Its a bit off-topic but I want to put in a remark here because you raised a good point. I think the best way to compound anyone's total trading capital is to have 2 accounts. 1 account should be traded close to Kelly or "optimal f", and other account should be traded with reasonable risk (however way the trader defines it). Re-balancing of trader's capital among these multiple accounts would lead to fastest growth in trader's capital.
Successful Trading and Compounding - On Steroids
- Thread starter gmst
- Start date
Its a bit off-topic but I want to put in a remark here because you raised a good point. I think the best way to compound anyone's total trading capital is to have 2 accounts. 1 account should be traded close to Kelly or "optimal f", and other account should be traded with reasonable risk (however way the trader defines it). Re-balancing of trader's capital among these multiple accounts would lead to fastest growth in trader's capital.
Hi gmst,
Let us try and help you, if we can.
To start, something is amiss as you lost 900 on an opening balance of 2900 and came up with 2100!
Never mind all this DD gobbly di gook. Let's see if we can understand EXACTLY what you are 'systematically" trying to trade and what the basic strategy is supposed to be so we can follow along. Can you give us an outline.?
I am not a "technical" person ,so I may not be able to help you much.But other smarter people might be able to help.
I just shudder when I see what working capital you are using.:eek:
From what I have read,you seem to have a good head for data and technical stuff, but trading is a totally different ballgame and it may not be your game from what I can see.
But let's see if we can help you get a positive leg up.
Let us try and help you, if we can.
To start, something is amiss as you lost 900 on an opening balance of 2900 and came up with 2100!
Never mind all this DD gobbly di gook. Let's see if we can understand EXACTLY what you are 'systematically" trying to trade and what the basic strategy is supposed to be so we can follow along. Can you give us an outline.?
I am not a "technical" person ,so I may not be able to help you much.But other smarter people might be able to help.
I just shudder when I see what working capital you are using.:eek:
From what I have read,you seem to have a good head for data and technical stuff, but trading is a totally different ballgame and it may not be your game from what I can see.
But let's see if we can help you get a positive leg up.
Quote from Macho:
Hi gmst,
Let us try and help you, if we can.
To start, something is amiss as you lost 900 on an opening balance of 2900 and came up with 2100!
Never mind all this DD gobbly di gook. Let's see if we can understand EXACTLY what you are 'systematically" trying to trade and what the basic strategy is supposed to be so we can follow along. Can you give us an outline.?
I am not a "technical" person ,so I may not be able to help you much.But other smarter people might be able to help.
I just shudder when I see what working capital you are using.:eek:
From what I have read,you seem to have a good head for data and technical stuff, but trading is a totally different ballgame and it may not be your game from what I can see.
But let's see if we can help you get a positive leg up.
I am rounding off the numbers so thats why 900 negative from 2900 gets you 2100
Thanks Macho!
Regarding outline, I am mostly doing 4 different things, all of which basically capture the way prices move intra-day.
1. Following Momentum - this takes form of higher highs, lower lows, new highs, new lows etc.
2. Reversals - Trades for few ticks in another direction after a significant run-up in one direction, with a very tight stop.
3. Range Trading - Short near earlier highs with tight stops and long near earlier significant lows with tight stops.
4. Following fundamentals - These are multi week trades that I add when they move against me.
Now, I have devised systematic rules based on price action which seem to capture above 4 price patterns in the best manner. So this does involve a bit of data fit, but I have taken care that I am not overfitting. Thats about it!
I would be interested to hear about your trading especially your use of stops based on bond markets to trade ES. I never understood that.
Good advice ,I essentially told him the same thing.
Update for week 4 ending Apr 20, 2012 :
+100$ for the week. Was doing well till Thursday, had 3 bad trades in a row on Friday. For the 4th trade, I was short on ES on Friday and was planning to keep it till the end of day, that trade would have made 300$, but bailed out of it because account balance was still close to 2k, and my stop was wide enough that there was a possibility that account equity might have gone below 2k.
I am forced to trade in a constrained way currently because account equity is very close to 2k, once account equity goes beyond 4k, I would be able to trade much more freely. Will have to grind it out till that point.
As dom993 had suggested, I am adding # of systematic trades taken during the week.
Weekly Stats:
1. Week PL: +100
2. Start Equity: 2100
3. End Equity: 2200
4. Maximum equity run-up: 2600
5. Max Win day as % of that day's start equity: 15%
6. Max Loss day as % of that day's start equity: -17%
7. # of Systematic Trades missed: 0
8. # of Trades other than Systematic Trades: 0
9. # of Systematic Trades during the week: 8
Below stats are from Journal start day:
1. Total PL: -300
2. PF: 0.9
3. RoI: -11%
4. Max. DD: 36%
5. Current DD: 26%
6. # of winning days 45%, # of losing days 55%
7. Av. win day: 14%
8. Av. Loss day: -10%
9. Sharpe: 0.31
+100$ for the week. Was doing well till Thursday, had 3 bad trades in a row on Friday. For the 4th trade, I was short on ES on Friday and was planning to keep it till the end of day, that trade would have made 300$, but bailed out of it because account balance was still close to 2k, and my stop was wide enough that there was a possibility that account equity might have gone below 2k.
I am forced to trade in a constrained way currently because account equity is very close to 2k, once account equity goes beyond 4k, I would be able to trade much more freely. Will have to grind it out till that point.
As dom993 had suggested, I am adding # of systematic trades taken during the week.
Weekly Stats:
1. Week PL: +100
2. Start Equity: 2100
3. End Equity: 2200
4. Maximum equity run-up: 2600
5. Max Win day as % of that day's start equity: 15%
6. Max Loss day as % of that day's start equity: -17%
7. # of Systematic Trades missed: 0
8. # of Trades other than Systematic Trades: 0
9. # of Systematic Trades during the week: 8
Below stats are from Journal start day:
1. Total PL: -300
2. PF: 0.9
3. RoI: -11%
4. Max. DD: 36%
5. Current DD: 26%
6. # of winning days 45%, # of losing days 55%
7. Av. win day: 14%
8. Av. Loss day: -10%
9. Sharpe: 0.31
Why are you handicapping yourself ... is trading just too easy for you?
Seriously, fund your account properly, and trade as you should. If 4K is what you need, then wire an extra 1.5K (you started with 2.5K, right?) and stop making excuses.
No disrespect, just common-sense.
Have a great week-end
Honestly, this makes no sense. Why would you put yourself in a position where you are immediately putting yourself against a wall and fighting in a position of defense. With the actual leveraged amount you are working with you prob need 5 times more than you are trading. Do you not have 10k or 15k to put up into an account?
In a position of defense you should be waiting for the best opportunities and not be trading recklessly. You have already shown a lack of discipline in certain areas, if you are in a position of defense this should not be an issue! This is one thing that I have been working with lately. When I am not performing well I cut my size down and become very selective.
IMO you need to put more money in your account so you can trade your plan, not be constrained by equity. Under capitalization will kill you mentally, remember this game is all about performance management!
Dom993 and ShanB,
I had tough time to type this out but finally I decided to do it. I lost more than 70k to the markets over the last 3 yrs when I was learning the craft, and had larger amounts of capital available. Now when I have finally learnt and have a solid trading plan in place, sad fact is that I have very limited capital. I am going to start a part time job that will allow me to save some capital. It seems that I will be able to add some capital to my account over the next 6-8 weeks. Till then, I will have to run the account constrained. Sadly this is the fact and I must face it.
On a positive note, with the risk I am running, on average, my account should double in value every 8-10 weeks. 4 weeks have already passed since I started the journal and I am at 2.2k starting from 2.5k. So, statistically, over the next 4-6 weeks, my account should be at 5k (assuming it doesn't go below 2k and stays there).
I had tough time to type this out but finally I decided to do it. I lost more than 70k to the markets over the last 3 yrs when I was learning the craft, and had larger amounts of capital available. Now when I have finally learnt and have a solid trading plan in place, sad fact is that I have very limited capital. I am going to start a part time job that will allow me to save some capital. It seems that I will be able to add some capital to my account over the next 6-8 weeks. Till then, I will have to run the account constrained. Sadly this is the fact and I must face it.
On a positive note, with the risk I am running, on average, my account should double in value every 8-10 weeks. 4 weeks have already passed since I started the journal and I am at 2.2k starting from 2.5k. So, statistically, over the next 4-6 weeks, my account should be at 5k (assuming it doesn't go below 2k and stays there).
1) Assuming you will double your account every 10 weeks sounds unrealistic at this point or any point for that matter.Continued thinking that that is realistic will begin indicating the potential for manic depressive illness or some other delusions of grandeur.
Be optimistic, just don't be stupid about it.
2) You are assuming you have a solid trading plan and can stick to that plan now. I've noted one of your biggest weaknesses is lack of discipline. How about just paper trading while you get more capital?
Glad you finally see you are under capitalized.
I have to agree with the other posters.....the fact that you are undercapitalized in the manner that you are means that you have almost a zero chance for success trading cut-throat futures markets dominated by pros.....I'll guarantee that the futures market will take all of your money....every single dime...
You said that you were successful with forex. That seems to be your only option....You should go back to forex and trade micro-lots and work your account back up....
Also, save some more money or find a partner....just being realistic here.....
You said that you were successful with forex. That seems to be your only option....You should go back to forex and trade micro-lots and work your account back up....
Also, save some more money or find a partner....just being realistic here.....