Two Years of Trading Dangerously at 84% Annualized Returns

Discussion in 'Hook Up' started by InTheMaking, Jan 14, 2018.

  1. Dear Friend,
    I realize the posting would solicit a bit of snark especially with the chest beating. In the most sincerest way, it wasn't meant to show-off. It truly is meant to attract respect and dialogue with fellow traders of better calibre. As traders know, there is strategy, calculations on probabilities and bit of luck in all of this. Actually there is a lot of luck, in expecting your assessment of the trend continues.

    That is true! The bull-market did amplify my returns. As mentioned, my portfolio is 70% stock selection and 30% option trading. The 70% stocks benefited from the rising tide effect. The 30% option trading is contributed to a lot of the growth (leverage and theta decay income).

    2 years ago was my first time trading. Prior to the my investments was concentrated in real-estate, a sole proprietorship business and stock ownership of a fortune-1000. Yearly growth was 7% at best and ROE was never a focus. Today, everything is eyed in the viewpoint of investment. Hell, I've figured out a way to generate income out of my vehicles, an asset that bleeds theta decay like crazy.

    #41     Jan 21, 2018
  2. Personally I have no experience except equity trading at all.
    Forgive me for not having option trading.

    Two years of result may not be significant, too short, hopefully five or ten years for significant result.
    Wish you a continuous result as the last two years!

    Furthermore I hope ANNUALLY 12% outperform over the index(DOW).
    One typical example is shown at Buffet's
    which implies 12% outperform over index(SnP500) FOR 50 YEARS.
    Last edited: Jan 21, 2018
    #42     Jan 21, 2018
  3. There is investments and then there is trading. Two different things. Investment is picking undervalued equities and wait for the pop and ride profits. Slow and steady. Trading is a high pressure adrenaline rushed activity, meant for the very limited few. Its buying calls when expecting a pop on the upside, selling straddles when you think market is consolidating and buying puts when you think the market's gonne sink. And if you get the direction wrong, you better bankroll your losses. Not for the faint of heart.

    I probably will not trade this aggressively moving forward. Its definitely given me more gray hairs than I would care for. I know a number of other businesses that can do 80% ROI but with much less stress.

    #43     Jan 21, 2018
  4. Some objection! If you have 80% ROI (For example, one year of business makes 80K for every 100K), then stop trading in the market to go there NOW.

    Personal goal is 10~15% over the market (annually compounded)
    For example expecting <= 15K for every 100K in one year.
    More specifically 30~45% in EVERY THREE years for STABLE moving average.
    #44     Jan 21, 2018
  5. Pekelo


    I am only halfway through this thread but this is what I thought. He has been successful averaging down in a rallying market for the last 2 years. That is the right strategy for the right times, but won't last forever.

    I am not sure what his problem is, or what he is trying to achieve here. Strange that he doesn't know Martin Gale....
    #45     Jan 21, 2018
  6. I just wikipedia'ed Martingale. I don't know much about gambling, but I do know how to run a business and have done several businesses (since 11yrs old) that I have exited for profit. The "doubling down" concept to recover a loss is psychologically detrimental to the business operator and leads to more self-destructive addiction that could ruin his capital. Its antithetical to a diversification principle that a good business operator should seek towards.

    Diversification gets a bad rap, because in the trading circles, people think it leads to subpar performance. My strategy is identify several 120% to 150% ROI (high-capital) investment strategies and diversify across them. Today, I have 7 strategies across 30 underlyings. Some have done as well as expected and some sucked and needs to revisited and dropped.

    My best executions were on 2 underlyings (non-correlated with SPX/NDX/DJIA/RUT) that moved -1.6% and 2%. The strategies had a return of 220%. So I believe in a bear or neutral market, my approaches could be tuned for certain return high targets. But I do admit the bull market gives more predictability for price and volatility that can be take advantage of for us to be frequently lucky.

    But here in lies the dilemma for a new user (not a new trader) on *Elite* trader seeking collaboration or advise. I got ostracized a few months back for asking a question on managing theta/gamma and theta/vega ratios for being too dumb and overthinking. Now, that I publicly show my equity curve its dismissed as "managed luck" and being boastful. I understand the this behavior among traders because traders deal with money and any growth of equity comes with ego. Be it growing from 1m to 5m, 100k to 200k or even 10k to 20k. I get it!

    So my question is how does a person artfully position himself to attract collaboration of other traders on this forum without sounding like an idiot or a dick? Get their posting/like count up? Get a higher followers/following ratio up? See our obsession towards metrics, :)
    #46     Jan 21, 2018
  7. Pekelo


    I am not sure why you are talking about business when martingaling when it is more prevelent in trading. Also, the way you described your usage of futures is the definition of martingaling. You said you start small and go up to 20 contracts IF the market goes against you. That is averaging down, or martingaling.

    Second, it is simply impossible that your 30 different trading vehicles are all non-correlated. They are probably in 3-4 groups, but those groups correlated very much. So this might give you a false sense of diversification, when you are actually not.

    Our dilemma is, that you are doing exceptionally well, so what can we add to your trading? Just do whatever you are doing, at least until the market changes and keep raking in the profits.

    Now if you just want to find local trading buddies, there is a subforum for that purpose.

    In the main time, would you mind linking to that Youtube video?
    #47     Jan 22, 2018
  8. newwurldmn


    No one ostracized you. You asked a legitimate question, got legitimate answers, and started a vibrant discussion on theta as a valid risk measurement tool.

    To answer your question, you want to attract collaboration - stop humblebragging. Your 2 years of returns don't make you a good trader. Your ideas do. Spread good ideas and people will want to work with you. It you want to see a good role model, look at posts from martinghoul and sle.
    #48     Jan 22, 2018
    ironchef and sss12 like this.
  9. If you have a strategy with annual 150% compounded, then your seed of 100K should become
    100*(1+1.5)^10 = 953674.3= 953M after 10 years. If you live 50 years more (suppose you are 30 now), then your seed of current 100K should be 100*(1+1.5)^50 = 7.888609e+021 *K which might be bigger than Buffets current asset who spent 50 years already in the market.

    Since no one did attain that result in the last 400 years(after Netherlands stock market appearance), I believe an average trader like you cannot do it too, of course as well as me.
    #49     Jan 22, 2018
  10. Actually, I should've been more specific. I don't "martingale" futures. I keep adding insurance and hedges at attractive price points. They're almost always delta neutralizing hedges that gives more margin relief to take better risks on a particular trend (bullish/bearish/neutral) that I want to capitalize on through equally delta-neutral pyramiding. The hedges are either bearish put butterflies, ratio'ed put spreads or calendars/diagonals.
    I never said I had 30 non-correlated strategies or I didn't mean to imply it. All I said was i implement a mix of 6 to 7 well-known strategies on 30 different underlyings. At best I may have 5 non-correlated asset classes that I am trading. Several of the underlyings correlate each other to NDX/SPX. But when I have open bearish butterfly and ratio put spread trades, they de-correlate for short periods of time. Heck! even my Gold/CL positions are beginning to correlate with SPX now, so I'm down to 3 non-correlations.
    Just because I did well for a short period due to sheer luck of a bull market, I know this is not sustainable. Heck! I don't even know if I want to keep doing this. Trading solo for 2 years was a very stressful period of my life. Part-time, I've started a heavy-equipment leasing business that does a monthly return of 20%. I get assets at a 30% discount and they don't depreciate much (low theta). I have a fraction of the stress but very similar returns and I'm doing a service to the dallas contractor community.

    Remember, my focus is the business of trading not the trading itself. Maybe I want to invite other traders to join me and start a fund. So collaboration doesn't always mean that I want to up my trading game. Collaboration means we share ideas. I have received lower risk ideas that generate 1% weekly returns that I will incorporate
    I wasn't aware of the subforum. I posted in Hook-ups because I thought that's were people found trading buddies. Are you referring to the "Texas Traders" posting under Hook-ups?

    I can't find the particular Youtube video. But it was one of the several Capital Discussions videos where he compared mid-point price between TWS and TOS and cascaded the trader's positions. Capital Discussions has around 200 videos and I think I went through most of them. If I find it, I will try to post them.
    #50     Jan 22, 2018