my 1st protege

Discussion in 'Journals' started by dumb_mother, Sep 7, 2011.

  1. 29-Sep

    82

    $398.44

    still not making enough on the winning days- gonna have to get on him about not getting involved in more positions. he only did 1 position today whereas i did about 12.
     
    #21     Sep 29, 2011
  2. 30-Sep 97 $1,257.81

    $535.69 net transaction costs on the month- not terrible for a first month (i mean it was green) but not enough to cover x-trader or salary... so hopefully we can get a little more aggressive going forwards. i keep telling him he needs to click first and think later to get more aggressive about putting positions on because he asks me about 4-5 positions daily, and usually i'm in the process of putting them on when he asks so i can't respond immediately, (so if he just put them on and then asked he'd be doing fine) but he keeps waiting til i give him the green light and misses too many things in doing so.

    i always say i'd rather put a bad initial position than wait for the perfect level because i can usually work my way out of a bad position profitably, whereas if i sit and watch waiting for the perfect level that never appears its impossible to make money. you have to put yourself into a position to get lucky and every once in a while you'll get lucky.

    going forwards i'm going to purely refer to p&l in terms of dvar, with a target goal of 2 dvar / month of profit net fees.
     
    #22     Sep 30, 2011
  3. well i didn't realize his seat lease didn't kick in right away, so his p&l last month was closer to 315$ instead of what i posted before, but that being said on to posting performance in pp's!

    date vol p&l in dvar
    10-3 124 0.25

    glad to see a +.25 or greater day here, hopefully these will start to become the "smaller" winners that he sees with a few higher every once in a while.
     
    #23     Oct 3, 2011
  4. drm7

    drm7

    How much capital is he starting out with?

    Forgive my ignorance, what is DVAR? A Value-at-Risk measure? How do you calculate it?
     
    #24     Oct 3, 2011
  5. dvar = daily value at risk, it's calculated by: p&l / stop loss

    with this trading style positions are all stopped out when the daily p&l loss limit is reached, whether by 1 terrible trade or 10 small losing positions that added up to the limit. if the positions were never good, we get flat before the close of the electronic market. no positions are ever held overnight.

    forgive me for not answering the 2nd question but i'm switching because i feel more comfortable not posting $'s in the journal since $ returns really aren't important % returns are significantly more important.

    he'll be trading with a dvar of about 5% each day, so if he can hit the target of 1.5-2 dvar / month that is 7.5-10% returns monthly. ideally we won't see any drawdowns in excess of 10 puke points (s/l), and even hitting the low end of 1.5 pp / month would return 240% / year while a 10 pukepoint drawdown would be about a 45% loss or almost 5:1 ratio. (in my career of 7+ years my largest 2 drawdowns were 8.8 pp may to june this year and 5.7 pp sep 08 to mar 09 with a career average return of 1.65 pp / month with a var of 8.07)

    during drawdowns resize -30% to risk at -6 dvar and a further -30% after an additional -6 dvar, on upswings resize every time a new high by a dvar from the most recent resize is hit. that way we are able to leverage our upside to the maximum while only slowly deleveraging during drawdowns so that we have an opportunity to dig our way out with as big of a shovel as we dug our hole until that hole is kneck deep if you will, then we switch shovels til it starts moving in our direction (has only happened to me once and that was in may-june of this year)

    i encourage everyone to think of their p&l in terms of dvar (or %) much more than raw numbers because it is scalable and can help people keep a cooler head when they begin to deal with larger numbers. i always thought of my p&l that way and applied sit&go poker bankroll theory to decide i was willing to risk 5% per pukepoint (which i understand is about double what conservative traders would recommend you put at risk, but then again i'm trading spreads rather than outrights so i feel i can bet a little more and i'm fine with going bust because i'm still young and can regrow an account).

    ok i think i'm beginning to ramble :)
     
    #25     Oct 3, 2011
  6. actually i don't think i answered that clearly:

    dvar = daily value at risk, or the point at which you'd throw in the towel on any given day and quit for the day.

    profit in dvar = profit/dvar to tell you what fraction of your dvar you made that day
     
    #26     Oct 4, 2011
  7. 4-Oct 61 0.08

    only 1 position today but i told him to be careful today and just watch mainly since it was the first time he's seen us break down through a level that has a lot of support. was bad advice as all you had to do to make money today was click- but a good learning experience nonetheless.
     
    #27     Oct 4, 2011
  8. 5-Oct 98 0.17, .5 dvar on the month so far

    the story of my guys life is not being aggressive enough. he did have a misclick that cost him about .1 though and had he not done that (but you gotta learn that somehow i mean this is really still just starting off for him and on xtrader w/point and click trading shit happens) he would have hit the lower end of our target zone of .25 dvar on winning days.
     
    #28     Oct 5, 2011
  9. You may or may not be a dumb mother (no way for me to know) but nothing about this decision is foolish. Nice thread.

     
    #29     Oct 5, 2011
  10. Nice journal, was his dvar 5 % in september also?
     
    #30     Oct 7, 2011