Discussion in 'Journals' started by Pekelo, Jan 4, 2008.
New year, new Journal, same rules....
Selling at 1428.50.... nice start for the year...
I guess this dude was right, overnight we went up to 1432, but I sleep during the night:
Pekelo (Jan 4, 2008 3:51:31 PM)
I say at least 10 points upgap for Monday
The trade was rather easy, because as I mentioned in my ADU thread:
Long 1394... No SL.
ES 1356 at the moment.
I wish I had all the money I've lost from not having a stop. I could probably buy my own island.
If you read the rules, that is a 3% DD at 1350, and the account was still in the money by 1% because the built in 4% profit.
I can leave with a 3% DD....
I know that you are an accountant maybe even a CPA but your journal has similar flaws as marketserfer's. Should you trade REAL money you'd notice that long time ago.
80% of the fund in CD getting 4%
20% of the fund reserved for trading ES
Just to let you know 4% return on 80% of the capital is not the same as 4% on 100% of the capital.
good luck in your accounting career.
Edit: Fund has experienced 3% draw down in one week and you are getting same 3% in 52 weeks.
Just out of morbid curiosity how much is the DD at ES 1310?
currently ES at 1280 down 8% from entry 1394.
Down around 126pts on this ONE trade. Guess stops should be in place on trades. Oh well, keep holding.. its gotta bounce up !!
OK, time to do some explaining...
Nope. The CD gets a 5% interest, but because only 80% of the fund is in it, that's how I got the 4%. Although I am not an accountant, I can do simple math.
Keep in mind that the purpose of the journal is to show how a small fund could OUTPERFORM the market the SIMPLEST possible way. Guess what? Just in 2 trades and in 2 weeks by missing the first 5% drop of the market, I have already done that!!!
If I don't do ANYTHING from now on just roll over 3 times and stay long until the end of the year, I have already outperformed the market by 9%!!! Why?
Because the market was already down -5% when I went long and 4% comes from the built in profit.
So although I was early with going long, I thought I would lock in a sure 9% advantage over the market.
Why didn't I use a stop loss? For several reasons:
1. Last year I overtraded the journal. There is really no need for more than a couple of trades. Of course just when I decide to go lazy, volatility picks up.
2. I didn't expect this much downmoves so quick.
3. I was expecting a surprise ratecut and I didn't want to miss the surge.
4. The name of the 'fund" comes from being very similar, mimicking the market's moves, basicly being long most of the time. It only takes a couple if sidestep into cash a year, and the goal is achieved.
Last year when I got bored with the project I missed out on a big upmove, because I didn't stay long. I decided this year I will stay in longer. (of course there is a disadvantage, as we can see)
Right now the trade is down about -9%, so the fund is at -5%, which isn't that bad if we think of the market being at -14%. Let's not forget that we still have more than 11 months to go, and according to the rules I might use one averaging down, if desperate times call for desperate measures.
Of course with real money I would have used stop losses, but this makes the journal more interesting, otherwise I would be beating the market by 15%, and I would probably stop, because really, what's the point?
Any other questions? Thanks for following....
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