Summary of a small disaster

After a trading experience of 10 years, losing money every month of the year, I am starting to wonder whether I should just trade the opposite of what looks best to me at any time.

In fact, that is more or less what the system does, and if I am there, sitting in front of it, often I feel like stopping it, and a few times I actually did close the trades the system made, because they didn't seem reasonable. And most of the time I was wrong, too.
 
Quote from travis:

After a trading experience of 10 years, losing money every month of the year, I am starting to wonder whether I should just trade the opposite of what looks best to me at any time.

In fact, that is more or less what the system does, and if I am there, sitting in front of it, often I feel like stopping it, and a few times I actually did close the trades the system made, because they didn't seem reasonable. And most of the time I was wrong, too.
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What happens if you go from 8k to 26k again though?

Also that might only work if you sincerely knew you weren't actually implementing that system.
 
Thanks to everyone for the info and advice and here are some specific answers:

bespoke:
Systems have been tested for 10 years
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BUT !!!!!:
He never answered the very vital question of whether the drawdown he encountered exceeded the max of the backtesting results.
He tested all right, but he didn't know what to look for and how to compare the backtest with the real world results.
Another newbie ET neophyte bites the dust !
Systems trading is tough and exacting work. You gotta know what you're doing.
Or else you lose to someone who does.
 
Well, NeoRio1, if that happens, I will be very happy, and repay my debt. I don't know if things can go badly again for me - I don't think I can have such bad luck, as to rise three times (it already happened twice) from a few thousand to about 25 and then fall back to zero.

I don't know what'll happen. Anyway, today I decided that I will ask for another loan, and give it another shot. Tomorrow. I believe it will work again. I will pay it back again within 2 months, for sure, unless I lose everything.

I wish I could invest in mini- mini- futures that only required a margin of 100 dollars or so, but I guess it's not possible. So, to diversify, I'll have to go with the loan.

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I think you are right, syswizard - I suck. I admit it. And I do, because I am lazy and ignorant. But I did spend 10 years on this stuff. Just 4 on trading systems. Plus I am not a programmer, and I did poorly at math. So I don't know what'll happen. I did build something, systems-wise but it's not a masterpiece for sure. It's crap, but I couldn't do any better.

On "whether the drawdown he encountered exceeded the max of the backtesting results":

Sure, it didn't exceed it, but how do I know? With drawdowns, I had as far as 3 red months for each of the 20 systems. But guess what - after having as low as 10k dollars, all you need is two bad weeks with one system and you get down to zero. As I said, I suck. I hoped to get lucky.

But I am still going to try my best, and not give up. Things have been improving steadily for the past 10 years. Every year I lost money for the first 8 years, then in the past two years, I made some money. Plus I felt the excitement of doubling my investment a few times before seeing it go back to zero. That's also an improvement for me.
 
Ok, here's what I did. I changed my mind about the loan. Maybe it's not necessary. Plus if I lose everything, I'd be screwed for the next few years.

So I just moved a few thousand from my account into my trading account. Now however I will only be able to trade two or three systems at a time. But this way seems better to me, because I can appreciate better the value of money.

One thing is for sure. I shouldn't try any discretionary trading to increase my gains, because so far it has made me lose more than I ever gained, and I am also talking about recently, not just the first 8 years of my trading experience.
 
Quote from bespoke:

I think you have to ask yourself this - do your systems actually work? How long have they been tested for? Years? 1 month of positive results is not what I could consider a working strategy.

I bet most system traders only have 1 or 2 profitable systems. If we had 20 we'd be laughing all the way to the bank everyday.
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BINGO




Plus throw in "Risk of Ruin." it is the most important stat that most traders do not know about.
 
Quote from travis:

got it
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Good. Too many people define being a successful trader as someone who regularly makes money.

They are oblivious of the fact they might just happen to be short-term lucky, or that Risk of Ruin comes to visit just about everyone. It is only a matter of time.

Most "successful" traders just haven't been hit by yet. If no serious outperformance edge, then their account WILL be visited by the Angel of Death. The "rake" or house advantage (commissions, fees, errors, slippage, etc. etc.) will grind down everyone.

That is why they say that capital preservation is more important than making a profit.
 
Yeah, I realize I can't expect to create a system that has no drawdown, so I do need money management. Maybe I lack the skills and the energy, so I looked for shortcuts.

It makes sense. Non-system traders as I know them, lose pretty quickly all their money. The others, with systems, but not the other tools (like risk management), don't lose everything and might even make money in the short run. Then - it happened to me twice - all of a sudden, they lose everything they made.

Yeah, capital preservation. I agree. My situation was having 20 systems, all so so (60% of wins), and probably with 200,000, I would have made it. But starting with 4k as I did, I was lucky enough to make money for a few months. I think they all went wrong at once, just like they all were making money at once. I thought they were different, but maybe not.

But hey, I am far from being a so-called "pro". I am already very happy that I am not losing all of my money everything with discretionary trading as I was doing until very recently. I hope one day to bring my system trading further, to include the Risk of Ruin. For now I am happy that I achieved some success, even if it didn't last very long. All that matters is that I keep getting better. I can't get perfect overnight.

Sooner or later I will manage to get rid of my addiction and quit discretionary trading altogether (I don't know when - I can't promise tomorrow, because I've said many times already). Sooner or later I'll have enough capital and a good enough system that won't bring me back to zero every once in a while. Or I'll learn to take less risks. For sure I am bad at math, and at using formulas so I am gonna keep it as simple as possible.
 
It's critical that ETers realize that not everyone is doomed in discretionary trading. Just as not all can system trade not all can discretionary trade.

Find what works for you and do it well!
 
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