Trading for a Living

[Benj1981]

That depends on the style and frequency of trading though doesn't it? If a day trader making several trades a day was in a 2 year drawdown this has more significance than a long term trader who makes one trade a month.

Yes.

 

[Benj1981]

My mentor did say that in order for a 2 year dd to become "very insignificant" trading 40% optimal bet size, then that should occur over a 15 year sample minimum (trading 3-5 times a week), so not a 10 year sample like i said. Knuckles wrapped. But, i was right about a 30 year sample!!

 

[advfntrader]

with a 2-year drawdown you are NO GOOD. simple as that , you can't trade for 2 years and not make any money if trading is your only way to earn a living. you'd be homeless

 

[Benj1981]

with a 2-year drawdown you are NO GOOD. simple as that , you can't trade for 2 years and not make any money if trading is your only way to earn a living. you'd be homeless

You are wrong, and shouldn't say these things unless you have facts and statistics to back them up.

I'm talking about trading systems going through drawdowns using the model example, which assumes all profits have been reinvested. This model equity curve would differ to the trader's real equity curve, as he will have a different plan in how he reinvests profits if he trades for a living. This is another subject by itself.

 

[Mr O]

I prop trade so it's slightly different for me. I get a 70% cut, so when I withdraw, the firm takes their 30% out as well. Each month i'll pay myself 50% of my profits, which includes the firms 30%.

 

[Shakone]

My mentor did say that in order for a 2 year dd to become "very insignificant" trading 40% optimal bet size, then that should occur over a 15 year sample minimum (trading 3-5 times a week), so not a 10 year sample like i said. Knuckles wrapped. But, i was right about a 30 year sample!!

benji, how are you defining "very significant" (Are you talking 99% confidence levels etc), and what are you calling "optimal bet size"?

4 trades a week, 50 trading weeks a year (say), so we're tlaking in the region of 400 trades over the 2 years.

 

[barryb]

benji, how are you defining "very significant" (Are you talking 99% confidence levels etc), and what are you calling "optimal bet size"?

4 trades a week, 50 trading weeks a year (say), so we're tlaking in the region of 400 trades over the 2 years.

"very insignificant" relates to the maximum length of drawdown one could expect - up to the reader to do the required research to quantify this.

Kelly, optimal f, etc.

 

[barryb]

who is this mystical "mentor" you have then Benji ??

I'm the "mystical" one.

 

[Shakone]

"very insignificant" relates to the maximum length of drawdown one could expect - up to the reader to do the required research to quantify this.

Kelly, optimal f, etc.

Thanks.

Kelly doesn't really apply to trading, I don't understand why people use that.

 

[D70]

You are wrong, and shouldn't say these things unless you have facts and statistics to back them up.

I'm talking about trading systems going through drawdowns using the model example, which assumes all profits have been reinvested. This model equity curve would differ to the trader's real equity curve, as he will have a different plan in how he reinvests profits if he trades for a living. This is another subject by itself.

Come on.
ADVFN is right.
No one in their right mind would trade thru a 2 year drawdown straight out of the starting blocks. Only if your equity balance was significantly up and still up would you possibly persevere.

And can you stop regurgitating your 'mentor'. Get him/her to post rather than chinese whisper what you think he told you.

 

[Shakone]

Come on.
ADVFN is right.
No one in their right mind would trade thru a 2 year drawdown straight out of the starting blocks. Only if your equity balance was significantly up and still up would you possibly persevere.

And can you stop regurgitating your 'mentor'. Get him/her to post rather than chinese whisper what you think he told you.

This depends. If Paulson believed there would be a housing crash or a credit crunch coming, would he wait through two years in drawdown? Yes, why not. If the payoff will be big enough and if he still had full faith that he was right.

It really depends on the system. It seems likely that benji is talking about a low win rate, but high reward to risk strategy. His comments aren't true across all strategies.

 

[D70]

This depends. If Paulson believed there would be a housing crash or a credit crunch coming, would he wait through two years in drawdown? Yes, why not. If the payoff will be big enough and if he still had full faith that he was right.

It really depends on the system. It's seems likely that benji is talking about a low win, but high reward to risk strategy. His comments aren't true across all strategies.

As in, would Paulson keep trying to short the market and taking 2 years of losses? Yeah, sure, Paulson can. He gets a nice management fee and has however many years of profits to back him up.

I guess the conclusion is like you say, depends on the system and the trader more specifically.

 

[barryb]

Come on.
ADVFN is right.
No one in their right mind would trade thru a 2 year drawdown straight out of the starting blocks. Only if your equity balance was significantly up and still up would you possibly persevere.

And can you stop regurgitating your 'mentor'. Get him/her to post rather than chinese whisper what you think he told you.

Hello D70, Benj has not said much wrong, other than the thing i made him correct earlier. What most don't understand, is how severe and long the drawdowns can be, when trading robust statistically based methods. Of course, if it was easy, there'd be no one flipping burgers in McDonalds.

 

[neil]

This depends. If Paulson believed there would be a housing crash or a credit crunch coming, would he wait through two years in drawdown? Yes, why not. If the payoff will be big enough and if he still had full faith that he was right.

It really depends on the system. It seems likely that benji is talking about a low win rate, but high reward to risk strategy. His comments aren't true across all strategies.

Apart from the required psychology (missing from this discussion), the first Black Swan to come along will wipe him out.

 

[Pat494]

Apart from the required psychology (missing from this discussion), the first Black Swan to come along will wipe him out.

Ever had the drawdown getting worse and worse to the point of desperation you finally close and then it miraculously goes right back up. aaaaaaaaarh

 

[Shakone]

Apart from the required psychology (missing from this discussion), the first Black Swan to come along will wipe him out.

Who? Paulson or Benji? Some people are looking to profit from the Black Swan events.

 

[neil]

Who? Paulson or Benji? Some people are looking to profit from the Black Swan events.

I refer to Benji.

Who are looking to profit (in the future)?
Are they still looking or have they achieved their objective?
Links ?

 

[advfntrader]

yes happened a lot to me. WHY - because I RAN LOSSES.

that was the mistake, running losses will ONLY EVER result in a eventual wipeout

Ever had the drawdown getting worse and worse to the point of desperation you finally close and then it miraculously goes right back up. aaaaaaaaarh

 

[pak11273]

Well if you can hide your burgeoning account from the wife, the kids and in some countries the taxman - I say you probably qualify for 003.5 status, watch out James he's coming.
But if you are in to cars then it has to be a prancing horse !

This put me on the floor. Very funny!

 

[pak11273]

your mentor is right, I can see much more clearly now due to the turmoil I have been through in trading, you won't understand probably as you haven't been there yet...

just think about it from another viewpoint. you want to be a professional GAMBLER (Trader). no different to a professional poker player or a professional Blackjack player. NO DIFFERENT. that maybe extremely difficult for many to get their heads round but thats the facts.

you are risking money in the hope of making more money.

unless you have a proven edge then you are wasting your time

Journey of the prodigal:

gambler > trader > investor