Taking 410K to 4million by Year End 2010

[neke]

Quote from neke:

Lost 102K in stock and 14K in options.

Correction: That should be 102K in options and 14K in stock.

I have seen all the argument about leverage. I still believe my intended size is appropriate to my trading. That BIDU option trade was made with 50 contracts initially knowing the option is close to expiration. Had I stuck with that I should not be in as bad a situation as this. Even if I averaged but stuck to the averaging down rule I once posted not to exceed three entries and never more than 2 hrs from first entry (since refined to 2 entries within 1 hr of first entry), the pain would still be tolerable.

Leverage comes with drawdowns of which I am well aware, but it is when I ignore all my laid-down rules that is when the pain hits harder. It is clear I need to work on extricating myself emotionally from a trade, and let the rules be the rule.

It would be nice to have a broker with trading platform that enforces risk management rules beyond merely checking buying power or day-trade buying power before an entry is allowed. Ideally I as a user should be able to set my maximum per-trade loss at, say 6%, and the the trading platform at the point of initiation of position should check whether there is a probability of say 10% or more that could be hit intra-day on that position, and reject the order because the risk is above the parameters I chose. Any request to change the parameter (from 6% to say 10%) would take a number of days to be active (so I do not change it on emotion of the moment). I could develop a platform like that, but the bigger issue would be ability to override it (by going straight to the brokers interface), which is why I would like the rules to be bound to the account -- broker side. The summary of this ramble is that I am disappointed there are not enough options for risk-setting / automated risk-management on available broker platforms.

 

[Pension_Admin]

Here is a video I view regularly to keep my emotion in check.

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/OVyrCvPntSQ&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/OVyrCvPntSQ&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

Perry let his emotion got to him and got wiped out. The market works the exact same way. It will get you to make a mistake, wipe you out, and would not hesitate to insult you afterward (either in a form of a message board posting or some other kind).

PA

 

[lojze]

Quote from neke:

.......I need to work on extricating myself emotionally from a trade, and let the rules be the rule.

It would be nice to have a broker with trading platform that enforces risk management rules beyond merely checking buying power or day-trade buying power before an entry is allowed. Ideally I as a user should be able to set my maximum per-trade loss at, say 6%, and the the trading platform at the point of initiation of position should check whether there is a probability of say 10% or more that could be hit intra-day on that position, and reject the order because the risk is above the parameters I chose. Any request to change the parameter (from 6% to say 10%) would take a number of days to be active (so I do not change it on emotion of the moment). I could develop a platform like that, but the bigger issue would be ability to override it (by going straight to the brokers interface), which is why I would like the rules to be bound to the account -- broker side. The summary of this ramble is that I am disappointed there are not enough options for risk-setting / automated risk-management on available broker platforms.

Neke and other active traders, as this is not available, what is an option to put emotions out of the game?

 

[Mike805]

Quote from neke:


It would be nice to have a broker with trading platform that enforces risk management rules beyond merely checking buying power or day-trade buying power before an entry is allowed.

...

The summary of this ramble is that I am disappointed there are not enough options for risk-setting / automated risk-management on available broker platforms.

This is BS. Assume responsibility for not controlling your risk.

If anything, you should be disappointed in yourself for not planning prior to, and, enforcing strict risk controls during the BIDU trade.

Anytime I hear someone complaining that an external issue can somehow resolve their internal issues, I immediately conclude that the person in question does not have full control of their actions. I'm not saying this is you, but, you're going down a slippery slope with that last statement.

http://en.wikipedia.org/wiki/Agency_(philosophy)

Mike

 

[crash n burn]

Quote from lojze:

Neke and other active traders, as this is not available, what is an option to put emotions out of the game?

risk 1% per trade, not more than 2 trades per day

can you do it?

if not, then move to another venture

 

[neke]

Quote from Mike805:

This is BS. Assume responsibility for not controlling your risk.

If anything, you should be disappointed in yourself for not planning prior to, and, enforcing strict risk controls during the BIDU trade.

Of course I assume responsibility for my action. But if a feature could be helpful for a trader, what is wrong with requesting it? It's like saying brokers should not have a stop-loss order feature because people should bear responsibility for when to exit a trade. If it can be automated effortlessly, why leave it to the manual and subjective?

 

[JJacksET4]

Quote from Mike805:

This is BS. Assume responsibility for not controlling your risk.

If anything, you should be disappointed in yourself for not planning prior to, and, enforcing strict risk controls during the BIDU trade.
Mike

Mike,

Thanks for posting that and I agree 100%.

Neke, I read your last post as well and here is the thing - if this "feature" were available, would you have been using it during some of your biggest risk taking? Let's say you had - you limited your risk and the broker forced you to wait several days to change it. You would have found a trade you really wanted to do and then got upset with the broker for not allowing it now and then you would be complaining that you missed a trade.

It is not the same as a stop loss as you can still do whatever trading you want with that, and you can change your losses at any point. To add a "feature" that would take a "wait time" to change would just cause the brokers to get people to complain that they missed a trade because of that setting.

Another thing to compare this to - your car has seatbealts, maybe airbags, and 100s of little safety features, but it doesn't decide when or where you can drive - if you decide to go out say in the dark, during a heavy rain storm and into a dangerous area, the car won't stop you from doing so, will it? Would you want a setting like that? (i.e. car won't go into drive if rain is over certain amount and it's dark out, etc.). People have to make their choices and live with them.

I have been hesitant to post on your thread because I do read it alot and sometimes there are alot of other posts that go back and forth and so on, but I agree with Mike 100% on this one and really feel strongly about it.

In conclusion, If your broker had this kind of feature, I bet that either you would never actually use it anyway, OR IF you did use it, you would end us missing out on a good trade and would then blame the broker.

JJacksET4

 

[Mike805]

Quote from neke:

Of course I assume responsibility for my action. But if a feature could be helpful for a trader, what is wrong with requesting it? It's like saying brokers should not have a stop-loss order feature because people should bear responsibility for when to exit a trade. If it can be automated effortlessly, why leave it to the manual and subjective?

There's nothing wrong with requesting it. My concern is that you're requesting it after the fact, and, the "behind the lines" meaning of what you're saying.

Its been a few years neke and I've been watching your progress for a while now. This "abnormal large loss" issue is a consistent event in your day-to-day operation.

I'm sure you know that a risk controlled trading operation removes the user's falibility from the process as much as possible. If your goal was to properly remove the potential of these abnormal losses occuring, you would have done it regardless of the external abilities of the broker/software package you've choosen to use. Unless, of course, you enjoy the gambling element involved (which I think we all do to some extent).

If we were to count how many times you've made a similar mistake, what number do you think we'd arrive at? I would speculate that it would be a rather significant number.

To me, its been obvious you need to remove yourself from parts of the trading process. Personally, as I've said a few times over the years, I think this is best done through automation and subsequent strict adherence to all rules. That said, automation is the method I've choosen so it may not be suitable to all. At this point, seeing as how you've choosen to proceed without proper risk controls, I am inclined to believe you enjoy the gambling aspect of trading, which is fine given your goals, but, this is an easy thing to change, given that you really want to change it...

Mike

 

[volente_00]

Just curious why you were trading options controlling 13 mil of underlying on a 400k account ?


What can be learned from this is


NEVER FALL IN LOVE WITH A POSITION,


no matter how right you think you are.

 

[NoDoji]

All Neke needs to limit his largest losses is to write a program that prohibits access to his trading account on the 3 days into options expiration. Neke, deduct your losses over the past couple years during these 3 days each month and let us know how much additional $$$ you'd have in your account with such a feature in place.