The Perfect Edge

Higher leverage and watching this UPL jumping around will take some getting used to...I actually can see the difference with different leverages. My eye is trained and this is trading in London just now, 6 hours from now, will be rather interesting.

There are many laughing at me...but 4.75:1 is new ground for me...

I am told that when I become a real trader...that risk is the opportunity...

But I ask myself a question, would I put my money into a fund with a large Drawdown?

Michael B.
 
Quote from ElectricSavant:

But I ask myself a question, would I put my money into a fund with a large Drawdown?
More...

Yes.

Because I expect to have big drawdowns sometimes. It's all about being able to accept my losses.

I don't need to be worry about losses, because 40% of the time I win, and when I do, my homeruns offset those losses...
 
Would you trade 10% more in Drawdown to increase yield by 5% for example?

Where would you draw the line?

Michael B.



Quote from sirpangolin:

Yes.

Because I expect to have big drawdowns sometimes. It's all about being able to accept my losses.

I don't need to be worry about losses, because 40% of the time I win, and when I do, my homeruns offset those losses...
More...
 
It's funny how can I only mention that this is the end of the month. We got mediocre GDP, but the big news is in the eurozone with their upbeat confidence!

It's just not responsible to omit this from the thread...I am a trader that is from a TA background, and I am learning that Currencies are very fundementally driven and one needs to learn to live from news event to news event in this biz...

USD weakening here. Duh....

Michael B.
 
I will get the hedge on here with a long in the AUD/USD...this gets me in the middle of the teeter totter....while collecting some interest...

This put me over 5:1 leverage and I am now in 5.21:1 Leverage territory. Things are getting wild here with the UPL....It is at a DD of -3.08% and -$3,419.10

The next few days will be interesting indeed...The longer term is secure, but I need to control this DD and leverage while maximizing yield...

Michael B.

P.S. Managing this with the discretionary choices and putting on trades in the system, is very challenging and I got to control my average prices and check the correlations...ideally the optimum for the system is to flat line the basket price and collectinterest with low volatility, but with the short term trades it is to introduce trend...
 
I think I have got the bases covered for now...the market can do as it wishes....whew what a day!

All this balancing that I have done in the last 2 days and at the same time I have managed to pull nearly 1/2 percent out in trading profits and interest....IN JUST 2 DAYS

I must now concentrate and get used to the new UPL velocity. This higher leverage has changed things and I must learn how it is moving from pip to pip and why, when and by how much...it is much faster now....I depend on this knowledge...

How do you traders manage 20 30 and higer leverages...this is just gambling in my opinion!

Michael B.
 
I feel skitzo...On one hand I balance Volatility in the "basket trading as one instrument" system...and on the other hand I introduce trend to the system for the sake of pulling trade profits out...I think I will buy a Trading Jacket....and a Carry Jacket...and Wifey says I also need a straight Jacket!

sheesh I am one sick puppy...

But all this is happening and all I am accomplishing is raising the leverage and increasing the yield. But am I happy trading like this? Time will tell and the answer will be the controlling factor in my future...Because I have enough experience to know where my tolerances lay...I beleive the Holy Grail is where YOU want to trade and HOW.

If I have a true edge, raising the Leverage will increase the yield at even a faster rate...

Michael B.

UPL= -$3,452.43, DD=-3.11%, Leverage= 5.21:1
 
This feels like Friday and its only Tuesday....I am tired. I got to take little pause...and get some perspective.

Trading is the hardest and most challenging job on the planet! I am doing well and feeling ok. I got to figure out what is next. If I don't the market will surprise me as it always does...i want to be ready.

Michael B.
 
Quote from ElectricSavant:

Would you trade 10% more in Drawdown to increase yield by 5% for example?

Where would you draw the line?

Michael B.
More...

In the short term, yes. In the long term, no.

But I also know that my system over X period of time has X% drawdown and I know that I will take some losses where I may cumulatively lose 10% of my account, but the next three trades I'll make 30%, for example.

I just trust my system through backtesting and walk forward testing.

What happens when the system stops working? I stop using it at a predefined point.
 
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