or sold and how much capital you have. This means that I don't have to pay for an auditor to varify the results I tell you we get-because you can see it each day for yourself.
The fee's I charge are a bit variable. Most hedge funds and seperate accounts work on a 2/20 or 1/20 basis for the most part. So, 2% of assets under managment are paid, win lose or draw, and then 20% of profits. My payment is only based upon incentive. I charge a 22.5% incentive on accounts under $250k and a 20% incentive on accounts above $250k. Payment is made quarterly above a high water mark, so payment is only made on new profits.
The chart I have posted shows the results after a 22.5% fee has been taken out.
Brandon