if you wanna make 100% +, then you have to be ok with 25%+ drawdowns. Painful but if u don't like it, take up knitting. Neke, u r doing ok. Keep going, man!
Neke has said in the past that he reckons he could potentially take 400K to 4million in one year. So from that i infer his strategy is scalable to making at least a few million per year. Neke could be the worlds best trader, or at least make six/seven figures every year, if he aimed to make between 50% to 100% a year, instead of trying to do that every month. At the moment he is averaging 'just' 50K a year. He can do much better than that. Those on here who are approving of his trading style (constant big risks for big rewards) are really just encouraging a poorer long term trading style.
Southall, I feel so belittled by your rate of return I am forced to bring out the facts . From your calculation, if someone has 100K, made exactly 100K and pulled all that out each year, after 10 years he will be still at 100K balance, and you would say his compounded rate of return is 0%. Harsh! Form 2007 (start of journal) till end of last year, I started with 76K, made 751k, withdrew 624K, finishing with a balance of 203K. I have tabulated the annual performance and withdrawals below, and here are my calculations. Average annual rate = 88% (average of the return%) Compounded Annual Rate = 65% (factor in timing of cash movement - I assume they were withdrawn end of each year, rate should be higher if we assume middle of year) It's hard getting a fair compounded annual growth rate when the volatility in performance is high, and there are withdrawals. To me it is like solving for two variables - annual rate of return (x%), and retention rate (y%), such that at the end of the period, the total withdrawal comes to the amount withdrawn (624K), and the balance on account comes to the final balance of 203K. Using excel, I find that rate to be about 65% annual with about 20% retention. So I have actually been pulling out the bulk of my gains (apologies to guy990opl).Have I been taking out too much? Well I leave that to southall and guy990opl to find a compromise. Code: From To StartingBalance Net P&L Return% Net Cash Movement Closing Balance Feb 28 2007 Jan 12 2008 76,000 138,000 182 (111,000) 103,000 Jan 12 2008 Jan 11 2009 103,000 377,000 366 (160,000) 320,00 Jan 11 2009 Jan 10 2010 320,000 210,000 65 (120,000) 410,000 Jan 10 2010 Jan 9 2011 410,000 (44,000) (11) (30,000) 336,000 Jan 10 2011 Jan 17 2012 336,000 (121,271) (36) (11,000) 203,729 Jan 17 2012 Jan 6 2013 203,729 (61,573) (30) (59,000) 83,156 Jan 6 2013 Jan 4 2014 83,156 45,281 54 (27,400) 101,037 Jan 4 2014 Jan 3 2015 101,037 197,562 195 (42,500) 256,099 Jan 3 2015 Jan 1 2016 256,099 10,350 4 (63,000) 203,449
I certainly don't want to be critiquing another trader who I know nothing about, nor his method, but I do think this is accurate. If a given month can be up 100k or down 100k, then this could just as easily be up or down 500k or even 1mil. Very quickly looking over the trades for last month, there are big hits of -31k, -21k, -14k and hardly any wins that are in order of this same magnitude. It seems to be to be simple statistics that if the average loss is so much bigger than the average win, you need an incredibly high win rate because a few losses can wipe you out in no time. All of this just gets so much more dangerous if things are scaled up, so I do have to agree that for long term trading, this will be deadly.
I used 91K starting account (January 2007) and my own estimate of your profits (500/600K) and it came to cira 20%. Your CAGR return on your 2007 starting investment is about 25% when i use your correct profit figures (750k). ie. 91K starting capital compounding 25% p/a makes 750K profit after 10 years.
Again, it is wrong to calculate rate of return without factoring in timing of withdrawals. From your perspective, for the example I gave (making 100K each year and pulling all out with 100K), after ten years your rate would be 27%, after 20 years, it comes down to 17%. No, it is 100% per year all the way. You can't assume all money must be preserved to be relevant in determining compound rate of return. Besides 100K pulled out in year 1 does not equal the same amount pulled out in year 10
Sad to lose an admirer. When did that happen? Maybe I could post statistics from then to see if I can win you back
Don't worry about Neke's progress or trading. Worry about your own. If he needs help, he will let us know. You do you. Neke will do what he does. Okay?
2 stats without comment: 1. Neke's last 19 months performance is -20K. 2. He said the goal for 2016 was 100K, that was achieved last month by being up YTD 125K.