Let's get real about returns

Discussion in 'Trading' started by AAAintheBeltway, Jul 25, 2003.

  1. Yeah. I just made a big post about that LOL.

    The secret is to find ways to decrease your risk while increasing your leverage antiproportionally.

    I.e. Everytime you find a way to reduce your real risk by 50%, you can increase your leverage by 100%.

    I think, as a basic figure to start with in this pursuit, we shouldn't exceed our exposure to more than 2% net risk.

    Some people don't seem to have a problem risking ie. 5% on a trade. To me, that's mind-boggling.


    Sincerely,
    ~Scientist
     
    #21     Jul 26, 2003
  2. AMEN.
     
    #22     Jul 26, 2003

  3. I second that...
     
    #23     Jul 26, 2003
  4. Thanks for your message Brother Scientist... my methodologies (when taken together) are robust through most market conditions, and my drawdowns are acceptable to me (you may yourself find my drawdowns acceptable if you saw the context in which they have occurred i.e. the longer term trend of my equity curve over the last few years)... volatile equity curve drawdowns are just part of my way of doing things; without them I doubt I would have gotten to where I am today... I always keep an eye on how my equity curve is going, and I recommend to all traders to integrate the technical behavior of their equity curve into their money management system...

    If I ever do decide to set up a hedge fund (which at the moment I doubt very much), I will disclose an audit of my historical trading, so that my clients can see all the details...


     
    #24     Jul 26, 2003
  5. Dear Brother Candletrader,

    There is a book by Daryl Guppy (my favourite Guppy book) called;
    "Better Trading - Money and Risk Management"

    It includes (as detailed on front cover):
    -Using Risk Management to improve returns
    -Protecting Capital and Profits
    -Better ways to add to winning Trades
    -Using Trend Risk to boost Profits

    And many more. But basically it's a book about risk management and it discusses equity curves and position risk/sizing etc in quite large detail. I loved this book from the day I bought it.

    I thought it might help, since it hasn't been published in the USA, so here's the link where you can buy it;
    http://www.guppytraders.com/gup64.htm


    All the Best in Your Endeavours, Brother Candletrader,

    Yours Sincerely,
    ~The Scientist
     
    #25     Jul 26, 2003
  6. Dearest Brother Scientist,

    Like you, I am an admirer of Brother Guppy... as you know, I own one of his other books Market Trading Tactics (middle column, 2nd book down):
    http://www.geocities.com/candletrader2003/afewofcandlesbooks

    Thank you for your recommendation, which I will endeavor to purchase...

    With the kind of love that can only be experienced by members of the Fraternity...
    As ever...
    Yours lovingly,
    Candle
     
    #26     Jul 26, 2003
  7. sempai

    sempai

    Sorry dude. I said I made over 5 pts a day on that one just because I was disgusted with all the BS on this board.

    I don't even daytrade the e-mini's anymore - just buy and hold.
     
    #27     Jul 26, 2003
  8. MR.NBBO

    MR.NBBO

    Why not simply state your average annual return or 1,2,& 3 yr returns and your corresponding beta - to account for the leverage....this would put everyone's risk adjusted returns on the same playing field. Then we could truly determine those positive alpha traders!


    20+% drawdown candletrader??!!!! UGHH, you have cahones of titanium mi amigo.....but hats off to you for the massive discipline this would obviously take.

    Had my worst drawdown to date about 3 weeks ago, 2.1% of the portfolio. Got hit with a bunch of busted trades.
     
    #28     Jul 26, 2003
  9. DT-waw

    DT-waw

    I guess it's 9th losing day in your 7 years trading career, am I right?
    http://www.elitetrader.com/vb/showthread.php?s=&postid=261456#post261456

    There're two possible explanations:

    1) There's sharp disparity between
    the best CTA's & hedge funds
    vs
    the best individual traders
    performance or big vs small players, if you like to call it like that.

    2) People who claim such superb performance are not telling the true.
     
    #29     Jul 26, 2003
  10. Actually the discipline is not massive... I have complete faith in my methodologies and in the long run trend of my equity curve... that confidence allows me to absorb drawdowns with the mentality that is akin to knowing that I will be just fine... the positive flipside to the drawdown volatility is of course the disproportionate upward thrusts on my equity curve...
     
    #30     Jul 26, 2003