Taking 410K to 4million by Year End 2010

[taowave]

Kon,wasnt referring to you at all....

Its "disturbing" to see all these keyboard warriors spew trading 101 at a guy who has the balls to lay it all out there for all to see and attempt to make 10 fold on his money.....

Its like going into the ring with the heavyweight champ of the world and telling me to keep my hands up,chin down and dont get hit..

Quote from konviction:

hows what i said negative? It's an honest question.

 

[bwolinsky]

Quote from freewilly:


A guy who made his 10 millions in trading told me, in the first million dollar you make, be prepared to lose $100K in one trade.

Get to know this guy, b/c he is saying max dd is 10%... on 1 trade. He knows his shit. You've got a good friend. I hope you kept in touch.

 

[bwolinsky]

Quote from oraclewizard77:

The funny thing is if you work for a hedge fund, and screw up, you can call you buds at the Nasdaq to bust the trade for you. I am sure if the trade worked out, they would not call.

Not entirely accurate, but this is a historic case of happening to MVP-3 where an enormously large "institutional order", mostly from the same brokerage firm dumping millions of shares of a sub 500k volume stock on either MVV or MZZ, I can't remember which because the effect is the same. That's the only "bust" I've heard about in what is essentially a "swap contract" that even with that many share sizes the trader probably realized he was a dipshit and just should have hedge with a swap directly. Too bad ETF's have the decimilization limitation, but I think next level trading should offer an infinite number of digits of pricing, don't you think?

 

[bwolinsky]

Quote from NoDoji:

....I call this "miss the boat" disease and I struggle against it every day. You're afraid of missing that nice reversal so you jump in when price "seems" to be too high or too low, figure you'll average down if it moves against you and end up getting a profit when it finally reverses.

But you're underestimating the power of crowd sentiment. One of my ET mentors noticed I was always trying to counter-trend trade based on price being "too high". As a result I missed fantastic breakouts and trend following trades. (I'll never forget the day in July when ES was pushing major resistance @ 954 and even though he always told me to trade those breakouts because they indicated strength, I was afraid to because price was "too high", it pulled back from there the day before and surely it would reverse there again. I believe I left a 20 pt move behind that day by not trading in the direction of strength.) He finally got through to me: If price is trending in a direction it will tend to keep going unless something changes the crowd sentiment. If price breaks through a support or resistance level, that's a sign of extreme strength or weakness.

Always look for continuation until price action proves otherwise. That's why W bottoms and revers M tops are so powerful. They occur at the end of strong moves and indicate that sentiment is changing.

Which brings us back to X. On 2/5 X left behind a standard reversal pattern of a hammer at the bottom of a downtrend (very close to a W bottom from the 1/29 low). Then a higher low on 2/10 provided confirmation for the conservative longs and resulted in 3 strong days up. Tuesday was a gap and go, with price breaking through the 20-bar moving average. DO NOT SHORT THIS KIND OF STRENGTH. Wait until the price action tells you whether it's really overbought and ready for a breather or if there's more gas in the tank.

I didn't wait for confirmation on X Wed morning, but I had a stop in place that limited my risk to around $60. I wouldn't average down if it showed further strength that day; I'd wait until a lower high was put in.

One last thing, check out www.shortsqueeze.com. X has large short interest, a "days to cover" ratio of 17 and a very high squeeze ranking meaning any bullish move in the price will be heavily amplified by short covering. Don't underestimate how far these stocks can rise even if the company is the worst one in its sector.

Or more shorting. When will the investing public understand when 17% of the float is short, there's almost definitely insider information involved. Don't lose sight of that.

As far as research goes, being a financial analyst is about "making time to listen and read" to form an opinion with a reasonable basis under theoretical puzzles called "The Mosaic Theory." The irony is that anyone with even 1 share in the company can request the complete information pack and slideshows and even actual conversations with financial analysts. The investing public then forms their opinion by factoring an "unknown inefficiency" of mispriced nonpublic information. There is nonpublic information that may or may not be "relevant", so knowing that Hank Paulson had lunch with Citigroup the night of the bailout doesn't have anything to do with problems at that company... or does it? If there's even a doubt in an analyst's mind, they simply watch for the market's move and keep track of "institutional block volume." This lead to VWAP and the idea that a "market depth charge" of selling is not necessarily harmful to the investing public at large.

 

[asiaprop]

absolutely agree, BUT: When you actually hit such draw down you need to adjust your position size, tighten stops, slow it down to avoid a complete wipe out. Every experienced trader knows that, unless you treat trading as a complete gamble there is no other choice, sure it takes longer to make it back.

What you suggest is to continue with the wild ride. Neke has the free choice but best advise is to adjust to the new account level.

Quote from taowave:

Neke,pay no mind to these nannnering neighbobs of negativity..If anyone has traded for more than 30 seconds,they would understand that a 40% drawdown is to be expected when attempting to take 410k to 4 mil by year end...

 

[Trader666]

Tell that to Warren Buffett.

Quote from MarketOwl:

Those trying to make 20% a year trading stocks will never get rich unless they already are.

 

[asiaprop]

beautiful, so true and applies to almost any wealthy investor/trader. Name someone who really made it in this business by risking 10+% of his account on a daily/weekly basis. I claim there exists none.

Quote from Trader666:

Tell that to Warren Buffett.

 

[mastacoli71]

Quote from neke:

Weekly Update for week 6/50 ended 02/20/2010

D-E-P-R-E-S-S-I-N-G week, down 57K (20%).

No words to explain the disaster that happened. Began on Tuesday, with what was supposed to be 100 contracts of X FEB 50 PUT worth 16K that I initiated via a Trade-Trigger. Unfortunately, there were double executions (was in the process of modifying the trigger when it fired - didn't know and the replacement caused another execution): When I realized that, I was coming dangerously close to the max loss of 6K. Instead of closing it out, decided to double down with 100 X FEB 55 PUT (worth 98K) in a bid to break-even. That was not to be. Instead the stock kept moving against me, I exceeded the max loss, and nothing fired (realised that my program was unable to process the new option symbology format), and I lacked the will to close the losses. Finally closed it when it was unbearable, losing 17K in one, 18K in the other, and the stock position was closed out at the max loss of 6K. That defined the rest of the week as I couldn't get anything right. No gain worth mentioning.

There will be no manual trade entry anymore from now till end of March, as I seek to prevent this draw-down from becoming a blow-up. Only entries initiated by my automation, or triggers entered before 9:30am will be allowed. I shall program the system to automatically close out any manual entry initiated between 9:30 amd and 4:00pm. I shouldn't even login to my account except between 3:45pm and 4:00pm, just to check no unintended open position is being left overnight by the automation.

Looking forward to better times. This bleeding has to stop!

Opening Balance:               	    	286,952
Net loss for the week 		         56,661
------------------------------------------------
Net Balance:                   		230,291

Number of Trades	            	 18
Number of Profitable Trades    	    	  5


Since Inception of Thread   01/10/2010 - 02/20/2010

Opening Balance:                   	410,000
Net loss(Less Margin Interest)		179,709 (Down 44%)
------------------------------------------------
Net Balance				230,291

Number of Trades	           	301
Number of Profitable Trades        	139

Top/Bottom Discretionary Trades for the week

TICKER			ENTRY DATE/TIME		EXIT DATE/TIME		QTY	PURCHASE AMT	SOLD AMT	GAIN/LOSS	TYPE
	
X			2010-02-16-09-45-46	2010-02-16-10-40-20	5000	255496		249223		-6290		SHORT
QHBFEB202010120.0PUT	2010-02-19-09-38-05	2010-02-19-11-04-09	5000	22915		15250		-7744		FSLR PUT
XFEB20201055.0PUT	2010-02-16-10-03-06	2010-02-16-13-18-50	20000	98000		80950		-17325		X FEB 55 PUT
XFEB20201050.0PUT	2010-02-16-09-35-36	2010-02-16-13-20-57	20000	31368		13400		-18249		X FEB 50 PUT

You seek to prevent this drawdown from becoming a blowup??? Hate to inform you but you blew up the week you drew your account down 10%. Step back, take a look at what caused all this and STOP doing it! It is that simple.

Trying to get back the 44% drawdown with homeruns is not the way to go about getting back on your feet. It is singles that will get you back on your feet.

 

[DblArrow]

Quote from mastacoli71:

You seek to prevent this drawdown from becoming a blowup??? Hate to inform you but you blew up the week you drew your account down 10%.

Ok, gotta clarify - you consider any draw down of 10% or greater a blowup??

Seems to me a tad on the side of ignorance.

 

[asiaprop]

he was talking about the drawdown of the week.

Quote from DblArrow:

Ok, gotta clarify - you consider any draw down of 10% or greater a blowup??

Seems to me a tad on the side of ignorance.