Taking 410K to 4million by Year End 2010

[Millionaire]

Quote from MarketOwl:



2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.

No the correct approach is to make smaller bets but more of them.

Risk 2% on each of 10 trades instead 20% in one.

Neke is making 1000+ trades a year, he doesnt need to bet big to make huge returns.

 

[NoDoji]

Quote from MarketOwl:

Most people here criticizing neke have no idea what it takes to make big money FAST. Sure, you can be conservative and eek out profits steadily but SLOWLY. It is clear that neke wants to make money FAST. In order to do that, you have to have 2 things.
1. An edge. If you have an edge, you will make money.
2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.

"If you have an edge you will make money."

"You have to be able to deal with big drawdowns if you want to make high returns."

Why would you have to deal with big drawdowns if you have an EDGE???

Here's one of many day trading strategies that provides an "edge":

Using a 5-min chart, wait for the first 30 minutes to establish intraday support and resistance, then sell the first lower high of the day or buy the first higher low of the day with a stop placed just outside the lower high or higher low.

Look at some of the popular day trading stocks Friday and notice how this tactic would play out:

AAPL short for a $3/share gain
BIDU short for a break-even stopout or a small scalp
CAL short for a .45/share gain
X long for a .60/share or better gain
POT short for a 1.00/share or so gain
HIG short for a break-even stopout

And this edge still managed to work on a day when the largest move for most stocks was over in the first 30 minutes.

I agree that leverage is required to make big bets, but don't ever confuse leverage with an actual EDGE.

 

[MarketOwl]

Quote from NoDoji:


Why would you have to deal with big drawdowns if you have an EDGE???

Because the edge is not 100%. Even with a very good 3-2 win ratio on 1 to 1 risk reward trades, you will have occasional bad streaks of more losses than wins. That's where you get big drawdowns.

By the way, have you ever traded $400K like neke? You sound like a know it all but don't have the results backing up your words.

 

[MarketOwl]

Quote from Millionaire:

No the correct approach is to make smaller bets but more of them.

Risk 2% on each of 10 trades instead 20% in one.

Neke is making 1000+ trades a year, he doesnt need to bet big to make huge returns.

What? Maybe he has a smaller edge than you think and needs to lever up to get the type of returns that he's been getting.

 

[Trader666]

Great recipe for LOSING BIG MONEY FAST.

An edge doesn't guarantee you squat if you squander it with a series of oversize "bets" and bad decisions.

Quote from MarketOwl:

Most people here criticizing neke have no idea what it takes to make big money FAST. Sure, you can be conservative and eek out profits steadily but SLOWLY. It is clear that neke wants to make money FAST. In order to do that, you have to have 2 things.
1. An edge. If you have an edge, you will make money.
2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.

Seems to me that neke has both, and is willing to risk big sums to make big returns. That's how you make big money. Not by overexcessive risk control.

 

[NoDoji]

Quote from MarketOwl:

Quote from NoDoji:


Why would you have to deal with big drawdowns if you have an EDGE???

Because the edge is not 100%. Even with a very good 3-2 win ratio on 1 to 1 risk reward trades, you will have occasional bad streaks of more losses than wins. That's where you get big drawdowns.

By the way, have you ever traded $400K like neke? You sound like a know it all but don't have the results backing up your words.

Firstly, I have not traded a $400K live account, but have traded a large sim account from July through the present and found that using leverage as an edge instead of waiting for ideal setups and playing them big is a loser's game.

Secondly, I'm a noob, having less than 2 years total trading experience and only a year and a half of day trading experience.

Thirdly, trading is my sole source of income and my live trading account size is around $52K, so I cannot safely be a cowboy (er...cowgirl) trader. Instead I have to use my positive expectancy and patiently wait for ideal setups. I still screw up by being too patient and missing great trades and by occasionally overtrading and churning to a loss, but at least my losers are small now.

Finally, I achieved a 40% return last year DESPITE some significant losses (one of them over 10% of my account) where I averaged into losers or held them way too long because surely the market would come to its (my) senses.

P.S. if you have bad streaks of losses resulting in big drawdowns, then you're edge is failing and it's time to start fresh.

 

[lescor]

Quote from MarketOwl:

Most people here criticizing neke have no idea what it takes to make big money FAST. Sure, you can be conservative and eek out profits steadily but SLOWLY. It is clear that neke wants to make money FAST. In order to do that, you have to have 2 things.
1. An edge. If you have an edge, you will make money.
2. Balls. If you don't bet big, you will have a hard time making big returns. You have to be able to deal with big drawdowns if you want to make high returns.

Seems to me that neke has both, and is willing to risk big sums to make big returns. That's how you make big money. Not by overexcessive risk control.

If you're going to go that route then you better have: 3. Good luck. Positive edge + betting big sounds like the path to riches until you get more consecutive losing trades than you bargained for.

 

[MarketOwl]

Quote from lescor:

If you're going to go that route then you better have: 3. Good luck. Positive edge + betting big sounds like the path to riches until you get more consecutive losing trades than you bargained for.

Yes, it is a dangerous path. No doubt about it. A bigger edge makes it less dangerous. But following the Kelly formula, if you have a big edge, its best to bet big in order to increase the account size at the fastest rate. After big losses, one must of course adjust bet size down with the newly shrunken account base, and after big wins, increase bet size.

 

[lescor]

Quote from MarketOwl:

Yes, it is a dangerous path. No doubt about it. A bigger edge makes it less dangerous. But following the Kelly formula, if you have a big edge, its best to bet big in order to increase the account size at the fastest rate. After big losses, one must of course adjust bet size down with the newly shrunken account base, and after big wins, increase bet size.

Russian roulette has great odds, you win 5 out of 6 times. But the downside of losing is it knocks you out of the game. Risking a large % of your account to try to win big is dumb if you plan to do this long term. Capital preservation should always be goal number one.

 

[crash n burn]

Quote from MarketOwl:

Yes, it is a dangerous path. No doubt about it. A bigger edge makes it less dangerous. But following the Kelly formula, if you have a big edge, its best to bet big in order to increase the account size at the fastest rate. After big losses, one must of course adjust bet size down with the newly shrunken account base, and after big wins, increase bet size.

you sound immature

you talk about the edge as something you've been chosen to possess and then quantify it as "bigger" or "smaller".

it is not like that

you might have an edge during one hour/day/month/year and then it is gone. but you'll never know it until the drawdown becomes painful, whether using kelly formula or anything else. in fact kelly is absolutely irrelevant because it is based on knowing in advance what is going to be your W% and W:L ratio, which is wishful thinking.