Bounce off the equity lows thanks to my MES trade which exited a couple of days ago at the swing high. Got in some stock trades with smaller size today...should have reduced size sooner when things were clearly not working out.
9 MES is an unusual position for you to be in based on your NLV of the account. Was that an averaging technique? Otherwise, a single ES contract would have been more efficient of a position.
You seem to have a good framework and it’s always interesting to see people build out their own infrastructure. The thing that stands out to me though is that you’re playing really hard games trying to grind out some outperformance in ES and such. I am sure there are some faint edges there with liquidity provision and such, but any true edge is going to get arbed away before you can ever get to it by firms with better infrastructure, speed, and with huge inventory to spread against. Ditto with discretionary stock trading. More edge there imo, but it’s forever difficult to know if you are just collecting beta, and discipline/psychology is forever varying so we probably go through periods of negative edge without knowing. I used to do some discretionary d1 trading and I still do but my frequency is way down. Applying systems to markets with difficulties like liquidity constraints or information barriers might yield better results. @ValeryN seems to have been quite successful at this. You seem intelligent but maybe pointed a little in the wrong direction. Providing software/consulting to clients is probably way better alpha than these current trading systems. We want to get big returns on personal time/effort because it’s so finite. 2020 and 2021 are years where if you didn’t double a sub $1mm account doing manual trading, it should probably take a back seat to other endeavors. Anyway this isn’t a criticism at all but just my $0.02 of some constructive feedback for whatever it’s worth to you.
Appreciate the comments! It is all a work in progress and you might be right on some points. I have a day job in corporate IT which pays really well and I am completely phasing out consulting services for algo development. If I ever do consulting again it will be at the enterprise level where the clients have large budgets. I enjoy trading and am beating buy and hold....as long as those two continue being the case I will keep at it.
Good to hear! I do think honest intellectual engagement in things we enjoy often seems to pay dividends in unexpected ways. Like if you do eventually position into getting bigger clients, having first-hand knowledge of markets from trading as well as expertise with the software development could be really beneficial. You seem to have a pretty methodical and intelligent approach to trading. Paired with some niche market that the best and brightest aren’t as interested in I think you could do really well. If you isolate the PnL source and try to find cheap hedges to cancel out the variance, like the basic long over-performer / short index mentioned earlier, then you won’t be at the mercy of the broad market and you can start to really lever up. That’s how manual trading can make really explosive returns until you butt into the capacity constraint of a particular trade.