Taking 103K to 1.2million by Year End 2008

[short&naked]

Quote from FGBS:

I know you trade equities because you posted one of your amazing trades was it GM or Ford or something 3/4 weeks back. You actually got out which was a great thing to do as it would have cost a fortune. Just because you have failed does not mean other people will... Just because you can't run the 100m in under 10secs does not mean no one can.

"You, however, seem to have a ways to go. " I have no way to go, I work for a trading company arbing day in day out, making solid little bits of money 96 days out of 100... does that mean its the only way to go? NO. Do I enjoy taking the occaisional 60/40 trade when I get the chance, most definitely, will I put in my complete equity? No, and nor does Neke.

This is my last reply to you you stubborn baffoon, in life you have the people that wish others well and smile in other's achievement, and you have those that cringe inside as someone else's achievement merely highlights their own lack thereof. You my friend should get a life and and think about what will make you wake up in 20 years with a smile on your face.

To all the well wishers Gluck and to all those sour grapes claiming to be realists good luck finding a way to look in the mirror and smile.

You know for a fact that I trade equities? You believed that post? I guess most did. Well, you have it all figured out then.

Again, you are just mumbling a bunch of sentimental american crap about achievement, smiling, blah, blah, meanwhile talking about facts, etc. and not even posting meaningful responses to my statements. Again, this thread is not about achievement as you call it but gambling. For the record, let's make that crystal clear.

Oh, and save the name calling. It reflects more on your noobness than on me.

 

[neke]

Quote from short&naked:

Really? Then why is his equity curve not smooth? Most of his huge gains were made recently in a few gambling trade. Could have easily gone the other way.

Hi Short&Naked,

What is your definition of gambling?

It is silly how people could criticize without bringing facts to back up their position. This week's top trade on SPY was roughly 300% of account value (16000 shares). That is about the maximum leverage used on a trade since the thread started. The risk/reward on that trade is identical to buying 32 ES-mini contracts, on an account size of 400K. That is 12.5K margin per contract. Tell me, those trading futures, is that an outsized risk to take on an intra-day trade?

Let me pose to you a scenario given in last year's thread, and give me your answer, you intelligent investor:

Suppose your trade has two possible outcomes: a gain of +20% or a loss of -10% with equal chance (you know this based on years of prior experience), each trade lasting a week, and only able to hold to one position at a time. The results are compounded (good you believe in this as well!). Would you trade this scenario? What percentage of your account will you commit to each trade? What is the maximum percentage draw-down you would accept?

 

[short&naked]

What is your definition of gambling?

The definition of gambling (as in the Las Vegas sense) brings with it an element of complete loss of control over the outcome of an event. I actually consider any form of trading (even high risk strategies) to be less risky than gambling since you have so many more resources under your control (if you chose to do so). This includes stops and using them to limit your loss (including only risking a small amout of your capital), which puts you in as much control as possible of the uncertainty that lies ahead. If one, however, choses not to apply them one might as well just be pulling the lever on a one-armed bandit.

It is silly how people could criticize without bringing facts to back up their position. This week's top trade on SPY was roughly 300% of account value (16000 shares). That is about the maximum leverage used on a trade since the thread started. The risk/reward on that trade is identical to buying 32 ES-mini contracts, on an account size of 400K. That is 12.5K margin per contract. Tell me, those trading futures, is that an outsized risk to take on an intra-day trade?

Well, in all fairness, this is what Soros did back in the 90s, when he leveraged to the hills since the R:R was too good to pass up. But again, any mention of stops? But regardless of the details, if you are doubling or trippling your account within that time span you are taking on risks that could easily have pushed your account in the other direction (or stoped you out with fairly large losses).

Let me pose to you a scenario given in last year's thread, and give me your answer, you intelligent investor:

Suppose your trade has two possible outcomes: a gain of +20% or a loss of -10% with equal chance (you know this based on years of prior experience), each trade lasting a week, and only able to hold to one position at a time. The results are compounded (good you believe in this as well!). Would you trade this scenario? What percentage of your account will you commit to each trade? What is the maximum percentage draw-down you would accept?

I can't tell you what an investor would say, since I do not consider myself one. However, I can tell you how any risk manager worth his bread and butter would answer: The question is senseless since making any predictions on the quality of a given R:R (-10% vs. -20% in this case) is impossible to do accurately. (I don't care how much experience one has). You are therefore trying to fix position size, stop placements on something that will never play out in real life. Were you a quantitative risk manager in a former life, neke?

What I find interesting is that your equity curve looks exactly like those of the many systems on collective2.com that made a killing in the past month. Others on the other hand completely blew up and erased up to 4 years of gains. I'd say it was about 50/50.

I rest my case:

http://www.ljmfund.com/content/history.html (not collective2.com, professional)

 

[FGBS]

Quote from short&naked:


I rest my case

This is what we have been asking you to do for weeks, so THANK YOU and gluck with your currency trades. Looking forward to your currency trading journal as you seem to have decent fundamentals and your idea's, however contrasting to Neke's, seem valid and instructive to this board as a whole.

 

[ctrlbrk]

Quote from short&naked:
I rest my case:

Thank you, if there is anything further please start your own thread and there you can tell us how you would do it. Leave Neke's thread be.

 

[telozo]

Quote from neke:

Suppose your trade has two possible outcomes: a gain of +20% or a loss of -10% with equal chance (you know this based on years of prior experience), each trade lasting a week, and only able to hold to one position at a time. The results are compounded (good you believe in this as well!). Would you trade this scenario? What percentage of your account will you commit to each trade? What is the maximum percentage draw-down you would accept?

That's an easy one, just use Kelly's formula:
http://en.wikipedia.org/wiki/Kelly_criterion

 

[short&naked]

Quote from ctrlbrk:

Thank you, if there is anything further please start your own thread and there you can tell us how you would do it. Leave Neke's thread be.

Since you asked to nicely. Sure.

 

[short&naked]

Quote from FGBS:

This is what we have been asking you to do for weeks, so THANK YOU and gluck with your currency trades. Looking forward to your currency trading journal as you seem to have decent fundamentals and your idea's, however contrasting to Neke's, seem valid and instructive to this board as a whole.

Oh really? I haven't even noticed you until yesterday.

I kid, I kid. Alright. Actually, I probably will start a journal similar to neke's heck, I might even turn it into a gambling adventure.

All the best.

 

[neke]

Weekly Update for week 46 ended 11/28/2008

Awful week, down 59K (13%), about the same percentage the market (SPY) rose. Tells the story of the week. Found it hard to adjust to the unrelenting strength in the market. Bias is such a terrible thing to cure!

Need to be careful as we go into the end of the year. It is important to finish on a strong note, and not let it go the way of last year.

Opening Balance:               	    	448,748
Net loss for the week 		         58,733 
------------------------------------------------
Net Balance:                   		390,015
Number of Trades	            	 22
Number of Profitable Trades    	    	 8

Since Inception of Thread   01/13/2008 - 11/28/2008

Opening Balance:                   	102,615
Net gain (Less Margin Interest)		312,400
------------------------------------------------
Balance Before Withdrawal:            	415,015  (Up 304%)
Cash Withdrawal				-25,000
------------------------------------------------
Net Balance				390,015

Number of Trades	           	1089
Number of Profitable Trades        	 643


Top/Bottom Discretionary Trades for the week

TICKER	ENTRY DATE/TIME		EXIT DATE/TIME		QTY	PURCHASE AMT	SOLD AMT	GAIN/LOSS	TYPE

SPY	2008-11-24-12-24-50	2008-11-24-14-30-16	7000	581700		591500		9777		LONG
SZCLH	2008-11-24-12-12-25	2008-11-24-14-30-43	15000	60000		66750		6505		LONG
--------------------------------------------------
AMZN	2008-11-25-10-49-07	2008-11-25-11-32-27	12000	503520		488412		-15140		SHORT
BDQXF	2008-11-26-10-50-46	2008-11-26-14-02-00	4000	60000		44000		-16080		BIDU PUT

 

[cashmoney69]

why not just lock in what you made for this year, and have an early Christmas? You had a nice run...dont give it back