Curious of the traders out there that are "Medium Frequency" Producing positive gains most months. Have you Plateaued after years of good trading? Or do you improve a bit more each year? I think this year I should do about 70% return on my account. I'm estimating, after recent tweaks/adjustments that next year I should do closer to 90%. I guess I am curious if traders with similar results find themselves improving each year. (The reason why I state "Medium Frequency" or shorter term traders placing 30 to 400 trades a month is their results are typically non-correlated to the stock market)
I feel that my trading technique is improving however the market I trade has become stubbornly difficult of late. I don't short nor hedge. The last few months have been treading water, was showing healthy profit about 6 months ago but lost that. What changed for me was deciding to implement a new algo, in my enthusiasm to try it out which had to be done in order to road test it, I have overtraded too frequently and too many positions. Many of these positions however are small sizes (about 1% of portfolio) but they are losing money. Saying that, most if not all are 'penny dreadfuls' and can rebound spectacularly in a very small space of time. I trade predominantly metals as my core theme and these have underperformed of late. I call myself medium term trader via being an active investor, typically holding for several weeks to months, but sometimes hours or days, depending if I hit it right. As usual, a small minority of positions make me the most money and these run for long periods of time. Have decided October to sit on my hands and not trade unless something jumps out at me and forces me to grab it, for example, I snaffled up a few new gold positions a week or so ago. My technique is to target tops and bottoms of trends.
I think each trader will have a different experience. I would describe my evolution from a newbie to a profitable trader as a rollercoaster. For a few years my trading was not stable: going from big losses to big profits and back. Some months I could not improve my trading while sometimes the performance went up very strong. All depended on the research and trial by error to find the "holy grail". Some ideas were good and some were really bad. But to find out all that it took sometimes months before it was clear. So I lost years in trying out new things, but unfortunately I knew that only in hindsight. But all this is part of the process to grow to a performing system. It is impossible to skip the bad periods and only take the good ones, unless you have a crystal ball. The last 10 years my performance did not change much anymore as I consider my system as mature. Rather trying to simplify everything without losing performance. Reducing screentime and holding time without losing performance, and sometimes even improve performance.
When you pick tops and fish bottoms, you have to have very well-defined stop-loss targets and have the discipline to take out your position(s) once they are reached accepting also the risks that they could be the new tops/bottoms and price would reverse back to the original direction which could give you double the losses should you choose to reverse-trade the other direction after stopping losses.
The more years that goes by for me, the less I estimate a % return. A risk adjusted stat taking into account DDs is better IMO. Sharpe is not in any way perfect, but it's better than simply a % return figure. You would need at least 2 consecutive years of higher return than previous year to call it a up trend otherwise it's just normal normal fluctuations.
Two months ago, I had like $8,000 in profits in my 3 small accounts. Now, I have about $4,000. The last couple of weeks, I made a lot of dumb mistakes trading and that is where most of the $4,000 went. Some I spent to pay bills. I have improved my returns but, at a very slow rate. The problem is I tend to dollar count. Most traders do dollar count as well! What is dollar counting? It is the act of taking profits much, much sooner rather than letting the profits pile up! To remedy the problem, I have stopped writing down the values of my option trades on my log sheet. That way, I do not see any profits coming in. Just focus on the stockcharts. Imagine how much more I would have earned if I was not dollar counting? Several multiples of that $8,000 and would have grown my capital much, much larger to boot! Just my 2 cents, I think any aspiring trader can be a very good trader if you do some self-examination and correct your mistakes. Your returns will also, get larger!
I believe next to impossible for my automation to make your returns based on how I trade most funds in longer term durations like in dividend optionable stocks of buying very low years ago or searching for extremes in commodities and holding out for 75% of 9 year cycle once extremes are found. I had to learn 8 years ago that computerize trading was going to be mainstay in the future, equity curve smoothness meant more than insane profits. While getting 70% plus sounds nice, I doubt for myself is even achievable because I hedge everything so often whether on entries or hedge open profits when downturns expected. I have learned more on how to be profitable while taking a more defensive trader stance concentrating on reducing drawdown and smoother equity curve. Being in my 60s, one's mindsets change and now time spent trading 99.9% of 401k, I certainly want to play the game to make much more, but more importantly for me is do better than Indexes, come out positive for the year and by having much less drawdowns than Indexes. Intraday is fairly consistent but opt for consistent makeable profits first than wild swings on runners. Intraday am scalper first, so those automation as doing many trades per day, some 24/5.5, exceeding your "Medium Frequency" request. I do improve in knowledge every year, but more on side of conceptionally than new patterns. I have defined new terms for myself such as "cash rental" which is outlaying of cash in a trade going nowhere and if going nowhere, why is system not selling options. So more concepts on total picture than just one signal.