Hi Electric, OK, so your cash stash in your main account provides your backup liquidity. And that's earning 2.3%...unleveraged by necessity. But I'm still unclear about how you know (or estimate) just how much your three pairs, traded together, can draw down. That will drive your Sharpe ratio, which both in theory and practice, will be important in a couple of years in trying to attract money. Where does 17.1% come from? Did I miss something? Was it in the 'scale trading' approach? I'm assuming that's the drawdown you've seen to date, in five weeks? As currencies tend to move in large swings (trends), this may not be representative, or a good 'risk of ruin' basis. Yes, I'm aware that your hypothesis is that you can capture more in the short term than you'll be drawing down in the long term, but it would really pay to know what that could, in a worst case scenario, be. Any investor might tolerate a 17% drawdown, but at 25% or 30%, you'll probably see wholesale liquidation. So you will be taking losses to cover positions and redeem investments. Clearly, this you don't want. Typically, you'd take this max drawdown into consideration when figuring the proper amount of leverage to strike a balance between drawdown, profitability, and likelihood of blowing out. These are probably some important numbers to collect and monitor. Serious money comes typically with a three year track record. Your careful recordkeeping as well as your OandA statements should go a long way as that time comes. I apologize for jumping around a bit here, but I'm responding to a number of differnet posts of yours.... I'd encourage you to continue your work and recordkeeping. Don't expect outside money so soon. Also, don't be disappointed that hundreds of traders don't get this or follow this. I've seen it numerous times. Give everyone the exact same system, and 1 out of 10 will replicate your results. Sure, the Turtles did it, but they were forced to be very disciplined because they were also given the money to trade. Besides, many lurkers are reading and benefitting from your ideas. Finally, here's an idea for consideration: ideally, you will have positions on 100% of the time to earn an average of say 3% unleveraged. At 50:1, that's going to yield 150% on your initial investment each year. Now dial it down to accomodate some risk, and you get your 25% return, or so. We all know that leverage cuts both ways. A 3% loss can make your year flat. More can wipe you out. Being in the market, in theory, 100% of the time for a year, to earn 3% seems to expose you to a lot of other risks. Yes, you are diversifying among several pairs, but I still think there's risk, though not as much. Can you devise a way to make that 3% in a directional move in, say a week's time, then take the rest of the year off? That has a certain ring to it, wouldn't you say?
Thanks DaveN, I need a chart that combines these three instruments into one line. That would be so kewl. 17.1% is the highest unrealized DD this Cash & Carry portfolio has seen in the last 41 days and that was when I had a cash to trading ratio of under 1:1. Things have changed considerably. Check the NAV tab. When I was researching the "Scale Trading Volatility Grabber" that was another system. I no longer am researching and discussing the "Volatility Grabber" publically. Lets keep that for another Journal I have set the increments to allow me to add "average down" positions for a long time. But with all the recent changes I do not know how many. It is more increments now than 41 days ago, which is a good thing. Thanks for the encouragement DaveN. I will continue here as it establishes my track record. I can wait three years as I have the rest of my life. I think it would be kewl to get a 12:1 cash to trading ratio, but I don't know what that would yield as everything has its price. The occasional trading really helps this system too. DaveN, you are actually quite scientific and I find myself at a disadvantage....really. I go by "feel" on a lot of this and you are an experienced trader identifying the items I must fine tune. Please check in from time to time and give me advice that I badly need. I need to be around traders and I have gained so much from this Journal. Tell Magna not to be so mad at me...I do not mean anything with my rants. I just have never walked away from a fight, which is keeping me from being a moderator. I know many lurkers are reading and I hope I have helped them. I have a few PM's and public posts that have confirmed that all this is worth it. I can say I look forward to posting in this Journal...can't you tell? I do not need any acceptance or feedback, as I know I have helped some and am helping myself by archiving my thoughts and trades. I have gone back and re-read some of my stuff and I understand every bit of it. I am trying to think clearly and logically and stay in a straight line. I will work on the 150%. I want to at least to achieve a maxrisk of 25% (highest is 17.1%) and a yield of 100% or something like that which represents 1:4 risk to profit ratio...I think I should put a mental stop loss in at 30% instead of trading to blow up. This way the longer I survive the more of a chance I can walk away netting something for myself and the investors if that day ever arrives. I am a terrible salesman, and I will need a firm to help me. If someone asks me about all this stuff DaveN, I give them the most negative possibliities as I do not like the pressure. My track record will just need to speak for itself. Many good things are happening I feel it, I know it, I breathe it.... I know I should not get religious in these forums, But I thank the Lord Jesus Christ for this opportunity. Michael B.
I need a "more accurate" way of reporting projected yield. I do not like the formula that I am using because at the beginning of the 365 days, it is not as accurate and misleading. Michael B.
I do not mean to get off topic, but do you know that you could trade this system with high dividend yielding stocks (someone mentioned that earlier). Here is some tools: www.dividenddetective.com and... www.buyandhold.com At that broker buy and hold, you must search the page meticulously, but you will find a plan for unlimited trades at $14.95 per month. This is window trading 3 times a day and there is absolutely no precision. BUT....I believe you can make money if you pick your stocks in diversified industries (they have over 3000 window stocks over at Buy and Hold last year when I checked). You can buy 50 different symbols or more (it is unlimited) in $20.00 increments (fractional shares) and you just hold em' and average down at $20 bucks a pop....Trade em' when the price gives you higher then the dividend you yield...re-enter em' after you take the profit...there are always quality new ones in the lists, in that link above...Just check your screen three times a day 1/2 hr. before the next scheduled window Good Trading to All of You Michael B. P.S. I do not trade equities as I am having so much fun with leveraged currencies. For anybody not trading and reading this thread, don't despair if you do not understand, there are hundreds of ways to take money out of the market...FIND YOURS. Now go tell one friend about ET and tell them to subscribe!
I have to switch into "Trading Mode" yet again. The Trading tab shows the largest losing position as a EUR/HUF at -5.63. It is not effective to take out winners to cancel that trade, as it is a waste of spread. So..... I go to the positions tab and wait for $5.00 to bubble to the top...take it out ....re-enter in the scaling pyramid technique discussed...wait again...and see what the market gives... Got it? Get it? Good! Michael B. P.S. I am keeping the exposure light (got it down to base 10.4, cause baby when this comes down it really is going to hit this system HARD!
So base 10.4 is 10,400 units of AUD/JPY in the spreadsheet and the other two pairs will follow with new size...also there was a new 1Y high in the AUD/JPY widening the increment... Wifey
You see...scaling in on a new 1y high can be tricky...commentary to follow...I got 8k units in...but I am split now...I can take out that profit ... This is what I am in the middle of... I can set the remaining limit orders (2.4k units) at low prices...and wait for the new high and take out what got and start over..or the low limits will hit, either way I win. I captured a screenshot that I will share shortly... You will see the little yellow triangles like a tail marking the limit orders I have in...I move this tail up if needed...but if I mst move it too much, I am faced with taking profit early and starting over...this is tough to splain' I gotta go and watch how the candlestick is pumping....very important..there are patterns there...every second counts and its important to see where it is sticky...
update... I went the early profit way...and re-entered...THEN I had to attend to GBP/CHF at the same instance...two scales on at once...!!! No problem this old man (46 years old) can still beat you kids under the table with EXPERIENCE..I captured another screenshot ...answered an email...and managed to post here!