Not sure if there's any use other than to reinforce what Douglas teaches, that is the concept of taking every trade and not worrying about the random outcome of any one trade. I agree that the graph might look different if he used negative figures, but I guess what I'm puzzled by is this: even with absolute values, why should there be a steady exponential growth rate to the curve? why doesn't it zig zag up and down or return to 0 like a random process would at some point? To quote the author: "Despite the element of chance and the resulting large fluctuations in value that characterize a random Fibonacci sequence, the absolute values of the numbers, on average, increase at a well-defined exponential rate..... It's not obvious that this should happen, Viswanath observes. Random Fibonacci sequences might have leveled off to a constant absolute value because of the subtractions, for example, but they actually escalate exponentially."
C'mon Cash, who are you trying to fool here? Yourself perhaps? You are asking this question about "others" consistency so that you, yourself, can figure out how to get consistent. You didnt make this poll for your own health; you are trying to improve your trading results. This is a good thing of course. Unfortunately for you, you have a tendancy to ask the same questions over and over and dont seem to heed any of the good advice. My personal opinion.....you are searching for someone to AGREE that you are doing the right things and to keep at it no matter how long it takes. Sometimes you have to just say "f*ck it, this isnt working" and try some new things (on a small scale of course). All this is for your own good you know. Dont fight it. If you want to improve, you have to self evaluate and be flexible. It doesnt hurt to take the advice of better traders. God knows, I did when I was in your position and it helped quite a bit.
How many weeks...months..or dollars should be lost till its time to say "fu*k it". Where do you draw the line between something that might work, or just throwing in the towel and giving up? cm69
You should thoroughly back-test your strategy, ensuring you have enough trades in your sample to be statistically significant. You should ensure your theoretical equity curve shows fairly consistent profitability over most every time period without any massive drawdowns. The equity curve should especially show good profitability on its right-hand side, showing that it made a great deal of money very recently. You should then do a Monte Carlo or similar simulation to obtain a drawdown figure that is unlikely to occur. How unlikely depends on your risk tolerance for an account blowout versus your thirst for profits. You then put on one position for every "equity required per position" + "maximum acceptable drawdown before system meltdown". -Raystonn
As for when you should draw a line . . . I'd be a hypocrite to say anything other than that you should keep at it as long as you have the "heart" -- and capital -- for it. But otherwise, if you can't figure out why you are losing money, you won't be able to figure out how to make money -- the two are one and the same problem. If you keep making the same mistakes week after week without learning anything from the tuition you're paying, then you are just running in place. No one is going to tell you that you are not cut out for this game, the market and your broker will just keep taking your money for as long as you can reload. Not only do you have to make progress, you have to have the ability to realize if and when you are making progress, outside of what your P/L is showing (which can be quite deceiving in that department). A self-proclaimed "amateur" in any field, although able to appreciate the work of masters, knows his own limitations, and works in that space inbetween. But first you must have some idea about what makes the "best" who they are. Does this make any sense?
Speed? How would you go about quantifying that??? Unless you have a defined edge, speed will only mean that you lose more quickly. What I am talking about is maybe looking for patterns or occurrences that repeat over and over. Something like - If A, B, and C happen then there is a better than 50% chance that D happens too. You mention "opportunity" - that should be your edge. As others have asked, have you backtested that set of conditions - the "opportunity?" Sounds like in realtime it may not be working. You may just be buying and selling random numbers, albeit quickly. It's all about the edge. If you don't have that, you don't have anything...
Monte Carlo... if you tested on thus, you'd believe the market was random wouldn't you? What if you don't, and what if you use something like Elliott Wave or Gann? Are you saying that only successful traders are those that can code and make decisions when this indicator says this, this and that? If you're not into mechanical systems, what if you prefer to read the tape or use a system like one I mentioned -- what's a good way to then test, and what is enough? It's not really about testing then is it, it's about practice and 'learning' the market -- not learning how to code and let a program give you results based on what happened in history.