Sounds like you only started following Neke this year. Go back and look at his journals for the last 4 years and you will see that he is up!1 He started with around 20k. Also you will see that he always has bad first half of the year and does well at the end. I think it might be related to him being busy at work the first half of the year and not as much time to focus on trading.
Ok, I looked back at some old Journals. What I noted was at one point his account had around 90k in it, but using margin I guess he took on 2 trades that had around 90k cost. This is a luxury that only someone who could afford to lose the whole account literally within days can take. I am reminded how Donald Trump built a financial empire twice, at one point the market turned on him and he was under water. Money often makes money, size helps, but even size can't protect you from unusual events unless you keep a good risk management system in place.
Good points man. However everyone's risk tolerance is different. It also depends on the % of your net worth you are trading with. Neke has full time job, so I think he is trading for wealth and not income. He stated when he started that we was ok with 40-50% drawdowns in order to reach his wealth target. I think if he was trading for 20% profit a year then he would adjust for only 5-10% drawdown. Not many people have the smooth maddoff equity curve... if they did they could just keep adding leverage and be the richest guy in the world within a year or two. Nine_Ender, thanks for bringing up some good points without out the crazy name calling you see on this site. Good to debate things and understand that everyone's beliefs and experiences are different and that makes each person unique and special.
Right there's what changed. Trading with the trend. The big money that moves the markets follows the trend. When a very strong stock gaps up on good news, you buy the first pullback. The previous high will be tested and if it breaks out, it's icing on the cake. Nice job, Neke.
I could say many of the points you listed, but I think the biggest one is the commitment to rein in my averaging down habit. That has accounted for far too much loss in my trading this year as well as previous years - for prior years those losses were masked by other nice opportunities that absorbed those losses, and still left much to spare. Six weeks ago, I did put in my automation to close excess position sizes immediately the size is exceeded, and proceeded to make that automation non-overrideable (previously I could remotely shut down my system to allow extra size to be taken). The result is that over the last six weeks I have seen the benefits: Now if I am in a losing trade I don't see it as the end-all. It could be a loss that day, but other opportunities could appear the following day(s) to make it up. When you average in to a point of despair (like the BIDU trade of week 1), it is hard to make up for it even if good trades show up, because you would not be trading at a size near what you lost. Did I not know this before? Sure one part of me (A) knew that and had been eager to stop the habit, it appears the battle was convincing the other part (B). A day like Tue when the market sold off could have been vastly worse if I had done what I would have done before: average in until the size is insane. Not only would I have lost big, but I might lack the courage to step in to subsequent good trades, thereby wasting the week as it were. So gradually (and with the help of the discipline being enforced by my automation), Both (A) and (B) are coming to terms with the new regime of discipline. Of course it is too early to say Eureka, but I believe the changes will pay off.
I just looked at these. 4 years, started at 91K in Jan 2007, and he is now at 330K, sounds not too bad, that is an annual return of 38%, which is good in these times. However, 38% annually, with drawdowns of 40-50% is not ideal! If he stops "averaging down" he should improve though. My preference in trading is low risk position trading with the primary trend, 1-3 month timeframe trades. Made 45% this year with a 12% max drawdown.
Well...the first point is this journal is not about you....don't give a figs a... what your 'preferences' are... The second pont is that Neke has addressed his 'achilles heel' related to averaging down and made the appropriate adjustments.....sincerely hope that Neke maintains that discipline. If Neke has the ability to recognise weaknesses in his trading and adjust accordingly he has a very good opportunity to succeed. NiN
stocks, but you're right it's not about me if Neke keeps off the averaging down he should recover nicely.