Great video. Here is another one I found: <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/GKhCzubxOW0&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/GKhCzubxOW0&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>
You only have to get rich ONCE? What is the cut-off? I guess once there, you pack it all into cash and never risk a dime?
I think that is something we have to determine ourselves. I believe you should still trade and see how far this road could lead you, but you may also want to rethink about your risk management plan. To me, trading doesn't necessary mean risking your capital. It is only risking after you put on a trade. It only took one emotional error to wipe out LTCM. PA
That Warren Buffet line was amazing... Sacrificing a lot of what you need for what you don't "need".. Neke.. imagine an equity chart with steady nice rises interrupted by periodic nasty waterfalls.... Now imagine eliminating the waterfalls... There has to be a broker out there with daily risk management you can set and change only with a phone call and only once a day... I say this because you WILL override even your automatic system in the "MoM" ... Moment of Madness.
"Saw the follow-up rally on BIDU on Thursday, and thought it was overdone at 449. Forgot all the harm I have suffered in BIDU on previous occasions, and that this was just a day to expiration. Bought 50 JAN 450 PUTS @ 6.50, as well as shorting 500 shares. Then came another surge and I added another 60 contracts @ 5.80, and extra 500 in shares. Watched all morning for exit point, but instead came another surge by noon, and in vengeance bought 200 contracts @ 4.00. That was the last act of desperation. Watched as the stock climbed and did not look back, while the premiums kept eroding. Finally closed all 310 contracts at prices from 1.80 down to 1.30 as the bids kept disappearing when I put in my limit order to get out. Lost 102K in stock and 14K in options." Numbers do not add up. You mean" lost 102K in options and 14K in stock"? Am I the only one who does not think Neke actually made too much mistake? NEKE's all trading system is based on "mean reversion", so if he sticks to his method, he had to short (or put) BIDU. NEKE used a lot of average down method in the past, and that's how he has grown his capital in the past. Why last year he made $72K in a week he was a hero, and now he lost $100K he became not disciplined? He is actually very disciplined. He had no fear to use the method that has been proven working in the past few years for him. Yes, you can say he should cut loss quicker, but what if BIDU suddenly changed direction right after he cut loss? Believe me, this happens to us often. Yes, you can say he should not have that much risk exposure, but you have to realize he is aiming from 410K to 4 million in a year. In order to get that much gain, he has to have that much risk exposure. Sorry, risk and reward are always tied up together. If NEKE is only willing to have 3% drawdown each time, trust me, he could only grow his account from $100K to maybe $150K in two years. NEKE is NEKE only because he is willing to take huge risks that many of you can not take. I can't say whether NEKE's method will work for the long run. I have a hunch it will. At least his number for now is far better than most traders I know. freewilly
This is an example why many aspiring traders fail -- they just don't know how to learn how to learn, if you get my meaning. Maybe call it metatrading. They just see the numbers and results, and don't care exactly how one gets there. They cannot distinguish between leverage and edge. They cannot project into the future just how damaging being "apparently" successful at trading can be, after you quit the day job and get all nice and comfy in your trading chair. They don't see how and why trading one's own account to put food on the table has nothing to do with percentage returns, managing opm, or setting some insane target to impress others. There are so many red herrings in this game, so many dead ends that can take years out of your life before you realize them as such -- that is why I can't see this thread as just entertainment. At least, I can't if I'm going to take the rest of you out there seriously as well. Otherwise, it's all a pretty sick joke.
Trading can't be taught, it can only be experienced. Your experienced you just had will make you one heck of a trader going forward if you learn from it. The last couple of years you have already did what 95% of traders can't do, which is to grow an account year over year. Most all great traders go bust a couple of times or have big draw downs before they move on to new equity highs. Get the risk management under control and you will have another great year!
Neke, Great trade record so far, and congrats for the success to date. Have ever considered doing some income generation plays, e.g. covered calls, vertical credit spreads, and so on? Your record and trading account is probably envied by most people here including myself, but i can't help but wonder if part of your account can be put to more stable gains. Perhaps you already have separate account/s that already do so. If so, pls ignore this. In the last few months of 2009, the indexes were basically going sideways, and it was a fantastic time for option sellers and those doing vertical credit spreads. Certainly 2010 will have its ups and downs, i'm just wondering if might be considering to add some option selling to your trading. Think SPX, RUT, NDX. Thanks for reading, and i wish you continued success.
I've been following this development with some interest. It's without say that if BIDU had reacted differently after the large gap up we would all be chearing had he made a 100k profit. It's ultimately not about us however, but about the risks that his style of trading burden him with. It's this burden of risk that will take him out of the game eventually, without doubt. Neke does not have a way to determine when he's wrong. Atleast not while the events are unfolding. He can only know that he was wrong in hindsight, when he looks at his P/L statement once he's been forced out of a trade. His style of trading includes doubling or tripling down using leverage on a position that's going against him. The consequence is that the real risks with which this trading style was burdening him were hidden from him. The way this usually works is as follows: 1. The market goes against neke 2. neke doubles down using leverage, decreasing his cost basis. 3. the market reverses and neke is able to sell or cover above his cost basis. His P/L statement shows a nice profit, masking the true cost of the risk he was taking by holding on the wrong side of the market. 4. With his P/L statement showing a profit neke is incentivized to continue trading this way. The way this sometimes works is as follows: 1. The market goes against neke 2. neke doubles down using leverage, decreasing his cost basis. 3. The market continues until neke is forced out. His P/L statement is telling him that he lost all of last years profits in a short period of time. 4. neke takes a break from trading. 5. neke feels empowered and decides to trade again. 6. steps 1 to 3 repeat and neke is forced out of the game.