Agree!
what's your Jack Hershey trading system win/loss ratio ?
- Thread starter Wallace
- Start date
Agree!
I don't know any of 4 guys I talk to that compound. They trade with a fixed amount in their account and pull profits monthly, maintaining that fixed dollar amount. I would imagine it has to do with the confidence of their set ups.
I agree that compounding 8 points a day would result in massive earnings but I know from my own system that I have limits I set based on the number of contracts I can trade on my charts. The only way I can increase profits over those limits is to trade multiple symbols. If I do that, day trading, it becomes a huge distraction. Automation is the only solution to that problem and like I said earlier, I do not believe Jack's method has been automated. I know I have had my own issues automating my method and it is a lot simpler than Jack's.
Let me just say I have looked into it and I am not impressed. Yes it works but the effort one has to put into it, for me anyway, isn't worth the results.
Just for the sake of the problem, not that I believe it really relates to JH....
OK, let's say the trader has psychological issues with too many contracts, but otherwise is a solid, consistent and profitable trader. There are at least 2 ways around the psychological barrier:
1. Very conservative compounding.(linear, not exponential) Start with a throw away account of 1K and 1 contract and compound only in every 5-10 days. The account should be at 3K-5K at that point when the first increase of contracts happens. He can even take out a decent chunk, the compounding still continues...
2. Use a backer with big money, give him signals, but don't actually know how many contracts are traded. This way he only sees his own little account and hopefully doesn't get effected by big numbers....
OK, let's say the trader has psychological issues with too many contracts, but otherwise is a solid, consistent and profitable trader. There are at least 2 ways around the psychological barrier:
1. Very conservative compounding.(linear, not exponential) Start with a throw away account of 1K and 1 contract and compound only in every 5-10 days. The account should be at 3K-5K at that point when the first increase of contracts happens. He can even take out a decent chunk, the compounding still continues...
2. Use a backer with big money, give him signals, but don't actually know how many contracts are traded. This way he only sees his own little account and hopefully doesn't get effected by big numbers....
I'll explain this as it relates to my charts. From what I know of Jack's stuff the same parameters sort of relate.
I trade with a fixed amount in my account and day trade a couple charts. I have enough in my account to trade 3 contracts on each chart (if I get set ups on each chart at the same time which doesn't happen a lot). I average about 2 to 3 trades a day per chart.
I only trade 3 contracts, not because of confidence, but because if I trade more than that I will increase the slippage and decrease my profits per trade based on the specific chart I trade.
I make a great living doing this. I won't tell you how much but way more than your think. That being said, why increase my size. I currently earn way more than I need and once I finish automating what I do I will simple spread out the trades and kick back into retirement.
Compounding is for people that think their edge will disappear so they beef up the front end believing the back end will disintegrate at some point. My pond is stocked daily and will be forever. When the pond stops getting stocked we are all in for a world of hurt. I have no need to net 100's of fish and freeze them each day. I simply fish for what I need each day and go home.
)If we are talking about ES, it takes way more contracts than 3 before you experience slippage issues. But even with a small slippage, with increased size, profit should increase too.
Theoretically speaking, a trader should optimize his trading as much as possible. Meaning making as much money as possible in the safest way. So if there is way more money in your system, why leave it there???
Let's say you are a hotel owner, not a trader. Your rooms go $100 a night, but because of your unique location, you could charge as much as $300 and get away with it. So why not charge way more than $100, if the circumstances are right??? You could still donate the extra money for your favorite charity...
Somebody making "8+ points a day" for two years should now be trading hundreds of cars, and worth millions if not tens of millions.
Is that in fact the case?
These stories come up all the time; people making claims of fantastic profits, with years-long track records... but for some reason they're still stuck at one car. It all sounds like so much nonsense to people who know what profitable trading on something like ES actually looks like.
Eight points seems conservative, by a factor of 10 or so. Isn't Jack said to make three times the daily range?... That would be about 80 points a day.