Survival characteristics of CTAs, traders, & hedge funds

Discussion in 'Professional Trading' started by JT47319, Jun 3, 2003.

  1. JT47319


    I was going to post this in Aaron's thread, but I thought this deserved its own thread and was applicable to all of us who are either starting out and trying to survive or veterans looking to refine their returns/technique.

    Here's an interesting article that I found concerning those CTAs that last the longest and the survival characteristics that they have in common. My reading observations:
    Anyways, good reading and if someone has anything more along these lines, please feel free to post. I already track Sharpe ratio and the obvious stats, but I'm definitely going to try and incorporate some of these findings into my recordkeeping to make sure that I both emulate and maintain good survival/MM techniques.
  2. trader99



    Thanks! Interesting stuff. I'll definitely look into it. And something to think about.

    I've always heard money management is the most important part of a trading system, strategy, or method you use. That's what separates the winners from the losers and the average winners from the super winners.

  3. if you read Vic Sperandeo's books, he says basically the same thing.

    He was ( and is ) a consistent survivor, and one of the best traders, but he fully admits he never won a trading contest in his life, and has been outperformed for short time periods by many people that eventually blew out.
  4. the "super winners" don't last. you have choose between getting rich quick and long term survival.
  5. I totally agree with you... slow and steady is the only sensible way to play this game...
  6. Small gains, smaller losses with a minimum 2-1 ratio. Even if you have a horrible winning % you can at least stay alive long enough to hone your abilities.
  7. Sticking with a well researched plan and following strict money management is what I hear is required to be successful.
  8. I have to agree with you that "sticking with a well researched plan" is key for trading success. But money management is 90% of the game. For instance, you can have a dismal accuracy rate of 33.4% and still make money (gross) if you stick with a minimum 2-1 ratio. Absolutely refusing to take profits/take a loss unless it hits either of those stops will keep the newbie in the game and help the pro`s get through tough times.

    Good luck and stress free trading to all!
  9. ...good post.
  10. thank you...learned that the hard way
    #10     Jun 3, 2003