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Taking 320K to 3.5million by Year End 2009
- Thread starter neke
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Good job Neke, I disagree with your approach but congratulations on your gains and (hopefully) the end of your slump.
Quote from TraderZones:
I am curious, did you ever run a TradeStation type analysis on your trading?
At minimum, Profit Factor, Sharpe/Sortino, dradown analysis, etc.?
I don't know what trade station type is - I don't use them, but I do analyse my results a lot (my code + excel) and get statistics I am interested in - profit factor (yes), sharpe ratio (sort of -whatever anyone wants to make of it), others (not sure of your definition).
Quote from neke:
I don't know what trade station type is - I don't use them, but I do analyse my results a lot (my code + excel) and get statistics I am interested in - profit factor (yes), sharpe ratio (sort of -whatever anyone wants to make of it), others (not sure of your definition).
I'd be curious about the profit factor. Not sure if a sharpe ratio below 5 years means much, though.
Quote from illiquid:
I believe partly what he is referring to is the fact that Neke's nominal returns certainly are impressive, but what kind of positions are he putting on to get them? He is day trading 5-figure share sizes (or the equivalent in options) in stocks like Amazon, First Solar, even Garmin -- volatile names to say the least. You need to compare sizes put on to returns made; for say 20k share positions on average, a weekly net in mid-5 figures means around 2-3 pts TOTAL net gain. 2 or 3 pts on stocks like FSLR or AMZN certainly is beyond noise, but not really by much when you think about it.
I trade many of the volatile names Neke trades, I only trade a max size of a couple thousand shares per position. But my daily net swings are in the mid-to-high four figures already; if I were to ever put on a position of say 20K shares of AMZN or GRMN, I would most definitely be looking for mid-5 figure gains DAILY; weekly, almost certainly over 6 figures.
That's just the nature of the stocks he trades; to me, the only way one can get into a position of 20-30k shares of AMZN (this week in particular), only to exit all for 1 or 2 pt gain, is if one continually averages down into that size throughout the course of the day and finally exits in relief. Otherwise, if one actually timed that such a position in a decent manner, a six-figure intraday profit on a single position should not be such a rare occurence on his blotter (all those stocks mentioned had earnings or news events this past week -- AMZN itself went from 94 to 120 within 2 sessions).
Please don't look upon this post as some sort of mean-spirited critique, returns in this caliber on this board are obviously pretty rare and deserve to be celebrated first and foremost. But the question of "edge", as opposed to just reserve buying power and the willingness to use it, is a valid one and one which neke should always be asking himself no matter what how his account is doing.
Edit: I know that Red Ink follows this thread as well; I would ask that he chime in on this subject as he obviously trades in equivalent or even larger sizes on an intraday time frame. I'm not yet swinging that big a bat but at least I am familiar with the stocks that are mentioned in this thread.
Quote from illiquid:
Sorry to post again (this will be the last topic of the thread I will butt my head into, promise), but I don't see how using high leverage to produce gains reinforces the idea that one has an edge. A negative edge can temporarily show extraordinary performance with extreme leverage; in fact, that's usually the only way they can. Considering neke had a pretty deep drawdown from peak only a few months ago, I don't think you can compare his trading to 10,000 coin flips just yet. Additionally, even a postive edge, using high leverage, can quickly deteriorate into catastrophe if conditions change (LTCM).
But the whole question of edge is moot. All markets change over time, what is important for longevity is understanding where and how your gains are achieved, understanding that can give you the ability to even anticipate when and under what conditions your returns will deteriorate. Leverage is not an edge; on the contrary, it just makes the slope even more slippery on the way down if that is indeed the case.
I tried to make a point for the sake of giving precaution, but now I really don't feel there's anyone listening. Good luck whenever you decide to go full-time with this.
I don't normally like replying to criticism when I am down. Now that I have somewhat of a positive week, let me give a perspective.
1) I do not make 20000 shares of AMZN at my current account level - options yes (200 contracts), but that is not the same as stocks.
2) Agree to some extent I fail when averaging in, realising the gains too quick (relief) when right, and hanging on to big losses if not vindicated.
3) Making 6 figures average a day with a 500K retail account is not realistic, even if your buying power allows you to buy 20000 shares of AMZN @ 100 (full day-trade-buying-power): The issue is how many positions can you hold, how many trades can you make a day with that size in one bet? Even if I make a trade of 20000 shares of AMZN, I would not compare myself to someone making the same size, if that is a fraction of their overall position. I make on average just 5 or 6 trades a day (round-trips), average size for a stock position is 80% of account (or 20% of day-trade-buying-power). Its a warped comparison putting the performance with someone trading similar size, perhaps has 20 such positions at one time, and completes maybe 200 round-trips a day.
4) I posed an illustration with coin tossing to make the point that trading with leverage is harmful if there is no edge. But if you believe you have the edge (positive returns in arithmetic terms), you could maximize your returns by proper leveraging (not exceeding the optimal fraction) and consistent with your risk tolerance. In the illustration I gave, its easily possible for someone with no edge risking 1% of account per trade to be positive after 100 tosses (46% chance), while it is only 0.33 % chance - (1 in 300) of being positive if risking 50% per toss. On the other hand, if you think you have an edge in coin tossing and consistently turn in 70% accuracy, you could optimise your return with a high leverage, knowing you will have to live with a higher drawdown to achieve that big return. (Caveat: not claiming my edge is that much or that I risk that much per trade).
5)Edges do come and go, but one has to be continually adapting. One task I charged myself with is getting a model for acceleration/deceleration that factors in the possibility of an edge going away: You do not want to find out too late the edge is no more there while betting at big leverage.
Quote from retaildaytrader:
...If you had just sunk it all into BIDU or APPL at the start of the year then you would be up more then you are now. You made over 1000 trades and did not get as far as some guy who sunk all his cash into a few popular stocks at the start of the year. In fact, there are some mutual funds that outperformed you this year.
.....
The dose of reality is that you did not do too well this year. You could have done a lot better.
Investors think they are king because they've caught on to one of the rare bullish runs from March 2009 through now. And everybody is a stock genius because they bought C, BAC, AAPL, BIDU at the bottom.
Let us so conveniently forget BIDU was at a high of 370 before it dropped to close to 100. And AAPL 190 before it dropped to 80. Everything is so easy to tell when you look at the market in retro.
Neke: You are up some 80% in 2009. Whether you make your 3.5 mil or not you are one of my idols in my book.
I think anybody who said 80% YTD is "not do too well this year" is beyond greed. You know what most books say about the stock market: averaging 10% to 15% a year return. That is BEFORE they have seen a -45% return in the year of 2008. You are saying 80% a year aint no good?
And BTW: Find my those mutual funds that outperformed 80% this year. And how did they do in 2008?
The point of this journal, in my opinion, is not to just cheer Neke on, but to provide constructive observation and criticism in order to assist him in achieving his goals. Sometimes that criticism is not what you want or desire to hear. I can easily sit out of this journal and provide no criticism or post cheerleader remarks when he is up and sympathy when he is down, but that would do no good for Neke. I want to see Neke get to 3.5 million so that is why I provide my honest observations.
I saw some remarks asking about my own personal performance, but this journal is not about myself. Im not saying that I am an expert in trading and I am not. However, input is valuable whether it comes from a trading expert or someone who does not anything about the markets in the first place. Its especially valuable when you are dealing with six and seven digit figures. You want input in order to better yourself and address the issues that are preventing you from obtaining your goals. You want very critical self-analysis of the way you are doing things and Im sorry if that analysis is not what you want to hear, but thats how you improve yourself through addressing the issues.
The fact of the matter is that Neke has been in the trading business for over 10 years. There were many people I knew back in March that were asking me how to open an account on TDAmeritrade. For example, a female doctor asked me to assist her with opening an account and some basic instruction on trading. She knew absolutely nothing about charts, strategies or any of this business. She saw that the market was at a bottom and got in on some mining stocks like TCK and some foreign etfs like FXI. There were also countless articles from market pundants at the time like Doug Kass and a certain short fund manager stating that this was the bottom. Even on this website there were quite a few people saying that March was the bottom.
While I saw some bottom callers in 2008, like Jim Cramer, they were few and far between. No one was asking me how to open a brokerage account and there were a lot of people doubting the market had bottomed. Some people reasoned that the usual bear market lasts 2-3 years and they thought in March it was about that time which seems reasonable. 2008 was still obviously too early for a bottom.
So my question for Neke, and many others, is how come he did not feel March was the bottom? Why get out of the market right now when history clearly demonstrates that the November to April are the best times to trade?
There is some logic in it. I did check back during the crash of the 1930s and someone who used the November to April trading system would have eeked out some gain and missed the huge plunges of the era.
This is just constructive talk and questions designed not only to make Neke think, but everyone else think as well. So far, I have seen excuses why you missed the bottom, but no one really blames themselves. If your occupation or semi-occupation is "trader" then you should be expert enough to see these things coming. How come ordinary people with no trading experience saw it? Just something ask and ponder yourselves so these mistakes will not be made again in the future.
By the way, every year is a great year to get in on something going up. I see quite a few 2-3 dollar stocks out there that have the potential to jump 200-500% in the coming times. In no way do I think this is over. Every year there are stocks that jump up in multiples, you just have to be expert enough to find them. I will give you one good one and that is QTWW. What if the United States Army decides to use the diesel hybrid engines in all of their vehicles and has QTWW make them? The Army sunk 15 billion dollars in just designing and making the Bradley and they could certainly pour a lot of money into that company where the stock could quadruple in very little time.
I saw some remarks asking about my own personal performance, but this journal is not about myself. Im not saying that I am an expert in trading and I am not. However, input is valuable whether it comes from a trading expert or someone who does not anything about the markets in the first place. Its especially valuable when you are dealing with six and seven digit figures. You want input in order to better yourself and address the issues that are preventing you from obtaining your goals. You want very critical self-analysis of the way you are doing things and Im sorry if that analysis is not what you want to hear, but thats how you improve yourself through addressing the issues.
The fact of the matter is that Neke has been in the trading business for over 10 years. There were many people I knew back in March that were asking me how to open an account on TDAmeritrade. For example, a female doctor asked me to assist her with opening an account and some basic instruction on trading. She knew absolutely nothing about charts, strategies or any of this business. She saw that the market was at a bottom and got in on some mining stocks like TCK and some foreign etfs like FXI. There were also countless articles from market pundants at the time like Doug Kass and a certain short fund manager stating that this was the bottom. Even on this website there were quite a few people saying that March was the bottom.
While I saw some bottom callers in 2008, like Jim Cramer, they were few and far between. No one was asking me how to open a brokerage account and there were a lot of people doubting the market had bottomed. Some people reasoned that the usual bear market lasts 2-3 years and they thought in March it was about that time which seems reasonable. 2008 was still obviously too early for a bottom.
So my question for Neke, and many others, is how come he did not feel March was the bottom? Why get out of the market right now when history clearly demonstrates that the November to April are the best times to trade?
There is some logic in it. I did check back during the crash of the 1930s and someone who used the November to April trading system would have eeked out some gain and missed the huge plunges of the era.
This is just constructive talk and questions designed not only to make Neke think, but everyone else think as well. So far, I have seen excuses why you missed the bottom, but no one really blames themselves. If your occupation or semi-occupation is "trader" then you should be expert enough to see these things coming. How come ordinary people with no trading experience saw it? Just something ask and ponder yourselves so these mistakes will not be made again in the future.
By the way, every year is a great year to get in on something going up. I see quite a few 2-3 dollar stocks out there that have the potential to jump 200-500% in the coming times. In no way do I think this is over. Every year there are stocks that jump up in multiples, you just have to be expert enough to find them. I will give you one good one and that is QTWW. What if the United States Army decides to use the diesel hybrid engines in all of their vehicles and has QTWW make them? The Army sunk 15 billion dollars in just designing and making the Bradley and they could certainly pour a lot of money into that company where the stock could quadruple in very little time.
For every one doctor that called you at the exact bottom wanting to know how to open an online brokerage account (and how many doctors couldn't figure out something as easy as that..), there were 10,000 Joe and Janes dumping their 401ks. Your small sampling of supposedly successful bottom callers hardly makes a sound thesis for why Neke "could have done a lot better."Quote from retaildaytrader:
There were many people I knew back in March that were asking me how to open an account on TDAmeritrade. For example, a female doctor asked me to assist her with opening an account and some basic instruction on trading. She knew absolutely nothing about charts, strategies or any of this business. She saw that the market was at a bottom and got in on some mining stocks like TCK and some foreign etfs like FXI.
Did I miss something? When did Neke's journal become the place for hucksters to pitch their penny stock pipe dreams?Quote from retaildaytrader:
By the way, every year is a great year to get in on something going up. I see quite a few 2-3 dollar stocks out there that have the potential to jump 200-500% in the coming times. In no way do I think this is over. Every year there are stocks that jump up in multiples, you just have to be expert enough to find them. I will give you one good one and that is QTWW. What if the United States Army decides to use the diesel hybrid engines in all of their vehicles and has QTWW make them? The Army sunk 15 billion dollars in just designing and making the Bradley and they could certainly pour a lot of money into that company where the stock could quadruple in very little time.
You guys are all small time. My account went to 3.5 million in the first week of the year. I started the year with 8 million.
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