Spydertrader's Jack Hershey Futures Trading Journal
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In my opinion you did great! If you do it consistently you're set for life ... So, it may be more important to be consistently profitable, than to try to squeeze more from each trade, which should come with additional risk.
I've quickly made a table (hopefully my calculations are correct) to illustrate how even with minimum profitability (but consistently profitable) money accumulates.
My calculations assume a cost per trade of about 0.6 of a tick, a starting capital of $5,000, no significant drawdown.
If you make on average 1 tick per day you'll make 28% per year.
If you make half a point (2 ticks) per day, you'll double your starting capital in 11 months.
If you make one point (4 ticks), you double in only 5 months.
After that, following Jack's recommendation, pull out your initial capital and continue trading. When you double your capital again move to 2 contracts, and so on ...
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1645404 width=206>
I've quickly made a table (hopefully my calculations are correct) to illustrate how even with minimum profitability (but consistently profitable) money accumulates.
My calculations assume a cost per trade of about 0.6 of a tick, a starting capital of $5,000, no significant drawdown.
If you make on average 1 tick per day you'll make 28% per year.
If you make half a point (2 ticks) per day, you'll double your starting capital in 11 months.
If you make one point (4 ticks), you double in only 5 months.
After that, following Jack's recommendation, pull out your initial capital and continue trading. When you double your capital again move to 2 contracts, and so on ...
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1645404 width=206>
Hey Tums,
I am not sure if you posted this in response to my comments about trying to be in all the time.
But one cannot always stay without doing a reversal. What about a scenario at the coarse level where one is trading pt 3 channels and gets 2 FTT's in the same channel giving a new Pt3 in the new opposite direction? If one exits and waits the entry on the new pt3 channel is missed.
This is the first time I have seen this statement from Jack so I am not sure what the context is. Could it be for the indicator stuff?
B: the quote was not aimed at you or your post.
We should learn the spirit of the words, not the dot on the i, or the cross on the t.
The context is reverse.
I think what Jack meant was: don't try to reverse for reverse's sake.
If you work out $150k/yr/contract (40wks/yr, 4days/wk), you will need to do 19pts per contract per day. That's darn near SCT !
i.e. Our priority is to first push Entry-Exit to the limit. SCT will come when we can do wash at "turning points".
We should learn the spirit of the words, not the dot on the i, or the cross on the t.
The context is reverse.
I think what Jack meant was: don't try to reverse for reverse's sake.
If you work out $150k/yr/contract (40wks/yr, 4days/wk), you will need to do 19pts per contract per day. That's darn near SCT !
i.e. Our priority is to first push Entry-Exit to the limit. SCT will come when we can do wash at "turning points".
Why is that the goal?
IMO this should not be the goal. It could be the result because once you know a lot you can be in the market all the time.
My goal is to make points consistently. The easy ones first. The whole concept of SCT ("I have to be in the market as often as possible") has in fact hurt my trading in the past. Somewhere in my brain a voice told me "SCT, you have to be in the market, do it!". This was all wrong. If I am in the market just one minute a day to make my 2 points and for the rest don't see opportunity so be it.
As just was pointed out in a previous post you don't need many points every day to do very well.
regards,
Ivo
If the above post represents your view of the definition of SCT, then I suggest you have missed something crucial along the way. SCT has nothing to do with having to be anywhere. SCT refers to how one learns to recognize the signals provided by the market, and how the trader acts on those signals. If you made the decision to attempt to maintain a position in the market all day long without having the proper skill set to do so, then I submit, the blame does not reside with SCT.
As I have said many times, SCT is not a destination. SCT is a consequence of the learning process.
- Spydertrader
Quote from cnms2:
In my opinion you did great! If you do it consistently you're set for life ... So, it may be more important to be consistently profitable, than to try to squeeze more from each trade, which should come with additional risk.
I've quickly made a table (hopefully my calculations are correct) to illustrate how even with minimum profitability (but consistently profitable) money accumulates.
My calculations assume a cost per trade of about 0.6 of a tick, a starting capital of $5,000, no significant drawdown.
If you make on average 1 tick per day you'll make 28% per year.
If you make half a point (2 ticks) per day, you'll double your starting capital in 11 months.
If you make one point (4 ticks), you double in only 5 months.
After that, following Jack's recommendation, pull out your initial capital and continue trading. When you double your capital again move to 2 contracts, and so on ...
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1645404 width=206>
Interesting and encouraging stuff.
However, there's also such an issue as the value that you want to put at risk. I mean, I have no problems to put $100.000 in a savings account but putting the same amount of capital in a single trade is a different thing. Something unexpected can always happen.
It still makes your calculations valid of course and once consistent one can easier devote more capital to trading but it's just not the same.
regards,
Ivo
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