what is this called ?

S

SethArb

a trader makes x % in a given week

however his P+L swings up and down like a yo-yo

what might be a stat for how much is too much

( i.e. this week I might make 3 % but when I tally in the ups and downs the total is almost ten times that )

yes I do either need to be very very careful
in sizing and placement of my trades
and perhaps need to take 25-50 % of my acct's value
and place it in a bank CD so as not to give me any more
rolaids moments
 
overleveraged and a blow up waiting to happen when a streak of bad trades strike. How long has the been happening ? Have you never had a losing strike pop up and drawdown the account severely ?
 
Quote from SethArb:
a trader makes x % in a given week
however his P+L swings up and down like a yo-yo
what might be a stat for how much is too much
More...

MAE MFE
 
thanks ... not sure if that ( MFE MAE )
can be quantified in my case but it is something
for me to look into on a weekly basis
 
Quote from SethArb:

a trader makes x % in a given week

however his P+L swings up and down like a yo-yo

what might be a stat for how much is too much

( i.e. this week I might make 3 % but when I tally in the ups and downs the total is almost ten times that )

yes I do either need to be very very careful
in sizing and placement of my trades
and perhaps need to take 25-50 % of my acct's value
and place it in a bank CD so as not to give me any more
rolaids moments
More...



That sounds like a roller coaster ride! I know the feeling all to well. Be careful, as us cowboys tend to lose risk management sometimes.
 
I also meant to mention that erratic position sizes can create the same effect.

Brokers will tell you that a common denominator in traders who lose everything is inconsistent position sizes.
 
Quote from SethArb:

a trader makes x % in a given week

however his P+L swings up and down like a yo-yo

what might be a stat for how much is too much

( i.e. this week I might make 3 % but when I tally in the ups and downs the total is almost ten times that )

yes I do either need to be very very careful
in sizing and placement of my trades
and perhaps need to take 25-50 % of my acct's value
and place it in a bank CD so as not to give me any more
rolaids moments
More...

The stat to measure this is the Sharpe's Ratio (http://en.wikipedia.org/wiki/Sharpe_ratio)

It is the measure of increased gain to increased risk. Essentially it is:

(Return - Risk Free Return) / StdDev of Return

A Sharpes of 1 means you are gaining as much over the Risk Free rate as you are taking risk. Under 1 means you are taking on more Risk than you are gaining in Return.
 
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