Taking 103K to 1.2million by Year End 2008

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neke

This is the target for this year. I know it sounds very lofty, but I have given a lot of consideration to this. Last year, I set out to take 76K to 500K by year end, starting 25 of February. I was unable to achieve that, returning only 186% before withdrawals. On the other hand, through the first half of that endeavour (at the end of week 22 of 43), I had taken the initial sum of 76.6K and returned 264% before withdrawals. That works out to a compounded weekly rate of 6%. Although I was unable to sustain the momentum through the second half of the period (actually had a loss for the second half), I still feel that the performance of that first half is not only feasible but sustainable for an entire year. However, to allow for some modesty, knowing the difficulties in implementation, I shall aim for a 5% weekly compounded rate. This means between now and end of the year, 50 weeks, the 103K should grow to 103* 1.05 ^ 50, which gives my target balance of $1.2million. Of course the above assumes no withdrawal. I shall adjust for that in due course.


I have drawn up a core list of strategies with expectations for each, in terms of number of trades, and the total return. I shall keep a close tab on the performance of each strategy, and will be quick to cut-down or halt trading on each method that fails to live up to expectation. I know the difficult part is abstaining from trades. For the first half of the year, my expectation shall be a modest 180%, bringing the balance to about 290K, while I keep refining my core strategies, automating a lot of things, alongside with maintaining a regular employment. Then if the target for the first half is met, I shall devote full time for the second half (leave of absence or outright resignation from regular employment), full steam with all my refined methods and automation, and aim for a compounded 313% second half. However, for purposes of measuring progress, I will assume the results accrue uniformly at a compounded weekly rate of 5%.


I am aware that the above will involve the possibility of significant draw-downs. I am prepared, however, for a single maximum draw-down of 40% due to losses. Last year, there were too many big drawdowns mainly due to rule violations. Part of the work I am undertaking is laying a good mathematical analysis of the risks and attendant draw-down inherent in maintaining multiple strategies/multiple open positions especially for the swing trades spanning several days, given my presumed "edge".

Feel free to join along the ride.
 

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I did this last year before giving back almost 300K by year end and have done it 4 times in the last 12 years so it is certainly possible. Good luck.
 
Quote from neke:

This is the target for this year. I know it sounds very lofty, but I have given a lot of consideration to this. Last year, I set out to take 76K to 500K by year end, starting 25 of February. I was unable to achieve that, returning only 186% before withdrawals. On the other hand, through the first half of that endeavour (at the end of week 22 of 43), I had taken the initial sum of 76.6K and returned 264% before withdrawals. That works out to a compounded weekly rate of 6%. Although I was unable to sustain the momentum through the second half of the period (actually had a loss for the second half), I still feel that the performance of that first half is not only feasible but sustainable for an entire year. However, to allow for some modesty, knowing the difficulties in implementation, I shall aim for a 5% weekly compounded rate. This means between now and end of the year, 50 weeks, the 103K should grow to 103* 1.05 ^ 50, which gives my target balance of $1.2million. Of course the above assumes no withdrawal. I shall adjust for that in due course.


I have drawn up a core list of strategies with expectations for each, in terms of number of trades, and the total return. I shall keep a close tab on the performance of each strategy, and will be quick to cut-down or halt trading on each method that fails to live up to expectation. I know the difficult part is abstaining from trades. For the first half of the year, my expectation shall be a modest 180%, bringing the balance to about 290K, while I keep refining my core strategies, automating a lot of things, alongside with maintaining a regular employment. Then if the target for the first half is met, I shall devote full time for the second half (leave of absence or outright resignation from regular employment), full steam with all my refined methods and automation, and aim for a compounded 313% second half. However, for purposes of measuring progress, I will assume the results accrue uniformly at a compounded weekly rate of 5%.


I am aware that the above will involve the possibility of significant draw-downs. I am prepared, however, for a single maximum draw-down of 40% due to losses. Last year, there were too many big drawdowns mainly due to rule violations. Part of the work I am undertaking is laying a good mathematical analysis of the risks and attendant draw-down inherent in maintaining multiple strategies/multiple open positions especially for the swing trades spanning several days, given my presumed "edge".

Feel free to join along the ride.
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Good luck man. Always remember, the fact that you are profitable at all is still better than most. Don't get stressed out if you don't quite get that high in returns....but nonetheless, best of luck in acheiving your goal man.
 
Quote from Mvic:

I did this last year before giving back almost 300K by year end and have done it 4 times in the last 12 years so it is certainly possible. Good luck.
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Thanks for the reinforcing affirmation. I believe you said somewhere that you trade futures and options exclusively. I know it calls for a lot of discipline to wait for only the right opportunities. For my current year expectations, I have modelled my strategies for about 400 trades (about a third of the number of trades I did last year). There were just too many ill-conceived trades that dented my account.
 
neke

throughout the week, how much on average are you willing to risk in order to get to your 5% profit?

also, if you have 2 or 3 weeks in which you reached your max loss, thereby leading to an increasing drawdown, would you consider reducing your risk until you're back on your feet? iow, tell us a bit more about your money management.


thanks
 
Neke, best of luck to you! I enjoyed your thread last year. You are definitely capable of reaching your goal. Just try and be disciplined and follow your plan to the "T".
 
Quote from asap:

neke

throughout the week, how much on average are you willing to risk in order to get to your 5% profit?

also, if you have 2 or 3 weeks in which you reached your max loss, thereby leading to an increasing drawdown, would you consider reducing your risk until you're back on your feet? iow, tell us a bit more about your money management.


thanks
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The 5% is an average: it is not an absolute target. The maximum drawdown expected (which could last more than a week) is 40%. I calculate risk on a per-trade basis. For stocks, the maximum that could be allowed per trade is 10% loss of account (not all trades, only the higher reward ones could be allowed this extent of freedom): my position monitor will ensure no single loss exceeds 10% of my equity. Last year, due to not having such a rule, there were 20 trades that decimated my account by more than 10% (of balance prior to trade). The worst ones reduced my account by 29%, 28%, 27% and 22% respectively: it is my intention never to allow such freedom for my losing trades.
 
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