my journal 2

[Yamato]

max theoretical margin vs actually used margin

The chart speaks clearly: after 30 trading days at a max theoretical margin of 67k, what has been used at the most is roughly one third. My systems only require one third of max theoretical margin (22k vs 66k):



And that also means that their return is three times as big.

Now, if indeed they made 8k per month as I am expecting... but they don't, so let's say they make 5k per month: then their return is about 25% per month. Which was my guesstimate from the start.

Since we're still in a long-lasting drawdown, I feel ok about posting one more time the latest equity line (not showing off):



We might get out of the drawdown next week. It's been lasting 30 trading days and this is how it compares in terms of trading days and $ depth to the back-tested drawdowns of the present combination of systems/contracts (yellow-shading for all those drawdowns that were already exceeded):



And finally, here's how the equity line compares to the expected equity line, according to back-tests:



That's right. Only delivering 50% of expected profit.

 

[Yamato]

Bernie Taupin

http://www.youtube.com/watch?v=JQ4_NSc4Oh0

From:
http://en.wikipedia.org/wiki/Bernie_Taupin

Bernard John "Bernie" Taupin (born 22 May 1950) is an English lyricist, poet, and singer, best known for his long-term collaboration with Elton John, writing the lyrics for the majority of the star's songs, making his lyrics some of the best known in pop-rock's history.

In 1967, Taupin answered an advertisement in England's music paper New Musical Express that was seeking new songwriters.[1] Around the same time Elton John submitted samples of his work to the paper, and the pair were brought together, collaborating on many projects since.

http://www.youtube.com/watch?v=3VIH11m6QGk

From:
http://en.wikipedia.org/wiki/Border_Song

"Border Song" is a gospel ballad originally performed by British musician Elton John. Lyrics are credited to Bernie Taupin (although John himself wrote the words to the final verse). The music was composed by John.

"Border Song" initially appeared on the 1970 album Elton John, and was released in the spring of 1970 as the LP's first single. A flop in the UK, it was released in North America a few months later. It met with more success there, especially in Canada, where it peaked at #34. The appearance of "Border Song" on the Canadian charts was Elton John's first chart appearance in any country.

http://en.wikipedia.org/wiki/Elton_John_(album)



This is somewhat related to my trading, too, where i am presently working with other people. Working with other people, like these two guys above have done for over four decades, is not easy to do. Especially it's not easy, once you reach success, to keep things as they were before: the Beatles lasted a long time, but then they broke free from one another. It's rare to find a person for whom you're as useful as he is to you, or at least more useful than anyone else is, irreplaceable by anyone else, and to keep that relationship balanced, without being tempted by freedom and by saying "the hell with you: I am better off by myself".

You know what? Elton John and Bernie Taupin started working together without meeting in person for at least six months. At least from what I read here:
http://en.wikipedia.org/wiki/Elton_John#Pub_pianist_to_staff_songwriter_.281962.E2.80.931969.29

After failing lead vocalist auditions for King Crimson and Gentle Giant, Dwight answered an advertisement in the New Musical Express placed by Ray Williams, then the A&R manager for Liberty Records.[25] At their first meeting, Williams gave Dwight a stack of lyrics written by Bernie Taupin, who had answered the same ad. Dwight wrote music for the lyrics, and then mailed it to Taupin, beginning a partnership that still continues[update]. In 1967, what would become the first Elton John/Bernie Taupin song, "Scarecrow", was recorded; when the two first met, six months later, Dwight was going by the name "Elton John", in homage to Bluesology saxophonist Elton Dean and Long John Baldry.[22]

And back then there was no email.

 

[Yamato]

ok, just perfect

Or rather: at least one thing going well.

I've talked to a friend, whom I've helped a lot with getting started on systems and he was a disappointment like many others before him, which is good in a way because I won't have any competition.

But then I just talked to my friend hosting my server, and he has great news. He has a toshiba laptop, he's happy with it, its battery lasts 6 hours... enough to outlast any power outage. He already has a secondary connection set up in his house... everything is perfect for disconnections and power outages, which are the only issues left to deal with. Now we just need to buy his laptop, and there's going to be no more failures of any type on the server hosting my systems.

Regarding the other guy, here's the long list of disappointments, at the end of which list it's him:

1) cousin with physics degree: great enthusiasm, i gave him tradestation, he installed it, then after a couple of months, it was over -- nothing achieved

2) friend with economics degree: great enthusiasm, she talked about it every time we met for years, but she never managed to even install tradestation

3) engineer friend: great enthusiasm, he was going to use matlab to build systems with me, talked for a few phone calls... it's all behind us and now we're talking about rc helicopters and how to mount an ip cam on it

4) another friend with economics degree (the guy i was telling you about): great enthusiasm, he opened the account with IB, installed tradestation, got a UPS, a new server just used for it, i built him an excel workbook with a system i created for him... he's the one who went the furthest. Now he has worked on the systems for a few days, while continuing his stupid carefree life, and today he expected compliments on his achievements and got offended I didn't pay him any compliments.

What achievements? He has built 3 systems that were the copy of the one system I gave him, except he added some useless features, which didn't add any money and the only reason they worked was that he had left some of my concepts on them.

I told him if he wanted me to tell him "good job" and lie to him, I couldn't do that, and that to make progress you had to be rigorous.

This guy cannot make one step forward unless I am there working with him, or actually doing the work for him. I thought he had the right stuff, but I was wrong. Despite all the shortcuts I showed him and all the help I've given him, he's not going to make it. I learned something in the process and it was better than watching tv, so I am not even disappointed. Also I cannot say anything against him, because he is not even half as bad as the others.

I don't want him to drown, but i can't tell him "good job" if he has done practically nothing. You cannot expect a compliment from someone like me, who spent years of hard work on this stuff. You can't just work on something for one hour and expect me to tell you "good job". It's ridiculous. I've placed more hours of work in his stuff than he has himself, and he expects some encouragement -- he demands compliments. This guy is an idiot, except a motivated idiot, but still a complete idiot.

No wait: he's not an idiot. But he's not smart enough to do it without work, without a lot of work, like I did. But then he's not motivated enough to put in the hours needed. The other guys were very smart, but not motivated at all. This guy is much more motivated, but not as smart, so he needs a lot more motivation.

But instead he joined two or three university clubs, being the president of one of them, very active socially... he's starting an advertising company among the other things. And today he even told me to "go out and have fun". The problem is that with this sociable and happy-go-lucky attitude he's not going to achieve anything and there's no way I will do this for you. Yes, I got him started on all this, and I have the responsibility of not letting him drown, but there's no way I will supplement his lack of work with my own work. I am not going to do his work while he's out having fun with his friends and girlfriend. **** him, screw him. No way. Nor am I going to be there next him to assist him along every little step he takes. I am not his tutor. Idiot.

This is going to be like for web design. At the start i was building web sites for people. Then I was teaching them how to build them, then I got too tired for that as well. At the start I was building systems for people, then I was teaching them how to build them, and now I am getting too tired for that as well. This was my last student.

Now I also have to stop working with another Italian friend, who actually was my professor, but he's dragging a new system on forever and ever. He gives me assignments, he doesn't even give me any feedback and as soon as I get back to him, he shoots more assignments. Most of all, pretty incomprehensible assignments.

On the one hand I feel like saying "will i ever rest?", but then on the other hand who looked for all these problems? Me. Who got in touch with these italian guys? Me. Who got the rc helicopter and tried to mount a camera on it? Me. And today...? I just accepted to meet this last trading systems student for tomorrow at 3 pm. And tomorrow I will have to assist him as he builds a new system.

All these problems and work derive from my effort to do something intelligent with my time instead of just watching tv or going out with friends and eating a pizza and drinking a beer, which is what people do throughout their lives in italy and in the world, too. Which is pretty sick I think. And they call it "going out and having fun".

 

[Yamato]

two "friends" awaiting me today

1 "friend" is coming to visit me at 11 am, a former banking colleague, and he wants to play some foosball with him. I am tired, I don't want to meet him, he's boring, but I said yes. Why? Because I can't refuse to meet someone who is willing to come all the way to my house to meet me. And this guy, once every two weeks, has the energy to cross rome by subway, and come here to meet me to talk about nothing, eat a pizza and drink a beer, and walk a little, and the usual boring stuff that regular friends do. I think he likes me basically, if we were to summarize the whole thing. The problem is that he's extremely boring and full of himself, and... either than this he's a good person, so I really cannot avoid him, even though I am not eager to meet him.

Then at 3 pm, another "friend" is awaiting -- and by now "friend" sounds like "pain in the ass". He's the trader I discussed about in the post above. Not very motivated, but more motivated than all the others I tried coaching, so I guess he's motivated enough to be called a trader, and enough to keep going, even without my encouragement. But he is not motivated enough to do things the way they need to be done.

On the other hand, he's annoying me in that he also expects me to tell him "i am proud of him", which is ridiculous, because I am not at all. And when he sees that I do not compliment him, he starts being aggressive and asking me if I woke up on the wrong side of the bed and if I am angry at the world and at him. I am not angry - he's just not good. In a month, he has created 3 systems that are all replicas, bad replicas of the one I gave him. Am I supposed to tell him I am proud that he did nothing? If I told him he's good and that I am proud of him, it would mean that:
1) I am lying
2) I am encouraging him to make more mistakes
3) I am deceiving him and cause him to waste time

Anyway he's going to meet me at 3 pm, so at least I tell the other friend that I have another meeting and I can only stay with him from 11 am to 3 pm, which is plenty of time.

Then I'll come home and meet this "motivated careless idiot", which is what he is. He thinks you can have a regular social life with friends and girlfriend, start an advertising company, be president of a club, and at the same time do what I am doing, while being of average intelligence. That's an idiot to me. He's a careless idiot, who is not willing to put in the hard work required.

I'll meet him at 3 pm and he'll try to make me create more systems for him. Because, after giving him a whole month to work by himself, it is evident that he does not produce anything. He came back to me with nothing at all and demanded that i told him that I was "proud of him". After seeing this attitude, I officially labeled him as an idiot. He's yet another idiot I have to defend myself from.

So I am going to try to keep the chat under 2 hours. Then at 5 pm I will be rid of all idiots friends.

You see, I am against the concept of "friend", because once a person becomes a "friend", they become special and you cannot treat them rationally any more.

Allowing someone to consider himself your "friend" binds you with an implicit invisible unspoken agreement that you'll be nicer to him than you are to regular people, nicer than it makes sense to be.

From the moment someone considers himself your "friend" he can expect you to:

1) help him
2) visit him at the hospital
3) give him money
4) listen to his boring conversation
5) meet him when you don't feel like it
6) say "yes" sooner or later to all his requests

I don't like "friends" as a rule. I prefer acquaintances. I like the relationships I have with cab drivers, with store owners, with the doorman, even with the neighbour bitch. At least I can rely on the neighbour bitch to slam her door 20 times a day, yes, but also on not asking me for sugar, milk, not asking me to go to her house for dinner... I get to stay away from that bitch. If she were a "friend", I'd be screwed twice.

So my advice to myself is don't be friend with anyone you don't really appreciate, because that will mean getting screwed over and over again.

Or rather, the really bad phase of friendship is at the start, when you're close enough to have to say "yes, of course" but not close enough to say "no way".

I have a few close friends who keep on inviting me to places and to doing stuff with them, and I keep saying, for years, "no way, I don't feel like it". Those are the friends I like: the friends I can say "no" to.

Then you have those more recent friends, to whom you can only say "yes" and you only have disadvantages. Like this colleague from work, yesterday he asked me if I wanted to meet today and i replied "yes, of course" on a text message, when the truth would have been "no way". But how can I say "no" if he's willing to come to my house and I have nothing else planned? I don't make up excuses. I either tell friends "I don't feel like meeting you" or even "you talk too much and I am not in the mood" or I tell them "yes, of course". I never say lies such as "I have to visit my grandmother at the hospital...". My only lie is "yes, of course", which is said in order not to offend the person and not to my own advantage, so it's not a selfish lie, even though it still fully qualifies as a lie.

But it's not still as I said so far. It's not a matter of knowing a person for a long time that turns him into a "friend you can say no to". I have cousins I still feel I cannot say "no" to. And I've known them well for my whole life. Then there's other cousins, usually the most annoying ones, whom I've told "you're a pain in the ass so for the weekend I am tired and I don't want to meet you".

The rule is this: the people who annoy you the most and disrespect you the most are the ones you can really afford to say the truth to. In fact the best "friends" are the ones who disrespect you and annoy you the most.

In fact I am afraid that a friend like that, Daniel, might have died.

He was always asking me out, and I always said "no, because you're heavy and you know i can only hold you for a limited amount of time". And he was heavy and hyperactive, and he knew it, and he bothered me on purpose, but hey, at least i could tell him "no way, I don't want to meet you". And there were times he was calmer, and when we were at his house I wasn't afraid of him breaking things. And if I was depressed... well, very depressed, because normally I am depressed in a stable way... if I was very depressed, he was the right person to be with, because he managed to distract you.

So. I think he might have died, because I haven't heard from him for at least 4 months. This is really depressing. He either died or he's very sick at the hospital. He's never been quiet before for this long. That was a good friend, a friend I could say "no" to. Most of the other friends are always looking to get something from you, so first thing they do is they become friends. Then they start emptying your store, like the "goodfellas" did in that restaurant. They protect you, you become their friend officially, and then you're screwed. The average friend is like a mobster, who just expects things from you and is ready to kill you if you fail to meet his expectations.

Friend = mobster = mafioso = blood pact = obligations = exploitation

So my advice to you is that you try to make friends only with very intelligent people, non-violent... possibly even vegetarians, who don't even hurt animals. All other friends are more of a threat than a gain.

I don't take deals, sir.

 

[Yamato]

Goddamn. 5 hours spent working with this bloodsucker. I guess I've been a bloodsucker to others before, so that is why I am putting up with this abuse. 5 hours of lost eyesight, five hours of my back being bent towards the laptop... waste....

... or maybe I was just rationally providing intellectual stimulation to myself. Probably that, too.

But before that, I met with two other "friends". Only one asked me for a favor -- a job basically, for his girlfriend. As usual, I ended up paying for everyone. That's just the way I am. I don't like to ask people to pay their share. But maybe it is also a strategy to manipulate them better: if I pay, I also choose where to go, and when to leave and everything. With just a few extra euros, I decide everything. I feel like they owe me, so I own the situation.

Dismissed.

 

[Hotch]

Cheer up Travis! Tomorrow's another day and all.

 

[Yamato]

Yeah. Thanks.

 

[Yamato]

excellent rc video

There's both a helicopter and a submarine with onboard cameras. Quite amazing.

http://www.youtube.com/watch?v=TAHwN7-Lo2Q


He also made some other interesting videos:
http://www.youtube.com/user/shecanatakeitcaptain#p/u


Underrated lowkey quality work:

This guy has placed several cameras on each rc plane.

 

[Yamato]

"friend" from yesterday

I didn't tell you yet how it ended with the... student I was teaching yesterday.

Premise.
I convinced him to open an account with IB, and he did. Good job.
I convinced him to install and practice on tradestation and he did. Good job.
I convinced him to buy a UPS and use it so he can run his systems (right now only one, which i've created, back-tested, and automated for him) from home, and he did. Good job.

He did exactly everything I advised him to do. Then he didn't put in a lot of work into building new systems, but I can't blame him because at the start you might get discouraged and feel lost. He would like me to stay next to him every step of the way. And I understand that, too.

But the problem starts here, when my past help has lead him to expect much more of me. And the problem gets even bigger when he actually feels that we had some sort of "deal" that he would teach me what he knows (nothing) and I would teach him everything i know (everything).

The relationship is not equal at all. I am helping him for free and asking for nothing in return. It's not a situation where you could ever say that I have screwed you in any way. And yet yesterday he really disappointed me when he said "stai cambiando le carte in tavola", which in italian means something like "you're changing the deal we had", which is a nice way of saying that I am being dishonest and disloyal. And this i cannot accept.

First of all, because obviously I would not be so stupid and irrational to make such a deal. And second of all, because there can be no deal in a situation where a person is helping for free another person.

But this guy is not just someone who misunderstood and got his hopes too high: he's a master manipulator, and tries to suck the blood out of me, while trying to even make me feel guilty about stuff.

Yesterday I had to bring him back to reality -- the reality that I cannot be manipulated.

First of all, I told him, we didn't have such a deal, second of all it would not make any sense that I make a deal to teach him everything I know for the rest of my life and receive nothing in return. If anything, I might even do that, but not as a promise or a deal. I might end up teaching you things for my entire life, but you can't consider it like a promise, I told him. Not that I'd do it now, because of how he tried to manipulate me.

But even if I were to assume his good faith, things would not be right. He would not be right in imagining any sort of "life-long commitment to help him" from me.

It would be as if someone asks you for help, you reply "yes, I am going to help you". Then you help the person for an entire month, like I did, and then, if you stop, he says "hey, we had a life-long commitment that you'd help me and teach me everything you know".

The commitment we did have was this: I told him that if we found out anything new during our work together on systems I would have to be allowed to share it with the people I am working with.

Asking him to confirm to me that "everything i learn in the process of working with him, I can share it with those guys I am working with" does not mean "everything I learn with the guys I am working with, I will share with you".

He twisted this thing to his advantage and said "hey, if everything you learn with me, you share it with others, then everything you learn with others, you must share it with me".

But this is totally ridiculous and manipulative given that from him I learn pretty much nothing, and from me he learns everything.

I ended up asking "let me know if i also owe you any money or if you're going to sue me for something".

Then he took it all back, because he knew how wrong he was and he said "i am quite satisfied with everything I've received so far".

So... I told him... "nice, first you accuse me of screwing you and then 30 seconds later you say that I am paranoid and that you're satisfied with what I've done for you?".... to me all this sounded like he was trying to manipulate me... then failed... and retreated.

Pathetic. I hope to be rid of this scumbag as soon as possible. I will help him for another 20 hours and that's it. I wanted to teach him how to swim, and I will make sure he doesn't drown, but he's crazy if he expects me to go underwater to propel him wherever he wants to go.

He was drowning... didn't even know it. I saved his life, and now he's trying the guilt trip because he wants me to be enslaved and bring him wherever he wants to go. I mean, even the systems, he can't do any work on them unless i am there with him. Because he says he has a "balanced life" unlike me. I mean I even have to hear that I have an unhealthy life on top of being exploited. So I will make my life more balanced and watch some tv instead of helping him for 5 hours on saturday and 5 hours on sunday, like I did this weekend. Scumbag.

Of course I didn't tell him "scumbag", but here's my last email to him: we spent too much time working together and there's no way I will repeat it today. Let's postpone by at least a week, on a date to be decided". I mean, 5 hours saturday, 5 hours sunday, after being told that I didnt' follow the "agreement" (of working for free for him for the rest of my life), and last night, before leaving because he had to go to dinner, he told me "let's meet again tomorrow". **** him, screw him, forget it. Forget it, forget it, forget it. The guilt trip cannot work this time.

There are no doubts that I've helped him. There are no doubts that I asked nothing in return except the intellectual stimulation of his questions. There are no doubts that there's nothing I have to feel guilty about even if I stop helping him right now. Yes, I may have gotten him into something too big for him, that he can't get out of without my help, but after hearing him try to guilt-trip me... that was just too much. Of course I will answer his questions, but from now on forget those 5-hour long skype sessions.

There's no skilled manipulator who will ever manage to make me spend another saturday or sunday afternoon and evening helping this guy.

Let alone the other "friend" I met in person yesterday. He practically asked me to help him, via my connections, to get his girlfriend a job. Screw him as well. I told him to give me the CV, but to not have any expectations, which means I will practically not make much effort.

And screw the doorman, too. If I don't get my ebay parcels today, it means he is playing with them right now. I am getting home in 2 hours and I better find some parcels waiting for me. There's 5 orders out of six that I still haven't received.

 

[Yamato]

more on "friend"

Damn. Every once in a while we all like to feel generous and feel good, and feel we're doing something to help others, but hell, not at this price. Not at the price that the guy I am helping then turns on me and tells me I have screwed him because I am delivering less help than he was expecting. Damn. I almost placed this guy on my... I almost blocked his email I mean.

Not at the price that someone you're helping then blows things out of proportion and says you're partners and that you have a deal whereby you will help him for life and show him everything you know, and in return he shows everything he knows, which is basically nothing, other than what you've already shown him. This guy is a damn manipulator and he'd deserve his email address blocked, and I might end up doing it.

These things often happen to me, because I look much more peaceful and stupid and naive that I actually am. I am a skilled manipulator myself. Except that I don't use my skills, but if I wanted to, I could get people to do things my way, even better than he can. Well, basically the whole point is that I have a "manipulation detector" and no one can really make me do anything by manipulating me. Or rather: it's harder than with the average person. And this guy's an idiot, so he's not going to get far by being sly with me.

Actually I'll block him right now, for a couple of weeks.

[...]

There, I have blocked him.

I mean, people all these years have tried in vain (and then gave up) to guilt-trip me in order to make me go to marriages: never went to one. To visit sick people at the hospital: only went if I felt like it. To go to funerals: only went if I felt like it. People tried to make me go to dinners, to coffee breaks... I always refused, because I simply do not give a **** about what people think of me. So it's not easy to manipulate someone who only cares about what he wants and doesn't care about social conventions. So I just keep on defeating all these social people and society. I am an antisocial personality or whatever it's called. I am as stubborn as rain man. You get my point. I am insensitive to manipulation like macintosh or linux is insensitive to windows viruses.

I mean take even the "kaizen-continuous improvement" team of clowns who came to my office and tried, for six months, to brainwash me into saying that they were helping us. I said from day one till the last day they were clowns and this was all a farce and a comedy, where everyone was lying, and they were wasting our time. I didn't move an inch and the more they pressured me to lie, the louder I said it was all bull****.

So, you get my point. This manipulator "friend" is not going far. He'll stay blocked for a couple of weeks now, and hopefully he'll look for someone else to manipulate and lay guilt-trips on.

 

[Hotch]

I knew you talking about your "friends" reminded me of something!

http://www.youtube.com/watch?v=Zjb7wTqe7-Y

 

[Yamato]

Yes, I see his sense of humour: close to mine. I couldn't describe it right now, but I am sure there's an exact term for it.

Hmm, he has changed a lot during the years -- he almost seems like different people:

http://www.youtube.com/watch?v=OtxsRGBkl_M

 

[Hotch]

Changed even more now that he's dead. Yeah, he still kept a lot of his humour on language though, which was good. What a great.

 

[Yamato]

Personally, I find him good but not enthusiastically so. "There's enough bull**** as it is, believe me", as he would say. My favorite stand-up comedian instead is Jim Carrey.

http://en.wikipedia.org/wiki/Man_with_No_Name

 

[YouAreNotFree]

You just reminded me about the funniest interview I have ever seen.

I love his energy.


http://www.youtube.com/watch?v=f7nplyLNYJE

 

[Yamato]

After he destroyed the breakfast on the table, I had to stop watching it, because it goes against my philosophy. That's disrespectful towards the workers at the hotel, who will have to clean and disrespectful to many others. The viewers as well. What a bad example. And not funny either.

On the other hand, of course I thank you for the link and the feedback as usual.

 

[Yamato]

can't sleep and getting drunk

getting drunk at the moment

Someone, probably the neighbour bitch, woke me up at 2.30 AM and I haven't been able to fall asleep ever since.

This is because there's some problems tormenting me:

1) server's problems: yesterday had another power outage due to storm. Will switch to a toshiba laptop very soon, with a secondary connection. So to defeat both power and connection failures. But I'll definitely have to increase the monthly fee to my friend, by 50 dollars.

2) the parcels not arriving

3) the parcels arriving any time soon, so i'll have to open them and learn to fly the helicopter.

4) can't remember now... yeah. This guy, the student, then the professor... all these "friends" asking me for favors. People first become "friends". Then they start harassing you. Enemies are best.

As we say in Italy...

From:
http://en.wikiquote.org/wiki/Italian_proverbs

Dai nemici mi guardo io, dagli amici mi guardi Iddio

Literal translation: "I (can) protect myself from my enemies; may God protect me from my friends!"
Translation: "With friends like these, who needs enemies!"

Still can't sleep, so I am getting drunk.

 

[Yamato]

systems about to end drawdown

Please don't change your mind now...



Keep going...



Needless to say, by now i have gotten used to the idea that my systems will only perform half as well as they've performed in the past.

On the other hand, 20% Return On Account every month is not bad at all. Sure, back a year ago, I used to think they were capable of making 100% a month, and I was blowing out my account every 3 months out of frustration. Now I am expecting 20% per month, and money is actually being made.

Knowing your limits, appraising your capabilities, is the fastest way to excel. Deceiving yourself, and not knowing yourself, is the way to not achieve anything. For years, I have been deceiving myself.

This is seeing the truth:



Travis, your systems only deliver half as much as they have delivered in the past. This is the truth.

When I didn't know the truth, when I didn't double-check my work, when i didnt' second doubt my work, I thought "my systems must make 100% a month, and anything less is a failure". Consequence? Was that when they won, everything was "according to predictions". When they lost, the losses were unacceptable and didn't have a right to exist. So i had to fix them, by doing some discretionary trades, such doubling up positions on a losing trade. Consequence? Sometimes it worked and in December 2008 I made 300% in one month. Then, most of the time, it did not work, and every three months doubling up wasn't enough... and I kept adding to the losing positions, and every three months I blew out my account.

There you have it. That's how knowing your limits makes you go further than deceiving yourself about your limits.

It's like in a race. You have to run 3 kilometers. How fast can you run? If you run too fast, you're going to stop before the race is over. So you have to know exactly how fast you can run and then you will run at that speed for the whole race, and your final position will be better than if you overestimated yourself.

For all these years, I expected too much of myself as a discretionary trader, and too much of my systems, and I burned myself out before the end of the race. I quit every race by blowing out my account.

Now instead I am working with other people, who tell me "slow down..." and "slow down..." and "slow down...". This is the difference. And they tell me "are you sure about this?". And "how much would you expect of this system?"... and a lot more double-checking... which would also be useful at work. At work no one ever audited me. I feel like I am infallible, just like I felt with trading systems. Probably there's just as many problems at work as there were with my trading systems. Except it's hard for someone to come to me and tell me all my problems, such as hypothetically:

1) are you sure you're that good?
And I'd reply "not really, but you guys are a bunch of idiots".

But it would be good if someone came, so smart, that he could show me I am doing something wrong. Like this engineer who recently came and showed me a couple of things I didn't know.

2) are you sure you work more than everyone else?
And I'd reply "of course, you guys are always on a coffee break".

And so on.

Maybe there would be some debunking (on me).

So.

I am still wide awake and still trying to get drunk enough to fall asleep. And in the meanwhile I turned off the alarm of course.

 

[Yamato]

still getting drunk, still problems sleeping

Had to work on the server, still getting drunk because I can't sleep. Also because the helicopter hasn't arrived yet. They said "5 working days" and it's already been 8. Nor have arrived the other 4 parcels. Not a single one.

I really hope the doorman isn't playing with my parcels right now.

 

[Yamato]

bbmac started this enquiry by asking some questions that lead to this post:
http://www.trade2win.com/boards/trading-journals/85510-my-journal-2-a-274.html#post1629080

And now I am taking it much further, by using Palisade's Risk Optimizer and drafting a list of fixed requirements so to automated and make univocal the whole process. Indeed, the systems are just 120, but the combinations of them (including the contracts traded) are infinite, and even more infinite are the performance parameters used in selecting the right combination.

Just a few days ago, I said "why automate it, when instead it can be done manually and with discretion?". Instead he was right. I need to automate it because it can be done better and more quickly and more rigorously.

There will be two lists of must-have requirements:

1) list of requirements for individual system in order to be traded
2) list of steps and requirements in using the Palisade's Risk Optimizer software

The first list still has to be established but it goes like this. A system cannot be included if:
1) its max loss exceeds x% of margin allocated
2) its average sharpe ratio (back and forward) is below x
3) its number of forward-tested trades is below x (just an example, because it cannot be used)

The second list is like this.

When using Risk Optimizer:

1) the optimization value will be combined sharpe ratio (eg), or a formula which is...
2) fixed parameter that doesn't allow max drawdown to last longer than x days
3) fixed parameter...

Everything else is free. Given these rules, you could either let Risk Optimizer do the rest, or if you see that you still feel the need for discretion, you could add more requirements.

Anything beats spending hours double-checking each specific system and checking if it meets this and that improvised requirement, with the risk of forgetting some of them along the way.

All the requirements for selection should be decided right now and always used in the future.