When evaluating your trading results, is it proper to compare to a simple buy and hold?

[Axon]

Sorry, I just laughed at your nonsense. Am I supposed to feel insulted???

You try to present me badly, but actually, you’re doing it to yourself.

I'm glad you got that out. I hope you feel better since based on your posts it's unlikely your trading results give you any happy feelings. Now read this quick because it's back to ignore and me forgetting you ever existed.

 

[PPC]

English is my second language, but hopefully someone will be able to translate the following into proper English:

You certainly are not interested in having civilized, rational conversation, instead you immediately resort to emotional outbursts and insults like a little immature boy as a response to your unmet needs or desires. (something to think about, maybe you could work on your composure instead of repeatetly insulting people)

Maybe your “anticipated drawdowns to be somewhere in the ballpark of annual return, at most double” are the source of your insecurity and need to bolster your fragile ego.

Your reply to @Tall Mike revealed number of hints that you’re an amateur trader. Nothing wrong with that, everyone is on different path, however your nonsensical babbling in your response to him was self-serving without any value, a reflection of inexperienced trader. For clarification purposes, my definition of experience in not based on time, but rather on knowledge and ability to trade)

Also, your option knowledge and strategies would benefit from bit more insight (you’re not the only one who trades options) but it was fun to read

See you

 

[Tall Mike]

English is my second language, but hopefully someone will be able to translate the following into proper English:

You certainly are not interested in having civilized, rational conversation, instead you immediately resort to emotional outbursts and insults like a little immature boy as a response to your unmet needs or desires. (something to think about, maybe you could work on your composure instead of repeatetly insulting people)

Maybe your “anticipated drawdowns to be somewhere in the ballpark of annual return, at most double” are the source of your insecurity and need to bolster your fragile ego.

Your reply to @Tall Mike revealed number of hints that you’re an amateur trader. Nothing wrong with that, everyone is on different path, however your nonsensical babbling in your response to him was self-serving without any value, a reflection of inexperienced trader. For clarification purposes, my definition of experience in not based on time, but rather on knowledge and ability to trade)

Also, your option knowledge and strategies would benefit from bit more insight (you’re not the only one who trades options) but it was fun to read

See you

which user are you quoting?
I don't see anything but these as comments on the post.

 

[Drawdown Addict]

Late to the party, just my two cents.
When I read Ernest P Chan books on automated trading he pointed out a couple of times that an algo that does not improve over a buy and hold investment should not be used for trading.
It does make sense, why would you go for the trouble to set up a trading practice if you could just wait for your money to grow peacefully.

 

[PPC]

which user are you quoting?
I don't see anything but these as comments on the post.

The quote was from @Axon’s post #3, he believes in very volatile equity curve with massive drawdowns, and he doesn't seem to believe in cutting losses (worst advice one can give), here it is highlighted:

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

My last two responses in this thread was to his immature insults and name calling.

There are quite a few people on this (and other) forums that don’t know how to trade, they just post for narcistic reasons instead of trying to help.

At the same time there are also many good traders on this forum helping others, but one has to scroll through lots of nonsense in many threads to get to the good stuff.

 

[murray t turtle]

Hi Mike,

ignore the replys above, they’re inexperienced traders and they replied nonsense.

Here is the thing. Because you’re inexperienced, whatever you’ll do will initially fail, and if it will work.... and won’t last long. We all went through it. Trading is a craft, you need to slowly chip away at it, and it takes years of frustration. You need to be realistic and stay committed.

To your question, yes, the strategies need to outperform buy&hold.....

In your other thread, I wrote “computer tested methods will down the road result in inefficient use of trading capital vs learning to trade and manual backtests (you have to pick your poison)”.
What I meant is that computer tested methods usually lack robustness (“one size fits all”), are dependent on market conditions, have large drawdowns and the annual profits are very low.

%%
MOSTLY right ;
except TAndy gave you some points about doing> better than SPY. 80% dont
Before any get to excited a bout a sharp ratio check out a sharp ratio on on 10 year SPY, 10 year SSO.
I tend to edit out fake words like ''luck''

 

[Illini Trader]

The whole purpose of trading is two fold:

1. Beat the Buy and Hold strategy
2. Avoid the bear market drawdowns that are guaranteed in buy and hold

How you do that is the difficult part. Day trading is theoretically the ideal way because each day is a universe all unto itself and independent of all longer term trends. But, it is the by far the steepest and longest learning curve and only a few eventually make the grade.

Otherwise, you just have to figure it out. Something that works for you.

 

[ironchef]

The whole purpose of trading is two fold:

1. Beat the Buy and Hold strategy
2. Avoid the bear market drawdowns that are guaranteed in buy and hold

How you do that is the difficult part. Day trading is theoretically the ideal way because each day is a universe all unto itself and independent of all longer term trends. But, it is the by far the steepest and longest learning curve and only a few eventually make the grade.

Otherwise, you just have to figure it out. Something that works for you.

#1. Absolutely, otherwise, why trade? Might as well go fishing.

#2. With a 20 year time horizon, most time periods have positive returns, no drawdowns.

 

[deaddog]

#1. Absolutely, otherwise, why trade? Might as well go fishing.

#2. With a 20 year time horizon, most time periods have positive returns, no drawdowns.

What do you consider a drawdown? In a 20 year time period I would expect several drawdowns.
I would also expect an investment in a market ETF to be higher. Although it might be quite a rollercoaster ride to get there.
Not so much with individual stocks.

 

[murray t turtle]

#1. Absolutely, otherwise, why trade? Might as well go fishing.

#2. With a 20 year time horizon, most time periods have positive returns, no drawdowns.

%%
Good ;
#2 sounds more common with longer trades or investments, than daytrades.
Some exceptions may apply.