my journal

This is a discussion on my journal within the Trading Journals forums, part of the Reception category; I am pretty satisfied as far as the server at my friend's as well. No bugs whatsoever. Just problems on ...

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Old Oct 16, 2009, 10:52pm   #281
 
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travis started this thread I am pretty satisfied as far as the server at my friend's as well. No bugs whatsoever. Just problems on RATs, that slow excel down.

Other than this, I just finished checking the whole week, and this will be my first red week out of 13 weeks so far in all my forward tests. I lost 2000 for the week (more than that on my actual traded systems, since I don't trade them all for lack of capital). I am pretty satisfied for my lack of intervention and lack of bugs in the new systems: I just added 13 of them this week, which overall made money, and that's good as well. The drawdown is just a regular event. Of course if it will last another week, I will be pretty sad: but still satisfied if I won't tamper and if there will be no bugs.

It is kind of funny. I lost a ****load of money but I am happy because the systems ran smoothly and without bugs (that couldn't be solved). It is indeed quite an achievement to implement 13 new automated systems and not incur any bugs (just one today, which I fixed in 10 seconds: a misplaced vba module address). So, congratulations to myself.
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Old Oct 17, 2009, 10:14am   #282
 
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travis started this thread Usual depressing weekend. Except this time I don't even have any systems to work on, because I consider my systems finished.

The dumb maid came (the intelligent one was busy with her mom) and took my electric toothbrush from the sink and placed in the battery recharger under the sink, but the wrong way. It didn't break. Then, after cleaning she placed the bucket and the mop under the sink, touching the toothbrush. As a consequence, I had to throw away the toothbrush head and today have to buy a new one. She didn't do it on purpose - she's just stupid. The only satisfaction I can get from this experience is to remember that she's a maid and I am an employee, and that maybe one day I'll make a living because there's stupid people like her who lose money in the market or give their money to investment banks which lose it in the market for them.

Do I have a happy life because of my intelligence and basically the efforts I make to use my brains? Not at all: maybe it's just the opposite. But maybe I'd be unhappier if I had to clean people's houses. On the other hand she doesn't look unhappy. I won't even tell her anything about this incident. Next time she comes, I'll bring my toothbrush to my room until she leaves. And my room is locked, because I won't allow anyone like that to get near my computer and other important things. In my life, I always make sure to stay away from stupid people (which just means "people who don't make the effort of using their brains"). Unfortunately I am not the one who hired the maid. My father did. So not only do I put up with her, but also I don't feel I have the right to tell her what to do. Besides, if I started speaking about what she should be doing and not doing, she'd hate me so much that she'd use my toothbrush to clean the toilet, so I better not speak, and let her think I appreciate her work. Besides it's the same with all stupid people: they are not going to understand they're doing something wrong. It's just best to avoid them. They are dangerous. Especially if they drive.

Regarding boredom. I am going to be pretty bored. I'll go buy these toothbrush heads. Actually from now on, to avoid accidents like this, I will keep my toothbrush in my room, with the recharger. Done.

I'll be pretty bored. I've taken care of some systems stuff. I reduced the trading to those systems with the lowest drawdown (this is not "tampering": anything done where you do not affect ongoing trades cannot be qualified as "tampering") and I limited trading to the most profitable days. This way my capital should slowly increase again. Anyway, the good thing, once again, is that I didn't tamper at all. It's as if I was handicapped and couldn't press the mouse button. I just cannot open nor close any trades out of my discretion. I can only watch my capital increase or decrease, helplessly. If I weren't helpless I would be harmful, so I'd rather be helpless.

Now I'll just have to deal with boredom. Boredom until I'll reach 50k, and then the bet will be won, and I can really start to relax. However, even then I won't be able to quit my job. But I'll feel very good. Right now I feel awful, having lost 5000 in the past 3 days. Only good thing is that I didn't touch anything and there were no bugs (that couldn't be fixed immediately).

Last edited by travis; Oct 17, 2009 at 10:40am.
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Old Oct 17, 2009, 10:39am   #283
 
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travis started this thread It may not seem a lot, but the knowledge that it's best not to tamper with your systems, and the ability to refrain from tampering, if acquired, means everything in my endeavor. Yes, I lost in the past 3 days because I didn't tamper, maybe so. But in the past two years, because of tampering, I made my profitable systems useless. All their profits wiped out by my tampering, and several accounts blown out. Now, thanks to some discipline, but most of all thanks to forward testing I've acquired the conviction that tampering is harmful and the habit to not do it. The habit is not a sure thing yet, but I'm getting there. All I know is that in July I was at 30k, and now I am at less than 10k, and yet the forward tests say the systems have made over 30k in this period. How is it possible? I should be at 60k. The answer is: tampering.

So today I'll be a good boy. I won't buy cigarettes, nor alcohol, or maybe just one beer or two, because I must have nothing forbidden and no unbreakable rules (except "no tampering"), or I'll break them immediately.

I'll be a good boy today and in the future, I'll try to. I won't get obsessed about doing anything specific. I'll be patient, and see what happens. I've done everything I had to do. Everything is as perfect as it can be. There's definitely enough systems. Sure I'd like to build more already. But until the opportunity will arise, I can definitely be satisfied and sit.

I'll go shopping, buy the toothbrush head (so expensive), buy some groceries, come home, watch tv, and I'll go to sleep early, as I've been doing lately (except yesterday, I guess because of frustration for the dumb maid ruining my toothbrush head).

I'll be relaxed and stable, because I have nothing to do really. I mean, everything is taken care of, and being restless and unsatisfied at this point can only hurt me: it may lead to discretionary trading. If I can stay off of it for another two months, I'll be healed and the non-tampering habit will be acquired. When I am low on capital, the urge to trade discretionary increases. I am aware of it. 5000 was a lot to lose. All because I let the CL trade, which has a big drawdown. Drawdown that didn't show in the past 3 months, but that potentially was there nonetheless.

All right. Let's go. I'll be peaceful and patient. For the next few weeks. Peaceful and patient. Peaceful and patient.

Last edited by travis; Oct 17, 2009 at 11:28am.
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Old Oct 17, 2009, 12:40pm   #284
 
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travis started this thread Ok, I went shopping. Bought milk, other things and the expensive braun oral-b toothbrush heads, for the dumbass maid. One day I'll miss her, too. Most likely only when she'll be very far from my sight (STAY AWAY FROM STUPID PEOPLE).

All in all I spent like 25 euros, because I ate some pizza as well.

I've realized, as I shopped and spent money, that I need one major new rule for my trading: no more withdrawing from my trading account. It was useful for a while to realize that that was real money and not monopoly money, and that's a taken now. But from now, I have to stop doing it, because my capital is so low that I will actually decrease it, or keep it still. And then when the drawdown happens, I will say goodbye to my capital. Also, this need to withdraw from my trading account will make me want to desperately increase it, and make me resume discretionary trading or I may trade systems like the CL with huge drawdowns in order to make my capital increase faster (it worked, too, but then the drawdown came and nearly killed me).

So I have taken the decision to stop withdrawing from my trading account. I will live from my salary, and the systems can take all the time they want to increase my capital. NO MORE rushing them. Withdrawing from trading account is good only as long as your capital is so big that you won't even notice, and that way you won't feel like rushing your system or rushing your capital to increase - and that in turn may cause discretionary trading, which in my case quickly takes the form of compulsive gambling.

Last edited by travis; Oct 17, 2009 at 12:52pm.
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Old Oct 17, 2009, 4:42pm   #285
 
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travis started this thread I am learning the value of capital at these times of extreme "poverty". It's good. I got myself into this mess. I mean: I did begin with no capital at all, but the fact that I am down to 10k from the 30k I was at, many times these past two years, is entirely my fault, so it's good that I am suffering because of it. It's time that I treat this thing as a serious job, rather than a monopoly game or a risk game. This is serious. The longer I screw around the longer I will have to work at the bank. It's all up to me what happens in the future.

I also have just realized that it's not enough that I just don't touch my systems. It's important that I don't use a reckless money management. I need to weigh as carefully as possible what systems I am letting trade (now that I can't let them all trade). I worked on some formulas that are now going to be final and will only let the most performing systems trade. Diversification is good, but it's best that I pick only the best systems and best trades and best days of the week now that I both have little capital and no rush at all to increase it (since I decided that I will not withdraw anymore from my trading account). No rush. Just trade on the best days, the best systems. I pick the best systems by calculating for each system the ratio of:
Code:
FTP / (drawdown + margin)

FTP: forward tested profit 
drawdown: highest between forward tested drawdown and back tested drawdown
margin: margin required
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Old Oct 17, 2009, 4:50pm   #286
Joined Jul 2009
Quote:
Originally Posted by travis View Post
I am learning the value of capital at these times of extreme "poverty". It's good. I got myself into this mess. I mean: I did begin with no capital at all, but the fact that I am down to 10k from the 30k I was at, many times these past two years, is entirely my fault, so it's good that I am suffering because of it. It's time that I treat this thing as a serious job, rather than a monopoly game or a risk game. This is serious. The longer I screw around the longer I will have to work at the bank. It's all up to me what happens in the future.

I also have just realized that it's not enough that I just don't touch my systems. It's important that I don't use a reckless money management. I need to weigh as carefully as possible what systems I am letting trade (now that I can't let them all trade). I worked on some formulas that are now going to be final and will only let the most performing systems trade. Diversification is good, but it's best that I pick only the best systems and best trades and best days of the week now that I both have little capital and no rush at all to increase it (since I decided that I will not withdraw anymore from my trading account). No rush. Just trade on the best days, the best systems. I pick the best systems by calculating for each system the ratio of:
Code:
FTP / (drawdown + margin)

FTP: forward tested profit 
drawdown: highest between forward tested drawdown and back tested drawdown
margin: margin required
you should do what a guy out of market wizards does, every time he has a consecutive loss, he cuts his risk/lot size by half, keeps it low during a drawdown. like for example if your system endures a 10% drawdown, cut risk by half, to 20%, cut half again...etc.

+ do the same thing when your systems are on a roll, of course you have to cap your lot size/risk per trade at some point
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Old Oct 17, 2009, 5:03pm   #287
 
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travis started this thread It sounds interesting, and I have heard it before, but before even considering it (and maybe that's good because it sounded too complicated and I wouldn't know how to go about testing such a method), I can see immediately a problem. The most I am trading on any future is one contract, and I can't divide that by half.

Another problem, of logic, I see in such a method - but maybe it's my logic that isn't good enough - is that I don't think that negative trades tend to stick together nor drawdown happens all at once. Sometimes it does, but not always, so it's not like I just say "oh, look there's a first of a series of negative trades, let's stop right here and wait until they end".

Also, I did test a method where systems were traded only if equity curve was above a given moving average and it didn't prove profitable. Where this method reduced trades by 20%, it also cut profits by 20%. Where it reduced trades by 50%, it also cut profits by 50%. It didn't seem to give me any edge. I either did it all wrong (possible), or the method doesn't work at all, or I have such good systems (in back-testing) that do not have drawdowns long enough to be avoided effectively. This is not to say that the method I am talking about is the same as the method you suggested. But it is somewhat related, at least vaguely. But then again, I am not good with formulas, so I may be talking nonsense. However, I am always making an effort, no matter what I am doing. I either do it properly, as perfectly as I can, or I don't even start doing it.
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