The guys who make 20% a month, I wonder if they have volume limits? Plus, I wonder to do 20%, what percentage of risk of account? I have found hedging has helped me much more than going for largest profit. Percentage wise can't do better than buy and hold on the up side if during the year was continue rise, however on years where there are 10% or more drawdowns, I won't get this and come out ahead IF price returns to original highest high. But we all know some companies may not weather the storm and bankrupt which I end up with no additional gains. But given my drawdowns are much smaller, when lows settle down and make reversal signals, will lift hedges, so when price rises, I do better than many who do not hedge. But one of the best reasons I went this way, at older age, can't recover huge loses, and peace of mind. Am often asked if I could go back in time with knowledge I have, would I? No way, at some point I think many realize, we truly are all the same no matter of what we did with our lives in the past, whether being the best traders for a past year or fifty years, or giving away fortunes to charities, we all will be known by our families. It is funny, early in life we want to be the best we can be, and yet many alienate our families to play the game. I pray all keep well and have a quiet weekend.
I was off by 1%. He actually claimed 11% steady returns over the years: https://www.latimes.com/archives/la-xpm-2008-dec-13-fi-madoff13-story.html
Wowsa! i'm impressed. (big deal, lol i know, but that and 5$ will get you a cuppa joe) thanks for the answer on a silver platter. i owe you one. i'm thinking ol bern had some darwin award contestants in the flock. hell, he was big cheese at the nasdaq and all. i'm thinkin sstheo kickin bern's beehind, with his journal entries of his quest. " His returns were high (10 to 20% per annum) but consistent, and not outlandish. As the Wall Street Journal reported in a now-famous interview with Madoff, from 1992: "[Madoff] insists the returns were really nothing special, given that the Standard & Poor's 500-stock index generated an average annual return of 16.3% between November 1982 and November 1992. 'I would be surprised if anybody thought that matching the S&P over 10 years was anything outstanding,' he says." " so, what was madoff thinking? what would he do to repay the ponzi vig? just lay it off on his son? thanks pop, lol. seriously, how could he even make up a reasonable story of how to repay the loot? much less make it happen. " What tipped you off? Madoff’s name was never on the marketing materials; that was clue No. 1 – I’ve never seen a product offering where the manager’s name wasn’t listed up front. The marketing literature described a derivatives-based strategy with 37 moving parts, but I was very familiar with the math, and the strategy as described shouldn’t have been able to earn a positive return after fees. He made some very simple portfolio construction errors in that he foolishly retained single-stock price risk that would have led to a lot more down months than he reported to investors. " https://www.fraud-magazine.com/article.aspx?id=313 Jerry Pearce, one squared away individual. Has Tons of real life storys as command level law enforcement doing all manner of ass on the line biz.
His scheme lasted so long so there will be enough guys to use it as an inspiration. Living average all you live vs living it big for 20 years and then, maybe get a reduced white-collar crime sentence? Could be a no brainer choice for some.
Losses are cost of doing business. They can be very minimal though. Dig into Spydertrader’s threads in the archives to access a step on the path to your goal.
Quit whining, I don’t give ratsass about your trader friend, it’s you crying about not having enough capital and if you did have enough all your worries would be gone. STFU about it and focus on what you have. Nobody cares and nobody will give you squat.
Thanks for the reference. Skimmed through his 2 journals, there are 59+ pages in both, so don't blame me if I missed something. First of all - I have high respect for everyone who is trying so hard and being honest about their results. This is actually a great example of what really happens when a trader "makes 20% every month with almost no losing day". They do, till they don't. Not to generalize, but all examples I've seen (where there was enough info available) - it is nothing like that over a year period or even just 3 months. Most of the time the streak ends when market changes and they need to adapt, through this transition period there are losses, often way bigger than on "average plus day". Sometimes those losses lead to a complete halt of trading or paper trading for months to get back. Often positions sizes and risks taken are cut to a comfortable level and those returns will not be seen again. Here are couple of quotes from his journal explaining the length of time and consistency we're talking about: "Oct 10, 2019: 6 weeks in now. Major milestone" "In fact, I have been pretty quiet here because my live AMP futures micro account has gone basically nowhere for three weeks now. The glorious gains have been muted by many frustrating failures." About consistency and market changes - A friend of mine recently called and said - I would have made 10% return in one day if I would have bought TELUS (TU) at the open and sold at the close. He is pretty naive but I thought - let's entertain that idea. So you would have bought TU when? After it had a decline? How big was the decline? Would you be just trading TU every day? All US stocks? How many would you hold at the same time? How much money would you put in one if I tell you over a long enough period of time they can gap down 20-50%? When exactly would you buy? When what if it doesn't go up on the first day would you wait? So now he had a concept of what a simple system would consist of. Then, helped him to come up with some rules and wrote a backtest. I didn't need to run it too far back as I was certain few years of data will make a point. The result was - sometimes that system would actually make money, those periods can last 3 months, sometimes 6. But it would also stop working very often for months or even years. And if he would have run it long enough he would have lost all his money. Regarding absolute returns, don't be too easily impressed by high numbers. How much money you will make during that streak doesn't have anything to do with skill. How much money you make when your system is working is always proportional to a risk taken. Double your risk - double your return. That easy. Account size also matters. More than most people think. When someone has 2000$ - 200$ or 500$ loss might not sound that much because you can go mow a few lawns and it's like nothing even happened. Excercise for a few hours is good anyway right? For instance, in most cases when people double their account fast or something like that, there is a high % risk involved on a single bet. But think about it - that is 10-25% of your account risk! Try to replicate the same when you have 1mil. Didn't work out and you are out of 100-250k... How many lawns would that take to forget? PS. By no means, I am implying that "sstheo" will not be making money long term. Just not with the consistency like "every month 20%, with almost no losing days". Certainly not over a year, and most certainly not over a period of any few years. I've done a very similar experiment in 2014 and had my 60 days no losing days streak day trading equities. Not the same instrument but I can relate to dynamics of what is happening to him.