It appears that too many traders get caught up in the process of trading and quickly lose sight of the trading results. Anyone who tells you that trading is about anything other than the bottom line are merely trying to sell you the process. As we all know...there are many ways to skin a cat, there are many roads to the same destination, and there are numerous ways to extract profits from the markets. However when you place anything above extracting profits you are creating a very expensive hobby for yourself. So regardless if you use technical analysis, fundamental analysis, psychic powers, bollinger bands, fibs, & etc.; the profit and loss statement is the ultimate judge of the effectiveness of your chosen process. It seems very basic but I've seen time after time numerous traders trade for ego, glory, excitement, etc with profits not even being in the top 5 reasons why they even trade. It appears that young Neke would fit into that category as well. There are hundreds of ways to skin a cat...just make sure to choose a method that actually skins the damn cat.
I'm afraid Neke its time for you to hang it up. You do realize that you need a 50%+ gain from here on out to break even don't you? Any hedge fund that gets down to those levels usually closes shop. Do yourself a favor man, recognize that you are in this because of a bad gambling habit. that you can't get away from. Whatever system you are using, is not working. You are better off taking what you have left and go out enjoying life, get a job. Blowing $400K will be devastating to your mental well being. Trying to impress people has backfired on you - never trade to impress others. You put yourself out there and seriously, you shouldn't have - there was no need. You goals are ridiculous as well to turn 900% profit in a year. I want you to win but win in life my friend. Short term trading is not something that can be sustained over time. You have to know when to get out when you are ahead as well as when you are underwater. You've already broken your business plan so I am puzzled why you continue to trade.
unless you are a turbo scalper or arbitrageur you going to have mutli month draw downs in this business and if you risk 2 or more percent of your account on each trade you are going to have draw downs in the region of 50%. on the other side recovery time can be quick too, sometimes you can make 100% in a couple of months when the market matches your style and you are betting 2%+ per trade.
Weekly Update for week 25/50 ended 07/03/2010 Moderately positive week, up 6K. Nothing significant, except decent opportunities I missed entries by a dime. My automated methods continue to disappoint, which is a bit irritating. Code: Opening Balance: 250,721 Net gain for the week 6,444 ------------------------------------------------ Net Balance: 257,165 Number of Trades 26 Number of Profitable Trades 11 Since Inception of Thread 01/10/2010 - 07/03/2010 Opening Balance: 410,000 Net loss(Less Margin Interest) 152,835 (Down 37%) ------------------------------------------------ Net Balance 257,165 Number of Trades 821 Number of Profitable Trades 429 BREAK-DOWN BY AUTOMATED/DISCRETIONARY Number P/L Best Gainer Worst Loser AUTO 14 -6,954.10 1,881.80 -1,627.60 DISCR 12 13,503.90 7,261.90 -4,772.20
At this mid-point stage for the year, it is worth taking a look at the performance both for the short-term, and over a longer period. This year, I set out to minimise risk by lowering position sizes, and accelerating based on growth in account buffer. Needless to say that has not happened, since I have been underwater since week one of this year. On the other hand I have not cured the tendency to average in. The result has been having outsized position sizes when I am losing. Going forward, I am working on taking on bigger sizes upfront, leaving no room for averaging down. With that at least my profitable trades would also be on big size. It is a sorry sight to see biggest loser this year is -102K (BIDU option of Jan), while my biggest gainer is only 11K on the discretionary trades. Just wanting to see how I stand on the longer term perspective. Below are charts of cummulative P/L. Chart (A) is normal chart for this year's thread showing adjusted balance. Chart (B) is the cummulative P/L since start of trading in Dec 1999 (not 2000, just P/L, not balance). The portion shown is from Nov 2004 when I bottomed with a cumulative loss of -54K and account balance of 5K till date. Chart (C) is the cummulative from start of first thread (Feb 2007), with starting balance of 76K and P/L initialized at 0. Charts B and C cover every trading day, including the few weeks each year between the end of the prior thread to the start of the new one, and is based on daily P/L (not end-of-week data). Although the current drawdown is prolonged, I can take solace in the fact the cumulative P/L graph isnt so bad. Yes I know the balance on the account is now reduced (after the cumulative withdrawals) and would take quite some time to go to a new high. As for suggestions that I permanently cease trading based on a 50% draw-down, I think that would have taken place already several times in my trading life (the first one would have been 2 weeks from start of trading!).
you turned 5k starting balance in 2004 to a gain of 800,000 thats pretty fking impressive.. thats a return of 16000% over 6 years. That is better than any strategy I have come across over this time period. And the graph looks fantastic with minor setbacks, no major drawdowns and a very good up trend. Congratulations my friend!! Also forgot to mention neke... dont take too much advise from folks here... whatever you are doing is working really good.. as i said if anyone can show me a better performance, i would be really freaking surprised
Neke, when you started the year you were looking at doing more swing trades. I thought that was a really good idea, allowing you to average in (if necessary) over time based on an expected RTM move. I recommended SHLD options as a good swing trade idea in January and it went from a high of $106 the next trading day straight down to the $88's over the following 2 1/2 weeks. I'm wondering why you haven't done any swing trades, considering buying options defines your absolute risk. I'm glad to see you posted your cumulative results because it's annoying to see all the posters on your thread who are certain that you are on the road to ruin when in fact you have done very well when the entire picture is in view. We started out over 20 years ago with nothing but $5K to put down on a house and eventually leveraged the growing equity in the house to finance a business, purchase an office building, and do some buy and hold investing in high dividend stocks. Our overall equity curve from, say, 2007 with stocks and real estate hitting downright silly levels, through the present, would look somewhat dismal, but it's a far different picture when viewing our equity curve from our initial investment of $5K through the present.