You are welcome, i hope you enjoy watching my roller coaster ride. My advice to newbies is to stay away from trading, especially day trading. I would not advise my kids to enter this line of work. Trading is really brutal and it is extremely hard to continually turn a profit in the long run. Of course, it looks really easy.. and at times it is. Most people dont last very long in this business. And very few, probably less than 1%, can make a living at it.
Duely noted... I'm 19 and learning day trading and would suggest it to my peers who want the freedom of being ones own boss. The way I figure it is, starting young is your best bet, being most teens having nothing to lose.
Week 8 ====== £3183 loss Closing Balance: £45410 Peak equity this year: £56991 Current draw down: 20% Another brutal week takes this draw down to 20% from peak. It would have felt better if this if this drawdown had come from a higher equity (like 75k), but as traders we dont get to chose when the drawdowns come, or how long the recovery time will be. Weekly P/L so far for 2012: Week1: £2,893 Week2: £2,421 Week3: £265 Week4: -£1,129 Week5: £6,652 Week6: -£4,101 Week7: -£3,408 Week8: -£3,183
This is an excellent thread. You are very right to expect a DD of around 30% with your position sizing of 1.5%+. What is the maximum number of trades that you can have open at any one time? With my intraday trading, I size at 0.5% but have an opportunity factor of around 3 trades per day. The way I size things, any more trades will usually take me beyond my 4:1 intraday margin.
Your results look identical to mine, but compressed in time. Can you offer any insight to why this occurs? You appear methodical in your apporach and have a 'system' you follow correct? If our system is objective, and it doesn't get us anywhere, why not try subjective. Let me guess, you sometimes win big but you lose small many times more often? Or do you do 1-1 RW and basically end up with a random distribution of wins and loses over time?
Drawdowns are an expected part of speculative trading. We cant assume the method isn't getting us anywhere just because we are having a losing streak which wipes out recent profits. This current draw down is within expected limits. If this or any future drawdown goes well over 30% then that is time to start thinking about why my method is not recovering There are still 10 months of the trading year left.. i only need 4 good months of trading and i will reach my profit objective for the year. January was a profitable month for me but February has been a losing month. 50/50 is not the expected ratio of good and bad months i expect in the long run. Because i am day trading I expect about three times as many profitable months as losing months over the long run. You just dont know which ones are going to be profitable and which ones not before hand.
Week 9 ====== £582 profit Closing Balance: £45992 Peak equity this year: £56991 Current draw down: 19% End of the weekly losing streak. Good riddance to February, it was a nasty little month. I did dip negative for the year at the start of the week and i could again if this current drawdown still has more downside. Weekly P/L so far for 2012: Week1: +£2,893 Week2: +£2,421 Week3: +£265 Week4: -£1,129 Week5: +£6,652 Week6: -£4,101 Week7: -£3,408 Week8: -£3,183 Week9: +£582