Hi guys how's it going! Here I am again. Many have already remembered me for my post the other day The blackest day in my career as a trader. If you have not read it, I recommend that you go and read it so that you understand even more the concept of this achievement that I have accomplished. https://www.elitetrader.com/et/threads/the-blackest-day-in-my-career-as-a-trader.360931/ When I had that tragic and brutal experience, I honestly did not want to know about trading anymore, but despite the fact that trading and the markets had given me the most terrifying and strongest lesson of all my life, I did not want to get away from that world, because Deep down I knew that I could fulfill my dream, deep down I knew that I could be a profitable trader and turn my passion into a business. After that tragic event, I took a few long months away from the world of trading but in the end, attracted by the passion I feel for this world, I came back again. But if I wanted to be successful, I knew that I couldn't go back to making the mistakes I made in the past. If he wanted to be successful, he knew he would have to do it in a different way and with a more practical approach. Most retail traders lose all their money by chasing absurdly high and elusive returns, they lose by not having the right balance between capital and risk management. Having little capital leads you to take much more risks than you should because you want to do more with little, and that's where I saw the problem. If he wanted to earn $ 3,000 a month with a capital of $ 10,000 then he had to earn a 30% monthly profitability. A very high profitability that is unsustainable over time. Whereas if you had a $ 100,000 account you would only have to look for 3% per month to generate those $ 3,000 per month. That totally changed my focus and helped me see how I had to run this business in order to make money from it. To top it off, through a friend, I got to know a trader who made a living from this business simply looking for a 15% annual return. The key to this trader is that he managed third-party money through a broker and took a 3 + 30, 3% fixed commission for administration and 30% of the profits generated, apart from that that trader had an agreement with him. broker which the broker gave him 35% of its commissions generated by its volume of operations. That trader earned about 150,000 dollars a year net and I don't even want to tell you about the capital he managed. That led me back to only one path. If he wanted to make a living from this business and be successful, he had to manage money from third parties. (And you already know how terrified I was of that after losing my parents' money). But hey here we go with the most interesting of this story: He started working on my trading strategies developing it from scratch. I learned that to survive in the markets your entire portfolio should not be managed by a single strategy. You should see several strategies totally uncorrelated to each other and in different time frames. I understood that and at once I realized that it would be impossible for me to carry out this manually, because I could not operate 4 strategies at the same time efficiently and because on top of that I did not have much time since I had a normal job in a bank from 8 to 8. 17 o'clock. So look to my best ally so far "Technology" for support. In mid-2017 I looked for 2 trusted programmers, one of them was from Argentina and the other from Barcelona, began a 24/7 job to develop those algorithms and optimize it in the best possible way, the strategies were well founded statistically so it was just create well optimized algorithms. It took me and my team 3 and a half months to create those algorithms and do hundreds of back tests to optimize them and once we finished then the toughest test remained, put them on the market in real time with real money to see how they were going. In October 2017, the real account algorithms began and the systems could not see a better start. In the last quarter of 2017, systematized strategies achieved an impressive 25.18% Seeing what my automated systems could do in the first trimester of life, expectations were high for the coming year. And the truth is that I do not disappoint. I had my best year in my career achieving a stratospheric 139.56% in 2018 Seeing these results, expectations were just as high for 2019 but the reality was different, I faced my toughest year so far, in that year there were a couple of conditions that were not favorable to my systems and in that year I could only get a 5.77% profitability. It was not a negative year, but it was not a very competitive profitability either, anyway, we closed 2019 in green numbers. The year 2019, although we closed it positive, gave us some quite interesting challenges, I discovered that I had to increase the adaptability of my algorithms when facing the market because the market is constantly changing and I could go from a year 2018 where the conditions were perfect for my system to a totally different market like the year 2019 where my algorithms suffered enough to close the year in positives. So we worked at that point to make more all-terrain algorithms and in 2020 the changes gave results, achieving a competitive 26.4% After seeing how well the year 2020 was and seeing how my systematized strategies took hold, a very interesting question came to the table, Was I ready for third-party capital management? It was obvious that the situation was not the same as 2016 where he practically did not know what he was doing but fear and terror were still there. A friend saw the results and said olle are you doing really well because we don't go out and look for great clients? I said hey man, I don't know! I still do not feel ready and in February 2021 boom my friend arrives with an investor who without much word said hey boy I want to open a brokerage account with $ 270,000 for you to manage. I don't have to tell you that I was totally paralyzed with surprise. But hey, opportunities like that don't come up every day, so I told him, sir, let's get started. 2021 is being a spectacular year, we have an impressive 35% until September 2021 and our forecast indicates that we will finish above 40% by the end of the year. My strategies are made up of a scalping trading on 5-minute charts, 2 swing trading strategies on 4-hour charts and a key level breakout strategy on one-day charts. Currently I continue to develop, and back testing other strategies to continue expanding my portfolio. They have made proposals to me to open a hedge fund, but I feel that I still lack experience. I have plans to think about that possibility in 2022 or beyond, but for now I am focused on continuing to develop profitable strategies to have a portfolio of more diversified systems, after all there is my success, in having several profitable strategies uncorrelated with each other . Guys, if you got this far reading, I want to tell you never to give up and fight for your dreams, that is, in an intelligent and practical way.
This is so inspiring I enjoyed reading it even more because i can relate it well and i guess every trader has been or will go through it at some point this journey and the most remarkable part is how you bounce back and keep your head straight and focused knowing One day all this hard work will pay out. THIS HITS HARD
Keep up those returns and performances, and post a picture of yourself sitting on a yacht or Ferrari, drinking champagne and cheesecake, in the future. With a beautiful woman next to you, and a parrot on your shoulder, and an expensive Swiss watch on your wrist. and a full head of hair with a hair transplant, and a mouth full of veneers, perfectly white teeth. The Good Life, the Way it Should be,
Congrats and thanks for sharing. So you no longer trade the correlation strategy (the one described in your blow up thread) at all?
I'm sure there is a unique, original, person somewhere on earth...who blends champagne with cheesecake, And drinks that mixture concoction,
Correlation strategy sucks. They don't work all the time and when they don't work, you lose big. I did it for VIX products last year and I lost big. UVXY still went up even when the market was going up. Was totally shitty!!
i am having a very similar experience never give up the thing is even when you have a strategy that strategy will not always give clear cut signals and sometimes the clear cut fail and sometimes the not clear ones succeed so you start second guessing your self. i started taking all signals-lose some win some- but do it with confidence and no doubt. that worked for me you have to accept stop outs unemotionally and not tweak the strategy. over optimisation never works
Its very important for traders to hear about failures, it humanizes everything. Too many guys talk about their winners and so called small losses. Ive taken some severe hits in my day and it was absolutely demoralizing. I also took some time off. 2 years to be exact. I just eliminated some bad habits and actually stuck to those rules. Is it fool proof? Of course not but i am much more profitable and avoid big losses.
i found that to work very well in my 14 years of day trading i took 3 big breaks lasting over 15 months. i did that in my 25 years of golfing often too .....finished up 4 handicap. it really helps clean out the bad habits that invariably creep in and cause havoc