Successful Trading and Compounding

Status
Not open for further replies.
Quote from gmst:

I claim that I will never have a blow up again.

Aim of this Journal:
1. I started trading again for a personal account one month back with 5k in it. Now, I am looking to document every week some of my salient trades and trading results.
2. Today start value is 7k.
3. I am looking to grow my account somewhere in the range 30k to 60k in one year. With my current strategies, I should be able to grow it comfortably to 30k. 60k is a more lofty aim - I am hoping I will be able to develop more strategies and put them into production over the course of the year. So, aim is to make around 5x-10x of capital. Acceptable MDD: (40% once in 10 years)
4. I hope this journal will force me to be very careful about my risk and will keep me disciplined.
5. In this experiment, I plan to trade my intra-day strategy, have a few swing trades (2 to 10 every week, holding period days to weeks) based on global macro.

Future Longer term Aim:
1. A big area of improvement from the risk side is that I currently trade only 10-15 products. If I can devise a systematic stock trading system, I might be trading 100-200 names on a given day. This should ensure that my blow-up risk gets reduced a lot.
2. Incorporate systematic options trading into my strategies
3. Look to move into spread trading over time
More...

Above was my 2nd post in this journal. I left my job, decided to take up trading full-time and now I am closing this journal - so its a good time to refer back to this post and see what I achieved over the last 6 months.

1) Well, I blew up 'technically' (defined as account equity going below 2k) but after holding ground for 26 weeks. It doesn't mean that I can't trade successfully though - as had it not been for IB's rule of minimum 2k in the account to trade, I would have clawed back my account higher, as I did before, when I climbed back from a 82% DD.
2) In my assessment, my "basic learning phase" for "successful and consistent trading" is complete now. Took me 3 yrs!
3) I kept good records and was disciplined in posting after every week.
4) My maxDD was 82% after first 4 weeks of trading, and my min DD was 27% after 18 weeks. That was a 290% rise in equity from the minimum point, over a 14 week period.
5) I consistently made money trading FX, and consistently lost money trading ES. All the reported stats in this journal are for my overall trading.

I debated for many weeks if I should put out separate stats for FX trading in my last post or not. Finally, I have decided to withheld that information. Reason is - I might use these figures to take up employment at a futures prop. shop and putting these FX figures on the internet might endanger my privacy.

Let me give some hints though about performance of my FX only trading:
1) Highly Successful by all metrics - % profits, total net profits, return on account, low DD, consistency on a weekly and monthly basis etc.
2) Extremely good Sharpe ratio - definitely beat what I thought would be possible by a "very very wide margin" :)
 
cont. from above:

Where I failed:
1) I had hoped to take my account to 30-60k in a year, after 6 months, I am below where I started. :(
2) The biggest reason for losses was trading ES. I lost around 10k in ES trading, and I recognized it early, but just couldn't quit trading ES. Wow - the power of addiction. Its easy for me to understand the psyche of drug addicts now.
3) I promised myself 10 times to stop trading ES, came up with multiple ideas and analyzed a lot of things (trading wise and psychologically) but just couldn't stop the habit and as a result, my account didn't grow.
4) More hairs have grown grey now and I have put on at least 7 kg weight over the last 6 months. Haven't been to a gym the whole time. Bad lifestyle.

I achieved a few things also that I hadn't planned for initially:
1) I have now 2 trading strategies on ES - yes, finally!!!
2) I have more than 10 trading strategies for FX - when I started I had probably 2 or 3.

I am going to start a new journal with a new aim.

SAYONARA TO THIS JOURNAL!
 
Quote from gmst:



I am going to start a new journal with a new aim.
More...

Your aim always was, and always will be to get paid by The Market for the assumption of risk you take with every position. There are millions of market participants who want the opposite: to give up profit potential just to lock in price and eliminate all risk of change. They are willing to cash out now and give up any risk of profit or loss.

You, the successful speculator, must do the opposite. Are you willing to do this?

I perceive from your numerous patronizing responses to your own performance and the suggestions given in this thread that you are not serious about winning. You would rather go through the motions than become a winner.

I worked with an engineer like this. Nicest guy I ever worked with, but a complete failure as an engineer........... all he could do was report useless metrics of progress while getting absolutely nothing accomplished. All activity no results.........

I've gone through what you are going through and it was 100% psychological. I knew what I needed to do, yet I refused to do it.

However, one day I decided that I was tired of giving money away.

"Psychology motivates the quality of research" -Tharp, from Super Trader
 
Quote from Wide Tailz:

Your aim always was, and always will be to get paid by The Market for the assumption of risk you take with every position. There are millions of market participants who want the opposite: to give up profit potential just to lock in price and eliminate all risk of change. They are willing to cash out now and give up any risk of profit or loss.

You, the successful speculator, must do the opposite. Are you willing to do this?

I perceive from your numerous patronizing responses to your own performance and the suggestions given in this thread that you are not serious about winning. You would rather go through the motions than become a winner.

I worked with an engineer like this. Nicest guy I ever worked with, but a complete failure as an engineer........... all he could do was report useless metrics of progress while getting absolutely nothing accomplished. All activity no results.........

I've gone through what you are going through and it was 100% psychological. I knew what I needed to do, yet I refused to do it.

However, one day I decided that I was tired of giving money away.

"Psychology motivates the quality of research" -Tharp, from Super Trader
More...

Agree with few of your comments and disagree with few. My aim with this journal was to stop blowing up - earlier I would blowup in 2-6 weeks. I accomplished that. My 2nd aim was to turn my 5k into 30-60k. Failed. My third aim was to get serious with my record keeping and analysis. Done. As an added bonus, # of strategies increased from 2 to 10 during the last 6 months.

Agree its psychology to a large extent. Please read

http://www.elitetrader.com/vb/showthread.php?s=&threadid=224491&perpage=20&pagenumber=6

the post by ammo earlier in this journal - in which he mentions how 3 yrs of consistently losing money and blowing up leads to conditioning of mind and how difficult it is to change your mind.

Taking money out of market consistently and growing up equity is the aim for the new journal. Agree with your criticism. No point being a nice guy, if you can't become rich trading. I hope I won't be like that engineer. Btw, how did you change yourself and how long did it take you before you decided to change yourself one day ?
 
Quote from gmst:

Btw, how did you change yourself and how long did it take you before you decided to change yourself one day ?
More...

Biggest change came from burning my bridges behind me. Then the answer just "popped" into my subconscious mind, even though it had been festering for some time.

This came about 9 months after I started trading, then again a few months ago. I've been trading for less than 2 years.

Here is my own personal answer: all setups (otherwise known as buy signals or triggers) work the best in the third wave. The third wave breaks the trend line of the previous corrective wave of the next higher degree. Waves propagate along the right trend line.

And you know something? All this was presented to me on month 3 of my trading career. It took several months of churning and burning to finally get it. The burning desire finally lit up one day when I became tired of trying to discover an easier way.
 
Quote from gmst:

added bonus, # of strategies increased from 2 to 10 during the last 6 months.
?
More...
too far, too fast,1 mastered strategy (70% win rate)could make a career,just do one lay up strategy and sit on your hands studying others for free while the one pays your way,you will learn to hang on to your money,very important skill,strategy 2 mastered,you make more,and get to keep both piles because you learned to sit and hang on to your money, and so on...
 
Quote from gmst:

Update for week 26 ending Jan 20, 2012 :

Posting after a long time.

-2400$ for the week.

Lost on all 5 days - happened for the first time in 26 weeks. Goes to show how bad things can happen even after sustained decent performance. Bad trading for last 2-3 weeks, even in FX - most of the times have been reversing positions and have been going in the market with large leverage.

This Week's Stats:

Withdrawal: 0$

1. Week PL: -2400$
2. Start Equity: 4.7k
3. End Equity: 2.4k
4. Maximum equity run-up: 4.7k
5. Max Win day as % of that day's start equity: 0%
6. Max Loss day as % of that day's start equity: -26%

Below stats are from Journal start day:

Withdrawal: 1100$

1. Total PL: -3600$
2. PF: 0.9
3. RoI: -49%
4. Max. DD: 82%
5. Current DD: 53%
6. # of winning days 50%, # of losing days 50%
7. Av. win day: 15%
8. Av. Loss day: -14%
More...

@gmst

reading thru your verbiage is quite difficult to estimate the depth of each of your trade.

how about also attached pix of your trading screen, so everyone could see exactly where and when you entered and exited a trade?

only if you are willing to take that step to make your journal more meaningful for other traders to easily follow, K?

thx
 
Quote from ammo:

too far, too fast,1 mastered strategy (70% win rate)could make a career,just do one lay up strategy and sit on your hands studying others for free while the one pays your way,you will learn to hang on to your money,very important skill,strategy 2 mastered,you make more,and get to keep both piles because you learned to sit and hang on to your money, and so on...
More...

@ammo

very sound advice

but how many will modify their trading behaviors so as to accomplish profitability on focusing on one product, one market at a time; until you are profitable and profitable consistently, so to speak....?

nevertheless, a very sound and profitable advice, indeed.
 
Quote from ammo:

too far, too fast,1 mastered strategy (70% win rate)could make a career,just do one lay up strategy and sit on your hands studying others for free while the one pays your way,you will learn to hang on to your money,very important skill,strategy 2 mastered,you make more,and get to keep both piles because you learned to sit and hang on to your money, and so on...
More...

yes ammo, I am just going to trade 3 strategies (win rates between 40 and 50%) going forward for most of the time like 90% of time or so. Will trade other setups only rarely actually very rarely.
 
Status
Not open for further replies.
Back
Top