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Yamato
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The problem is that my systems work on those 9 futures (on forex, stock indexes, bonds, gold, oil), and if I trade different things, such as those IG products or FXCM type of thing, I'll need different brokers, but if I change brokers my whole automation will change. With IB you have one automation and with another broker you'll have another automation, even if they had the same underlying assets.
Yamato
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marilyn monroe
This guy played carlo rizzi in the godfather. Earlier in his life he was in the mafia. He seems to be telling the truth about kennedy and marilyn. Very interesting video:
http://en.wikipedia.org/wiki/Gianni_Russo
http://en.wikipedia.org/wiki/Marilyn_Monroe
This guy played carlo rizzi in the godfather. Earlier in his life he was in the mafia. He seems to be telling the truth about kennedy and marilyn. Very interesting video:
http://en.wikipedia.org/wiki/Gianni_Russo
http://en.wikipedia.org/wiki/Marilyn_Monroe
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Yamato
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Market Wizards: Ed Seykota: Richard Donchian
My favorite trading book so far is Market Wizards. My favorite interview in it is Ed Seykota. Seykota's favorite trader is this guy:
http://en.wikipedia.org/wiki/Richard_Donchian
A little history I dug out on Donchian and his family:
http://sgarmenianchurch.org/index.php?option=com_content&view=article&id=52&Itemid=64
http://www.mindspring.com/~jslj/paulsdonchian.html
Newspapers:
http://news.google.com/archivesearc...9&scoring=n&hl=en&ned=us&um=1&sa=N&nav_num=48
http://news.google.com/archivesearch?q="richard+donchian"&btnG=Search&hl=en&ned=us&um=1&scoring=n
Really funny biography here:
According to wikipedia he died at 88, so this article is telling us that he kept on trading for a few years after his death. That's what makes automated trading superior to discretionary trading.
But I guess the reality is that the guys at streetdirectory.com weren't happy with just plagiarizing some other article and felt the need to add some false information. However, it really strikes me how a relatively unknown trader is known to such ignorant/stupid/imprecise people.
My favorite trading book so far is Market Wizards. My favorite interview in it is Ed Seykota. Seykota's favorite trader is this guy:
http://en.wikipedia.org/wiki/Richard_Donchian
A little history I dug out on Donchian and his family:
http://sgarmenianchurch.org/index.php?option=com_content&view=article&id=52&Itemid=64
http://www.mindspring.com/~jslj/paulsdonchian.html
Newspapers:
http://news.google.com/archivesearc...9&scoring=n&hl=en&ned=us&um=1&sa=N&nav_num=48
http://news.google.com/archivesearch?q="richard+donchian"&btnG=Search&hl=en&ned=us&um=1&scoring=n
Really funny biography here:
According to wikipedia he died at 88, so this article is telling us that he kept on trading for a few years after his death. That's what makes automated trading superior to discretionary trading.
But I guess the reality is that the guys at streetdirectory.com weren't happy with just plagiarizing some other article and felt the need to add some false information. However, it really strikes me how a relatively unknown trader is known to such ignorant/stupid/imprecise people.
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Yamato
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major concepts of my money management: max loss and ROA
Basically, after excluding a lot of details, the two major rules of my systems' money management are these:
1) maximum loss:
systems are allowed to trade contracts according to how much their maximum loss is.
For example, let's say that I have 10k and that a system's maximum loss is 500. If I set the maximum loss allowed to 20%, that system will be allowed to trade as many contracts as would cause a maximum loss of 2000 dollars, so 4 contracts.
If another system has a maximum loss of 2000, then, with 10k, it will be allowed to trade only 1 contract. The second contract will be allowed at 20k.
2) Return On Account:
I measure the quality of systems by their Return On Account and allocate capital accordingly. By my rules, Return is the profit made during forward-testing. Account, which as measured by TradeStation means the drawdown, by my rules is the maximum of whichever has the highest drawdown between forward-testing and back-testing (over the past 10 years). This method tells me exactly how good a system is.
Say a system lost during its worst drawdown as much as 10k and has a forward-testing profit of 5k. This to me is a ratio of 50% of Return On Account: a Return of 5k divided by an Account needed of 10k, to withstand the maximum drawdown. Forget the fact that systems require different margins, which also should affect ROA, but which is included with other rules. So we got a system with a ratio of 50%.
Then say we have a system that has a maximum drawdown of 10k like the previous example, but a Return of 20k. To me this system is 4 times as good, and its ratio will be 20k divided by 10k, which is 200%.
Accordingly, I will allocate contracts as follows. First of all, I rate all these ratios on a scale, with the highest being given a rating of 100%, and the others less, dividing them by the highest ratio. In this case I get 100% for the second example, and 50/200=25% for the first example. Accordingly, they will be allocated 100% of capital and only 25% of capital, which will then depend on how much capital the best system is given. If I'm desperate for capital I could even give all capital to every system, whenever I get a signal, but this will cause me to miss a lot of signals, especially if the best system is trading.
Now these two parameters, the max loss and the ROA combine like this: systems will be allowed to trade according to how good they are and to how big their maximum loss is, which makes a lot of sense.
Some potential scenarios:
One system could be awesome, with a great return and a small drawdown, but if its maximum loss is huge, then I might not be able to trade it.
Another system could have very small drawdown, very small maximum loss, but still not much return: take for example a system that makes 100 and loses 100 once a day. This will have no warning signs, but without a decent return, it will also not get traded.
Now let's take the case of a system with a good return of 10k, but with a drawdown much bigger than its return, even if it were made by small losses. Such a system won't get traded either, because of the disproportion between its drawdown and its gain.
So the only absolute value is the maximum loss, whereas the drawdown and the gain and relative to one another. A small gain with no drawdown gives a good ratio, potentially better than any other system (e.g.: zero drawdown, and 1 dollar gain) and somewhat misleading. That is why all systems are given the drawdown according to back-testing: this way even with a small and lucky forward-testing they don't have unrealistic ROA ratios due to no losses during the last 7 months of forward-testing.
All these rules have been developed during the last few months and have been the same for the past 3 months or so. Even today I reviewed them looking for problems, but I kept them exactly the same, because they are perfect from every point of view.
Basically, after excluding a lot of details, the two major rules of my systems' money management are these:
1) maximum loss:
systems are allowed to trade contracts according to how much their maximum loss is.
For example, let's say that I have 10k and that a system's maximum loss is 500. If I set the maximum loss allowed to 20%, that system will be allowed to trade as many contracts as would cause a maximum loss of 2000 dollars, so 4 contracts.
If another system has a maximum loss of 2000, then, with 10k, it will be allowed to trade only 1 contract. The second contract will be allowed at 20k.
2) Return On Account:
I measure the quality of systems by their Return On Account and allocate capital accordingly. By my rules, Return is the profit made during forward-testing. Account, which as measured by TradeStation means the drawdown, by my rules is the maximum of whichever has the highest drawdown between forward-testing and back-testing (over the past 10 years). This method tells me exactly how good a system is.
Say a system lost during its worst drawdown as much as 10k and has a forward-testing profit of 5k. This to me is a ratio of 50% of Return On Account: a Return of 5k divided by an Account needed of 10k, to withstand the maximum drawdown. Forget the fact that systems require different margins, which also should affect ROA, but which is included with other rules. So we got a system with a ratio of 50%.
Then say we have a system that has a maximum drawdown of 10k like the previous example, but a Return of 20k. To me this system is 4 times as good, and its ratio will be 20k divided by 10k, which is 200%.
Accordingly, I will allocate contracts as follows. First of all, I rate all these ratios on a scale, with the highest being given a rating of 100%, and the others less, dividing them by the highest ratio. In this case I get 100% for the second example, and 50/200=25% for the first example. Accordingly, they will be allocated 100% of capital and only 25% of capital, which will then depend on how much capital the best system is given. If I'm desperate for capital I could even give all capital to every system, whenever I get a signal, but this will cause me to miss a lot of signals, especially if the best system is trading.
Now these two parameters, the max loss and the ROA combine like this: systems will be allowed to trade according to how good they are and to how big their maximum loss is, which makes a lot of sense.
Some potential scenarios:
One system could be awesome, with a great return and a small drawdown, but if its maximum loss is huge, then I might not be able to trade it.
Another system could have very small drawdown, very small maximum loss, but still not much return: take for example a system that makes 100 and loses 100 once a day. This will have no warning signs, but without a decent return, it will also not get traded.
Now let's take the case of a system with a good return of 10k, but with a drawdown much bigger than its return, even if it were made by small losses. Such a system won't get traded either, because of the disproportion between its drawdown and its gain.
So the only absolute value is the maximum loss, whereas the drawdown and the gain and relative to one another. A small gain with no drawdown gives a good ratio, potentially better than any other system (e.g.: zero drawdown, and 1 dollar gain) and somewhat misleading. That is why all systems are given the drawdown according to back-testing: this way even with a small and lucky forward-testing they don't have unrealistic ROA ratios due to no losses during the last 7 months of forward-testing.
All these rules have been developed during the last few months and have been the same for the past 3 months or so. Even today I reviewed them looking for problems, but I kept them exactly the same, because they are perfect from every point of view.
Yamato
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Absolutely staggering. This is a mature intelligent person, probably more than Victoria Gotti and her children. Angel Gotti is the sister of Victoria and daughter of John Gotti. Very interesting interview:
http://www.cbsnews.com/video/watch/?id=5343584n&tag=api
This is all very interesting stuff, including these pictures:
http://www.cbsnews.com/stories/2009/09/26/indepth/main5343668.shtml
Fascinating stuff:
Same as above but better quality of images:
http://www.cbsnews.com/video/watch/?id=5344062n
These mobsters have to be understood and pitied. In fact, in all of society there's a major difference between violent people and non-violent people. The former are violent in different degrees, and we meet violent people almost every day. Mobsters are the most violent people, and that's all. If anything, they're better than other people who use violence for no personal gain.
These people who have to be pitied because, within their violent and poor environment, they didn't know any other way to succeed. They were already violent to begin with, they wanted to be successful, and there you have your mobsters. Of course, they have to be put in jail, but also there's no reason to hate them, because it's quite easy to understand them. We come across overbearing people every day in our lives: the only difference is that we never know how far these people will go in their threatening of physical violence. Usually it's a bluff, but one day you could come across a mobster and get yourself killed. So I'd say it's best to never challenge anyone.
http://www.cbsnews.com/video/watch/?id=5343584n&tag=api
This is all very interesting stuff, including these pictures:
http://www.cbsnews.com/stories/2009/09/26/indepth/main5343668.shtml
Fascinating stuff:
Same as above but better quality of images:
http://www.cbsnews.com/video/watch/?id=5344062n
These mobsters have to be understood and pitied. In fact, in all of society there's a major difference between violent people and non-violent people. The former are violent in different degrees, and we meet violent people almost every day. Mobsters are the most violent people, and that's all. If anything, they're better than other people who use violence for no personal gain.
These people who have to be pitied because, within their violent and poor environment, they didn't know any other way to succeed. They were already violent to begin with, they wanted to be successful, and there you have your mobsters. Of course, they have to be put in jail, but also there's no reason to hate them, because it's quite easy to understand them. We come across overbearing people every day in our lives: the only difference is that we never know how far these people will go in their threatening of physical violence. Usually it's a bluff, but one day you could come across a mobster and get yourself killed. So I'd say it's best to never challenge anyone.
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Yamato
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Opting for swing trading or whatever it's called
I am realizing that whereas I really suck at discretionary intraday trading, if I take a multi-day approach to my trades, I become as calm as needed, I make more money, and get rid of commissions and spread costs... overtrading worries are gone, which is the most important thing.
If I am in a multi-day trade and all my capital is in it, I will definitely not exit it in order to make a quick intraday trade.
I will also plan much more carefully my swing trade than I would with several intraday trades.
Also, there will be less risk of losing control of my trades if there's only one trade per week.
If I could make 2 or 3 successful swing trades, that would bring my capital to what I need to do automated trading again.
I am realizing that whereas I really suck at discretionary intraday trading, if I take a multi-day approach to my trades, I become as calm as needed, I make more money, and get rid of commissions and spread costs... overtrading worries are gone, which is the most important thing.
If I am in a multi-day trade and all my capital is in it, I will definitely not exit it in order to make a quick intraday trade.
I will also plan much more carefully my swing trade than I would with several intraday trades.
Also, there will be less risk of losing control of my trades if there's only one trade per week.
If I could make 2 or 3 successful swing trades, that would bring my capital to what I need to do automated trading again.
Sang Froid
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Re: Opting for swing trading or whatever it's called
Could you honestly say you could stick to 2 or 3 swing trades, for a substantial period of time? I've tried and I get the 'traders itch' my mouse almost starts opening trades on it's own taking punts left right and centre.
This might sound counterintuitve but I recently tried uping my lot size, tightening my stops and lowering my T/P, this had the added benefit of not overtrading my account, I also employed a strict 1:2 RR ratio with fixed S/L and T/P to stop me from gambling and white knuckling the trade, i.e s**t me eur/usd just shot up quick quick go long....
I at least now try and pick the highly probable trades just once or twice a day, still I have a LONG way to go, but I can see an improvment in my trading, anyway I've hijacked your thread here a bit, what I mean to say is..... from reading what you've said so far I think that you are not suited to swing trading, sooner or later you're gonna feel that itch... you need to day trade, I believe that half the battle in this game is finding a trading style suited to YOUR personality not just trading the way someone else does cos it works for them..... it probably wont work for you.
Just a thought
Could you honestly say you could stick to 2 or 3 swing trades, for a substantial period of time? I've tried and I get the 'traders itch' my mouse almost starts opening trades on it's own taking punts left right and centre.
This might sound counterintuitve but I recently tried uping my lot size, tightening my stops and lowering my T/P, this had the added benefit of not overtrading my account, I also employed a strict 1:2 RR ratio with fixed S/L and T/P to stop me from gambling and white knuckling the trade, i.e s**t me eur/usd just shot up quick quick go long....
I at least now try and pick the highly probable trades just once or twice a day, still I have a LONG way to go, but I can see an improvment in my trading, anyway I've hijacked your thread here a bit, what I mean to say is..... from reading what you've said so far I think that you are not suited to swing trading, sooner or later you're gonna feel that itch... you need to day trade, I believe that half the battle in this game is finding a trading style suited to YOUR personality not just trading the way someone else does cos it works for them..... it probably wont work for you.
Just a thought
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Yamato
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We'll see if I am ready for it or not. We evolve and change. I've changed many things as a trader since I started. You could have told me 5 years ago that I wasn't suited to automated trading, but now it's a reality. It all depends on how we reach a certain behaviour. I may not like something, but if I tried everything else and what I don't like is the only thing that works, then I will probably do it.
Swing trading was initially the least attractive thing to me (I don't like the irregularity of it), as you might have guessed, but after trying just about everything and seeing that I fail at everything (as far as discretionary trading) except maybe swing trading or similar, then, as long as a person wants to make money, he's bound to do what he can do sooner or later.
What is clear to me now is that the "itch" you talk about is there and it's overwhelming if I have capital to invest, free time, and I am in front of the charts. And I don't want it to be overwhelming. If instead I am not in front of the charts, because I am already in a multi-day trade, and my capital is not available because I am already in a trade... then I won't make one trade per day thereby risking relapsing several times per day. Swing trading feels really good right now. Maybe it won't work, just like everything else in my discretionary trading, or maybe it will. But it might work, because what I have to fight is the addiction, and when I make one trade per week, the addiction to trading is totally gone. And yet I can also feel that I am trading at the same time, because I am in fact in a trade.
Swing trading was initially the least attractive thing to me (I don't like the irregularity of it), as you might have guessed, but after trying just about everything and seeing that I fail at everything (as far as discretionary trading) except maybe swing trading or similar, then, as long as a person wants to make money, he's bound to do what he can do sooner or later.
What is clear to me now is that the "itch" you talk about is there and it's overwhelming if I have capital to invest, free time, and I am in front of the charts. And I don't want it to be overwhelming. If instead I am not in front of the charts, because I am already in a multi-day trade, and my capital is not available because I am already in a trade... then I won't make one trade per day thereby risking relapsing several times per day. Swing trading feels really good right now. Maybe it won't work, just like everything else in my discretionary trading, or maybe it will. But it might work, because what I have to fight is the addiction, and when I make one trade per week, the addiction to trading is totally gone. And yet I can also feel that I am trading at the same time, because I am in fact in a trade.
Sang Froid
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If it feels right for you then go for it, I'm just playing devils advocate. I sincerely hope it works for you, the problem I had with it was, even though I was in a trade I could see all these other potential set ups arise throughout the course of the trade and end up taking one or two because I was bored of the trade I was in, or even worse was with swing trading was waiting for days on end for the perfect set up with no trading at all, so I tried scalping while I waited. BIG mistake!
I can honestly say if I'm sat in front of the screen I can feel the tension rising inside me until I feel it in my throat, actually needing to make a trade to satisfy this craving. This is a real physical effect I feel, like a withdrawl symptom. If I've not got my platform open it's not too bad, but if I look at charts I can't help myself... just one more trade, just one more.
If you can control those emotions that you feel and you feel more comfortable swing trading then go for it my man, I wish you the best of luck, maybe this time you've cracked it.
I can honestly say if I'm sat in front of the screen I can feel the tension rising inside me until I feel it in my throat, actually needing to make a trade to satisfy this craving. This is a real physical effect I feel, like a withdrawl symptom. If I've not got my platform open it's not too bad, but if I look at charts I can't help myself... just one more trade, just one more.
If you can control those emotions that you feel and you feel more comfortable swing trading then go for it my man, I wish you the best of luck, maybe this time you've cracked it.
Yamato
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Everything you said applies to me: the addiction is all there for me, too, if I look at the chart and I have margin available. But, as I said, if there's no margin, and I am not looking at the chart because there's no margin and I have an ongoing trade, the addiction is pretty much gone. We'll see. So far I've witnessed over 10 years of trading addiction, overtrading, compulsive gambling, with the same symptoms you describe.
FXTrend240
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left you a pm
Yamato
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Thanks for the link. I briefly checked it out. However, I am rarely a follower. I'd rather do things by myself my own way. I don't want to be a student of anyone. I'd rather do research and read on my own. I am self-taught. I am my own teacher. I don't like teachers in general. I like people who explain things clearly and people who answer my questions. I don't like the guru attitude, "come with us and we will teach you".
For the same reason, I was doing poorly in school. I didn't want anyone to tell me how I should see things. I like wikipedia. I can check it out whenever I am curious. I don't like: enrolling, subscribing, following. All school is based on enrolling. I don't like that. You take a class, can't really ask much, and you get judged a lot during the class. That's total crap to me.
For the same reason, I was doing poorly in school. I didn't want anyone to tell me how I should see things. I like wikipedia. I can check it out whenever I am curious. I don't like: enrolling, subscribing, following. All school is based on enrolling. I don't like that. You take a class, can't really ask much, and you get judged a lot during the class. That's total crap to me.
FXTrend240
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i understand completely, like i said in the pm i don't follow him, i just read, took one setup and applied to my developing method
.Anyway, swing trading, this is where it's at
Yamato
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self-control update
Today's self-control:
I got back to the good levels of when I started. This is thanks to my ongoing trade on the CAD, which has been keeping me off compulsive trading for days. And if I stay off compulsive trading, I am pretty stable.
Today's self-control:
I got back to the good levels of when I started. This is thanks to my ongoing trade on the CAD, which has been keeping me off compulsive trading for days. And if I stay off compulsive trading, I am pretty stable.
Adamus
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Who's going to grab a screenshot of it actually at 200000? Or more attractive to me 199,999
Actually I just thought, a lot of them are probably bots from Russia or China trying to set up accounts to spam the forum.
Yamato
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To my compulsive personality this is a very important event: I've been checking that figure ever since it was at 195,000. Particularly because on top of this forum it still says "185,000 MEMBERS". I am getting restless and waiting for an update that says "200,000 MEMBERS". Tonight I won't be able to sleep over it.
Yamato
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self-control and automated trading updates
My self-control seems to go in trends almost like stock prices: a few days rising and a few days falling (not random). We'll see how it evolves in the future. Of course, in case I totally quit discretionary trading, I might remove that item: it has taken a lot of points from my self-control, as i rate it from 1 to 10, whereas the others are rated from 0 to 1.
Automated trading
My automated trading went so so, and it only made 500 (all paper trading), but still positive, so next week the signals will not need to be reversed. It seems, from my systems, that the DX will go down, and all currencies of course will rise towards the dollar. Really strange considering the Canadian Dollar, which is above .98. Had I made 500 dollars less, next week signals would have been reversed.
As far as discretionary trading, I've lost more money, and it looks like i will have to take that loan so I can quit it altogether, and resume my automated trading.
Once I invest the loan's money and start investing with my automated systems, I better make money fast because in less than two months, I have a holiday coming up with my highschool friends, and I'll need to run my systems from a server overseas (at a friend's), which will cost me about 1000 dollars, as he'll have to buy a server and run it for me.
My self-control seems to go in trends almost like stock prices: a few days rising and a few days falling (not random). We'll see how it evolves in the future. Of course, in case I totally quit discretionary trading, I might remove that item: it has taken a lot of points from my self-control, as i rate it from 1 to 10, whereas the others are rated from 0 to 1.
Automated trading
My automated trading went so so, and it only made 500 (all paper trading), but still positive, so next week the signals will not need to be reversed. It seems, from my systems, that the DX will go down, and all currencies of course will rise towards the dollar. Really strange considering the Canadian Dollar, which is above .98. Had I made 500 dollars less, next week signals would have been reversed.
As far as discretionary trading, I've lost more money, and it looks like i will have to take that loan so I can quit it altogether, and resume my automated trading.
Once I invest the loan's money and start investing with my automated systems, I better make money fast because in less than two months, I have a holiday coming up with my highschool friends, and I'll need to run my systems from a server overseas (at a friend's), which will cost me about 1000 dollars, as he'll have to buy a server and run it for me.
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