N54 Fan, I hope the traders here will pay attention to what you posted above, myself included. Very good advice it seems. I keep my equity curve to tell me if I still have an edge (It must slope up) and give me my standard deviation about the mean. But there are other statistics I should be paying attention to, and you reminded me of that. Thanks. Oh, and Redneck, I like what you wrote as well. No matter how many time we are reminded, it doesn't hurt to hear it one more time.
In my defense, let me just say that I've never believed in statistics, backtesting etc in finding an edge in the markets, so I apply that to my own performance. Statistics are the equivalent of looking at a chart -- it tells you where something has been but gives little clue as to where something may be going. I don't care whether a market or stock or trade has only a 1% chance of doing this or that -- I'm more betting on everyone else believing that instead, and trading accordingly. For me, risk management has always been determined by amount of capital available (in my situation, beyond the token "initial deposit", this usually means profits MTD) and the risk parameters of the security and situation in question. That's all. To be fair, I do have a built-in loss "brake" via the firm I trade with. But I believe I don't really need to know exact figures beyond what's working well and what isn't, to keep moving towards the former and away from the latter. I've actually done about half a year's worth of detailed stats on Access, categorizing trades by methodology, industry, volatility, duration etc, and the numbers pretty much came out as I how I "remembered". But statistics are a poor indicator when it comes to learning new setups, of course when you start out the numbers will be ugly but if you continue to learn you will be already ahead of what past figures can tell you. I am well aware I have a risk tolerance far higher than most traders, and given my history, I can give back a majority of my gains at any given time. That's always been my weakness, yet I maintain my confidence because I know I can make it back. It's the only way you can make and give back a month's/year's worth of gains in the space of a day/week, dust yourself off, and keep plugging. I suppose my confidence comes mostly from the fact that if I really didn't know what I was doing, I would have been out of the game a while ago. I am comfortable risking everything -- well, because I already have. Ok with all that being said, I am taking your caveats to heart. I am sure if I did dig down deep and did the work to find exactly what my greatest strengths and weaknesses are, my numbers would be much more consistent, if not even nominally higher. But I admit I am lazy, and not a numbers guy. I fear I have ulterior motives for trading that unfortunately have nothing to do with the numbers, that apparently surface almost every session. I think the fear of pinpointing exactly what my strengths are stems from the fact that I don't believe any edge lasts forever, you've got to keep developing and adapting, statistics and pigeonholing be damned. Sorry if I'm rambling, I post this mostly to focus my thinking on the subject, and alot of times on ET I come to my own conclusions typing responses to my original question. I was also more curious as how others have dealt with the same situation as they grow as traders. You do have a valid point and it's up to me whether I can learn from it (unfortunately, it seems I usually never learn anything new unless I lose/pay for it first heh).
Illiquid How important are your rules â to you A month is a month ------------------------------------------------------------------------------------------------------ This reminds me of riding an amusement park ride⦠love the ups⦠hate the downs If youâre set on riding it â why not set aside some capital to pay for the ride, if you lose it, the ride is paid for and it ends (as it always does) Either thatâ¦, or modify your rules ===================================================================== We both know the current environment wonât lastâ¦, my crystal ball ainât near good enough to know when You should hope â you are not on a down when it does⦠else your ball needs to be better than mine From the heart â as always RN
Its generally considered a good thing when a trader's unphased by losses....sounds like u might be a bit reckless, tho...two sides to that fear and greed coin....drawdown is critical, imo....any more than 25 percent and i stop and reevaluate...your money management sounds decent....big funds usually trade conservative until their monthly target is hit and size up beyond that....sounds like youre doing that subconsciously...