Successful Trading and Compounding - On Steroids

[gmst]

Quote from PHOENIX TRADING:

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.

I completely agree with you that it seems hard to believe that anyone can double his account every 10 weeks .....that will mean 2^5 = 32 times account in a year. But I cannot and must not disbelieve the backtesting results that I see. I admit at times even I go through the process of disbelieve and question if I am deluding myself. The best way to settle this for myself is to just do it - If I can take my account to 10k within 4-5 months, I guess I would have demonstrated it for myself and everyone else. Till that time, I admit its a good idea to be sceptical of this claim - even I am myself to some extent.

Quote from PHOENIX TRADING:


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.

Yes, it has been my achillis heal. I am working very hard on discipline currently, have started doing daily visualizations as a poster suggested and I hope I will have this problem under control in some time.

 

[gmst]

Quote from HurricaneUS:

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.....

After 2 months or so, I should be in a position to add capital or probably will just get some friend to put some capital into the account on a profit split basis.

 

[PHOENIX TRADING]

Quote from gmst:

After 2 months or so, I should be in a position to add capital or probably will just get some friend to put some capital into the account on a profit split basis.

:eek: eww. I would HIGHLY recommend NOT allowing ANY friend or family member fund your account.

One or both is gonna go bad, friendship or account.

 

[PHOENIX TRADING]

Quote from gmst:

I completely agree with you that it seems hard to believe that anyone can double his account every 10 weeks .....that will mean 2^5 = 32 times account in a year. But I cannot and must not disbelieve the backtesting results that I see. I admit at times even I go through the process of disbelieve and question if I am deluding myself. The best way to settle this for myself is to just do it - If I can take my account to 10k within 4-5 months, I guess I would have demonstrated it for myself and everyone else. Till that time, I admit its a good idea to be sceptical of this claim - even I am myself to some extent.



Yes, it has been my achillis heal. I am working very hard on discipline currently, have started doing daily visualizations as a poster suggested and I hope I will have this problem under control in some time.

I Don't do it, but the visualization thing , sounds like a great idea I may need to look at later.

 

[gmst]

Quote from PHOENIX TRADING:

eww. I would HIGHLY recommend NOT allowing ANY friend or family member fund your account.

One or both is gonna go bad, friendship or account.

Thanks, I know it is can be tricky and very risky. That is why I have not done it yet. I think its good advice to avoid it. Seems my idea of using earnings from my part time work would be best.

 

[etile]

Stop trying to get rich quick. Listen to yourself. You plowed through over 70k in 3 years and now, undercapitalized, you expect to double your account every 4 weeks. Seriously?

I am sorry, but you are destined for failure with this mindset. I cringe with what you writing.

The market doesn't deserve to give you a damn nickel. It doesn't give a damn that you drop 70k in the last 3 years. It doesn't give a damn that you have a system that is suppose to double every 4 weeks.

You want to know the reason some people are losers and some are winners? Losers don't know when to pack it in ameliorate their losses. The easiest way? Stop trading and increase your strides. Worst case scenario you bleed out at a slower pace. Losers don't do this because they ignore the bankroll or have unblinding trust in their "systems". They also think in terms of the action that they're missing out on.

You want tips to being a good trader? Go to any poker room and study the degenerate poker addicts. Do the opposite of everything that they do. They're the best people to fade because their mental state is totally warped.

For god sakes, be honest with yourself and your positions. Losses are normal in this game, but larges losses often are because of a lack of patience and laziness.

 

[Wide Tailz]

Quote from gmst:

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......

.....my account should double in value every 8-10 weeks.

When I've given up thinking about how much money I could make by trading, rather how I will protect my capital, I've made the best trades. My worst have happened when trying to force a trade when the setup wasn't there, saying "let's try an experiment" as I removed my stops and went all in with leverage.

Oh, the pain, as my option account imploded yet again.

I still remember sitting on the couch looking at the screen. 10 minutes after putting on the position it exploded against me. Lol.

Now I trade stocks only, swing trend following based on the lowest risk setup I've ever found. It's boring and requires serious self control.

I think you'll come out of this a changed man, ready to go into business with The Market like a true professional.

It's all about risk.

 

[gmst]

Update for week 5 ending Apr 27, 2012 :

+200$ for the week. Screwed up trading ES on Fed day, I had a valid signal to trade on Fed day but didn't take it because it was a fed day and I haven't done enough research to see the validity of that particular signal on Fed day. Sounds reasonable!!! But the point where I really screwed up is that I didn't take my planned trade but I took other unplanned trades (including one in opposite direction to my signal) on Fed day! It would have been perfectly reasonable to sit out the day and not trade, but mental mistakes or rather lack of purpose (of growing my account while following my plan) led me to take 3 unplanned trades that day. Continued being stupid and took 1 unplanned trade next day after Fed day.

I am not following the purpose of this journal - which I outlined in the first post - "to be a no-nonsense journal with the aim of making myself independently wealthy". Very discouraging indeed.

Going forward, I have decided to benchmark my real account equity curve against the theoretical systematic equity curve (taking all valid signals) and post it. I have never done this analysis before - and I am sure this will help me from going stray from following my plan.


Weekly Stats:

1. Week PL: +200
2. Start Equity: 2200
3. End Equity: 2400
4. Maximum equity run-up: 2600
5. Max Win day as % of that day's start equity: 18%
6. Max Loss day as % of that day's start equity: -8%
7. # of Systematic Trades missed: 0
8. # of Trades other than Systematic Trades: 4
9. # of Systematic Trades during the week: 6

Below stats are from Journal start day:

1. Total PL: -100
2. PF: 0.98
3. RoI: -3%
4. Max. DD: 36%
5. Current DD: 19%
6. # of winning days 44%, # of losing days 56%
7. Av. win day: 13%
8. Av. Loss day: -9%
9. Sharpe: 0.8

 

[dom993]

Quote from gmst:

Update for week 5 ending Apr 27, 2012 :

+200$ for the week. Screwed up trading ES on Fed day, I had a valid signal to trade on Fed day but didn't take it because it was a fed day and I haven't done enough research to see the validity of that particular signal on Fed day. Sounds reasonable!!! But the point where I really screwed up is that I didn't take my planned trade but I took other unplanned trades (including one in opposite direction to my signal) on Fed day! It would have been perfectly reasonable to sit out the day and not trade, but mental mistakes or rather lack of purpose (of growing my account while following my plan) led me to take 3 unplanned trades that day. Continued being stupid and took 1 unplanned trade next day after Fed day.

I am not following the purpose of this journal - which I outlined in the first post - "to be a no-nonsense journal with the aim of making myself independently wealthy". Very discouraging indeed.

Going forward, I have decided to benchmark my real account equity curve against the theoretical systematic equity curve (taking all valid signals) and post it. I have never done this analysis before - and I am sure this will help me from going stray from following my plan.

I only trade automated these days, and my only goal wrt execution is to meet the system theoretical performance (which for me means no overriding of any system decision). Even though it is allegedly easy to do with automated systems, it still takes a huge belief in that it is not the current trade outcome that matters, only the system long-term performance. The other underlying belief is that I cannot outperform my systems on a long-term basis (my only chance at that, it to improve existing systems and/or develop better performing ones), even when, on a trade by trade basis, the system's entry & exit are never optimal.

The most frustrating part of it, is to watch the market every day move up & down & up again & down again, see come & go a number of "irresistible" patterns, and sit on my chair, doing R&D and waiting for the systems to spot their next trade. But I have the strong belief that any of these "irresistible" patterns, traded in isolation, wouldn't be any better than gambling, which isn't trading for me. It would take verifying the associated edge, and taking at least 100 corresponding trades, to turn the odds really in my favor.


I think you are trying too hard to make money ... you should really focus on trading well ... high-quality trading plan and flawless execution (real-time setup identification & trade management) ... making money will be the by-product of trading well - but there will always be losing trades / days / weeks / months, that shouldn't distract you from the objective: trading well.


Enjoy your week-end!

 

[PHOENIX TRADING]

Quote from gmst:

Update for week 5 ending Apr 27, 2012 :

+200$ for the week. Screwed up trading ES on Fed day, I had a valid signal to trade on Fed day but didn't take it because it was a fed day and I haven't done enough research to see the validity of that particular signal on Fed day. Sounds reasonable!!! But the point where I really screwed up is that I didn't take my planned trade but I took other unplanned trades (including one in opposite direction to my signal) on Fed day! It would have been perfectly reasonable to sit out the day and not trade, but mental mistakes or rather lack of purpose (of growing my account while following my plan) led me to take 3 unplanned trades that day. Continued being stupid and took 1 unplanned trade next day after Fed day.

I am not following the purpose of this journal - which I outlined in the first post - "to be a no-nonsense journal with the aim of making myself independently wealthy". Very discouraging indeed.

Going forward, I have decided to benchmark my real account equity curve against the theoretical systematic equity curve (taking all valid signals) and post it. I have never done this analysis before - and I am sure this will help me from going stray from following my plan.


Weekly Stats:

1. Week PL: +200
2. Start Equity: 2200
3. End Equity: 2400
4. Maximum equity run-up: 2600
5. Max Win day as % of that day's start equity: 18%
6. Max Loss day as % of that day's start equity: -8%
7. # of Systematic Trades missed: 0
8. # of Trades other than Systematic Trades: 4
9. # of Systematic Trades during the week: 6

Below stats are from Journal start day:

1. Total PL: -100
2. PF: 0.98
3. RoI: -3%
4. Max. DD: 36%
5. Current DD: 19%
6. # of winning days 44%, # of losing days 56%
7. Av. win day: 13%
8. Av. Loss day: -9%
9. Sharpe: 0.8

once again you show your penchant for not being disciplined, you need to develop a plan to curb this destructive behavior.