Weekly Update for week 14/50 ended 4/20/2012 Bad week, down 3.5K (2.2%). Bad start to my comeback strategies as there were several holes that needed to be closed. Was in such a hurry to start trading them. Code: Opening Balance: 163,811 Net loss for the week (3,551) ------------------------------------------------ Net Balance: 160,260 Since Inception of Thread 01/18/2012 - 04/20/2012 Opening Balance: 203,729 Net loss (26,469)(Down 13%) Cash Withdrawal (17,000) ------------------------------------------------ Net Balance 160,260
I think this thread and it's predecessors illuminate how hard it is to differentiate luck and skill at trading. If one were to look at just the first few years you would swear it was skill but now I hate to say it but , it looks like it was all just luck. Sorry but that's how I see it and it should concern every trader here as it relates to the confidence (in a statistical sense) of the existence of their "edge"
This is not merely a trading journal, but an object lesson in how deep the hold this game can get into one's hopes. It's not my business, and I am not asking to have Neke answer the questions publically, but does your wife know how bad it has gotten? Does she know that this account has now become a source of money from which you must draw upon to fund your lifestyle? Again, none of my business. I'm not looking for or expecting you to answer here. I simply am offering somethings for you to consider if you have been bearing this trial alone without the knowledge of your wife. In short, as you now need to draw on these funds to the tune of 60K/year to maintain your family, you are no longer trading with money you can aford to lose. You are not playing with risk capital. You are trading in your family's financial future well-being.
I tried looking for the commercial where the dog stops the guy from making a stock trade that would have lost his family's future, including their kids college fund, vacation, and other things. This feels like that situation, and I couldn't find it on youtube or else I would have posted it. I guess I don't remember who the commercial was wrote by, but neke needs to get one thing straight: he has no edge. If you are not realizing by now that backtesting in strategy desk is nothing but curve fitting, I can see why he's losing money because his indicators are not robust to last past the first 3 minutes of walk forward testing. If there was a real edge here, he wouldn't be losing weekly hardly at all, but he's convinced himself to stay on with them despite overwhelming evidence that it has changed the course of his life, and I don't like having to appear spiteful or say I told you so because I've been conveying that same advice on his journals for 3 threads now. Neke, seriously, just show us your performance summaries. If you're day trading 1.3-1.6 is good PF. If you're swing weekly trading, 2+ is the minimum acceptable for 10% volatility, and if you don't want to show us your backtests that's just foolish. Did it ever cross your mind that some of us really want to help you, and gambling is not the answer. Though you may say you trade systematically this is not a robust system, and if your strategies aren't winning 70+% of the time on their swing trades, or 60% of the time on day trades, it's doomed to fail. Even after paying taxes there's no question you haven't made any money at all and should have stopped when you hit $100,000 and walked away and gave it to a pro. Trading like this is gambling, and I've always noticed when he used to post his trades the sheer randomness of what he was doing trading nonsensical watchlists with no place in anybody's portfolio but as another security to gamble on and feed the trading addiction. You know, until there's something that wins 80% of the time you can leverage up on that every once in a while, but options trading like this has too much cost and slippage, not to mention the trades aren't profitable but assuming your research says they are then whatever indicators you're using are not robust. Neke, seriously, tell us what indicator's you're using. Not the whole system. I could go on and on about what works and doesn't work but I'm aware of what works and you aren't yet. Throwing money away like this is not going to solve anybody's problems, and, please, if you hit $120k just walk away, because you've drawn down at that point 80%, which means you don't know what you're doing, and at 60% that's also a stopping point for me. Don't say we didn't tell you this years ago when you were above $500k and knew you were gambling then like you're gambling now, and, now, you can't even afford to lose it! Seriously, I realize you like to brag about how it was $5k then $70k then $400k and I'm going for $4 million but you blew up and now you have to face that because there are professional traders with an eye for what works and what doesn't. Just by the results I can see it doesn't work, and I know it's because you still see it as a large enough profit that if I keep betting I might make it back to $450k and leave but that's a symptom of trading gambling addiction, neke. So listen, I've followed you since 2008 and all through the threads I saw you picking a basket of stocks with too large a watchlist, and I bet you're still doing it. Pick a correlated index like the NASDAQ 100 and day or swing trade, but quit with the watchlists over 500 symbols. Just because strategy desk can do that doesn't mean you should. Right now you've probably paid as much money as you have to your broker, and that's ridiculous. I hope you'll consider walking away at $120's, I also think you should see a trading psychotherapist to determine if this is an addiction or not, because all signs throughout these threads including all the messages you've ignored trying to get you to explain yourself are a symptom of denial and indicates addiction to trading gambling. Please see someone about your addiction, and know when to fold 'em.
....not that I would really know all about this, but bwow has great words that I really hope are thought about seriously. Thanks for posting
Neke has big balls to post his journal. He might consider trading a much smaller sizes and start selling options instead of buying them. Has anyone here ever met a trader who made money consistently by buying options ? If he wants to buy them he should do it systematically. Every month according to his indicators he could buy puts or calls on the major indexes. In my oppinion a systematic approach is better than a discretionary approach. Everyone makes mistakes, but there is a huge difference between being wrong and staying wrong. Good Luck.
Even a systematic approach is defined in part by discretion. The two do not exist completely independent of one another. They are linked by what we believe about the machinations of the market, and the psychological tendencies of the participants.
Neke, I think your account was around 650K at its peak. You also made some withdrawals but you should never of let your account drop below 400K. You should have defended your capital back in 2010. It is still not too late to start some serious defensive risk and money management now: Do your best to defend the 150K line in your equity.. cut back your risk now! This is the only way to last in this business, aggressively cutting back risk when things are going badly. So dont risk more than 0.5% of your account on each trade at this point, and reduce your risk even further to 0.25% if things continue downwards.