don't kid yourself, get real

Discussion in 'Psychology' started by chewbacca, Jul 22, 2006.

  1. I glanced at the dissillusioned thread, and no wonder so many traders are dissillusioned. I'm still dissillusioned 16 months into this. 8 weeks of consistent profitability has taught me that the most important thing in trading is to have realistic goals. When first starting out i wanted to make 200% unleveraged returns and 1000%+ leveraged and consistantly failed. Now I only go for about 1 point a day in the ES on average which is about 20% a year unleveraged and the only time i fail is when i get too freaking greedy , abandon system, and overtrade like this past friday. The biggest scam about the hedge fund business and all this talk of double digit returns is that there are almost all leveraged. The guy who made 40%+ (like VN), may have done it on 5* leverage with is like a less than 10% unleveraged return with shit like DDs and consistancy - but the guys a freaken multimillionaire. I don't know why all you guys here with tons of money and experience and consistant profitability aren't exploiting this hedge fund business to the max. All you have to do is beat the S&P index and inflation (which isn't asking for much) month after month and you'll be a multi.
  2. 90% of the professional money managers couldn't do that.. then how can the little old retail trader like me?
  3. Cheese


    For intraday trading the nub of it is simply playing the moves up and the moves down (eg YM).

    This requires an accurate methodology. Now I put what needs to be done very plainly and simply. This should not be misunderstood.

    An accurate methodology is not a plain and simple acquisition because if it were every dickhead noob that came along would become a multimillionaire.

    So OK first identify the obvious: what do you need to do? The gyrations are the obvious. Now you want to buy the upmoves and sell the downmoves. All Mickey Mouse simplicity .. so far.

    Bottom line: if you can only do this bluntly it is still what you should be doing or trying to do. After that the market (eg YM) is your cornucopia
  4. Your biggest advantage is your nimbleness...your ability to get in and out with viturally no slippage. The fact that you can easily switch up your positions is a tremendous advantage, and often the key to turning around a very bad situation. IMO, using leverage, and managing the risk is what us traders can use to outperform.

    Chewy...we all have bad days. Chaulk it up as a learning lesson, and remember, you traded well for 8 weeks before that. Focus on that rather than the losses. Remember, as you start to achieve your goals, you have to set new goals, always seek to educate yourself, and always seek to take your trading to the next level. Complacency can be just as bad as greed.
  5. Unfortunately, performance isn't everything. As a matter of fact, the more I read, it seems like performance is only a minor ingredient, if even that important. Contacts, marketing, salesmanship, and pedigree are the major ingredients. Check out Barton Briggs "Hedgehogging". He was at the top echelon at MS for 30 yrs and even he had to scrap for his AUM.

    I know someone who can put up 20-25% per year with high Sharpe and low correlation with S&P. Low leverage, not day trading and scalable. But no Wharton or Harvard MBA and no connections at Goldman. Where is he gonna go?
  6. rosy


    actually, performance is everything. if your friend really has those numbers he can get into a hedge fund.

    Barton Biggs was at ms as a strategist or economist giving advise and interviews; he had no track record.
  7. You get knocked for tell'in the newbies how it is when they're on their one-way trip off the side of the cliff, but on more than one occasion not-so-hidden in your writing has been the seeds of creating very successful methods (that's plural) for trading.


    Jimmy Jam

    P.S. ... and I for one think words are much kinder than the unforgiving, impersonal financial markets
  8. I wasn't just referencing Biggs to use him as an example of how difficult it is to raise funds. From reading "Hedgehogging" you don't see any small business owners or pharmacists getting the nod b/c of their performace. Every example of a HF manager in HHing was someone from GS or MS with major pedigrees who smoked cigars and drank brandy at some exclusive club in NYC, lived in Greenwich and rubbed shoulders with qualified investors at Breakers mtg in West Palm.

    So how does an outsider with good numbers get into a hedge fund?
  9. I always laugh when I hear someone who thinks he has good numbers and can't get money.

    Money has no class. He who can make the gold, is king.
  10. I really don't know if this is necessarily true, it's two different games being played -- those who trade for opm/with opm in mind, vs those who trade their own account. In ET people often assume that they are exactly the same. But certain time frames and edges exploited will only work on a small scale, which is fine in itself, but realize the limitations.

    I know it's scary, but some must face the fact that all they've learned and applied for making good profits over the years may be completely useless to anyone else outside of his own trading account -- relatively speaking.
    #10     Jul 23, 2006