Why not 3%? It would take you 33 losing trades then. Or 4%, 25 trades?
smalfil will reveal the statistically valid method as to why it should be 2% (or less). Can't wait!
What to do with my life?
- Thread starter shotstakovich
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Why not 3%? It would take you 33 losing trades then. Or 4%, 25 trades?
smalfil will reveal the statistically valid method as to why it should be 2% (or less). Can't wait!
Hard, but certainly not impossible. The real question is why do you think you want to work for a hedge fund?
In either case, could you explain why do you think you would be able to extract money from the markets? I.e. what is your edge?
My edge has largely been fundamental, but want to develop skills in technicals, sentiment, etc.
Where I have been most profitable has been in situations where market sentiment is at an extreme, and where I have a differing opinion and can express that opinion fairly cheaply.
Probably my proudest trade this year was shorting NVDA at $260. Implied vol was at historic lows, management was promoting the GPU as the future leader in AI, sell-side analysts were upgrading the stock due to AI excitement, etc. I also thought it was interesting to see how many chip stocks were selling off and NVDA - which had a historical technical correlation with some of those stocks - suddenly diverged.
I believed that there was serious competition in the AI space, and I also believed management was downplaying the excess second hand GPU inventory used for crypto-mining. I bought a bunch of long term put options, and went long the equity to hedge my initial delta position. I didn't re-hedge as the stock fell.
Similar story with MU: Relatively cheap implied vol, bulls thought memory prices were going to up forever, yet capacity expansion in the industry was expanding rapidly, there were also signs of demand destruction. One of my favorite Stanley Druckenmiller quotes involves trading cyclical stocks (something along the lines of: buy when capacity expansion shrinks, sell when it expands).
I believe these percentage rules like 2% trade size and max loss were rules espoused by the early big name pioneers of trading theory. Can't recall who they were now, but many years ago I once read many of the trading classic books and this was the guidelines thrown about by many gurus.
How many years of track record do you have ? You only mentioned this year. You will require a few years especially for a swing trading approach.
5% peak to valley max draw down on high 2 digits return for a few years on a scalable strategy I'm sure you can find something that will back you. I certainly would if you had 5 years of similar record and proper structures in place.
5% peak to valley max draw down on high 2 digits return for a few years on a scalable strategy I'm sure you can find something that will back you. I certainly would if you had 5 years of similar record and proper structures in place.
I've been trading for 5 years. The first three years I doubled my money following a value investor approach, and then i suffered a large loss on a very concentrated bet.
Over the past two years I started to become profitable, implementing options to express my mostly fundamental views on direction and volatility on individual companies. Occasionally I'll put on a technical trade if I believe the r/r is attractive, although these are much smaller positions.
I know IB has a nice graph showing a trader's NAV over time, but I dont think td Ameritrade has that. I may have to switch over to IB.
I would suggest to write them a thank you letter and ask them to give you the truth of why. Tell them their honesty will be considered as a big favor. But I suspect that you already know ... You don't have an answer to @sle question. You probably don't have enough knowledge/skill to impress professionals. And if you did they might have just brain raped you and let you go. This is not a put down. It's a common challenge. I think your friend is right, concentrate on who you know, not what you know to get the foot in. Good luck.