Doesn't sound like the best way to approach trading but if you're up 30% when you hit a bad trade, it's not the end of the world. No one gets every trade right. If you can net 30% every 6 months (hypothetical), musical chairs w/o a place to sit isn't so bad. Perhaps a little hand holding would help ease your mind. Take your inflatable doll out of the closet and hold hands during trading hours :eek:
I understand his dilemma. When I was paper trading the rudiments of my strategy I did not have a negative month. My best month was 22%. My worst month was 3%. Yet I was not confident because of the large variance. I felt I was winning more by accident then on purpose. It wasn't until I took a course, did some more math, some more paper trading that I felt confident that I understood my strategy and could do it on purpose rather than by accident.
Your statement (no ? mark) is rather inaccurate. In the quoted post, it was month on month returns as implied by my use of the word month in that post.
Month over month returns on spread requirement... not on portfolio; unless 100% of the portfolio is applied to the spread requirement.
On an account devoted exclusively to trading credit spreads and 10%-20% in cash the month on month quote is on account balance. What else did you have in mind? What do you mean by spread requirement. What do you mean by portfolio? All my accounts or just the account devoted to vertical spreads. I'm so confused by your questions on what I thought was a pretty simple concept.
Give it a rest. You're quoting WIN % as though you're risking 90% or more of the portfolio. Nobody would devote 90% of their account to one of these moronic spreads, but that's how you're reporting WINS, as though you're risking virtually all of a portfolio every month. Imagine you're HoCo hedge fund and you have a fund class devoted to vol-derivatives. You would never risk 90% of the account on a single vertical or condor, but you are reporting your % return as though you are. Obviously, this account is but a small portion of a portfolio. IOW, when HoCo has a win he calculates the return on his capital at risk and not on the entire portfolio. That's a joke. Here's another example. You're running a $10MM reg-T trust account for your family. You buy a call fly in XYZ for $10.00 that you cover a few weeks later for $12.00... the trade represents 5% of the trust's notional value. The return on AUM is 1%, not 20%, but that's the method you are using to report WIN%. Worse, you're diluting losses by reporting on some unknown (unknowable) capital base. We know this because your recent draw-down showed a loss of ~22%, but there is no way you lost only 22% on the spread requirement. You are reporting the loss on a much larger pool of capital for wins, and on the much small spread requirement on losses. That's fraudulent. You apply wins to a small amount of capital in an isolated account while reporting losses on some fictional portfolio. You're leveraging your wins and diluting your losses.
Worst of all... why the f*ck do you invade so many threads with your fraudulent performance stats? You can't limit your snake oil Ponzi to your own thread?
It is truly a shame that you stalk me from thread to thread and hijack the thread for you own purposes. However I calculate my return, the point of my post is that one of the reasons for the variance in my returns is that I did not have a good handle on why I was winning. I had to take action to gain that understanding and bring stability to my returns. It offers the OP one of perhaps many ideas of how he can gain confidence in what he wants to do.
Wait, are you admitting that you calculate your profit percentage on just the capital required to hold the vertical or iron condor, but calculating your loss percentage on some (much larger) total portfolio capital? For example: if you had $100,000 total investment capital in all your trading accounts and you end up in an iron condor (or a couple of them) with actual dollars at risk (and therefore your margin requirement) of $20,000, then you would calculate your posted percentage win off the $20k margin requirement, but your posted percentage loss off the 100k total portfolio?