How to make 100%

[leonarda]

Percentage is based on returns by comparison to the equity in your account, and that is the way my returns will always be represented.

that's fine, just so we know when comparing to our own returns since your title does say "How to make 100%". Based on your method I think my current YTD % is about 200% now then, as I probably should have half the money in some cash account.

 

[meanreversion]

Yup, I did 100% in May come to think of it, using this accounting method.

(4x, did you ever work for Enron/WorldCom/Arthur Andersen?)

 

[Black Swan]

Fair play. The risk tolorant has been picked up on and 4x has made his position clear. Maybe now we should let 4x get on with his thread at his own pace and order.

Maybe his risk tolerance will not be for you. Maybe you will want to use stops, maybe you will not want to incorporate use/adapt any of his methods.

On the other hand you may pick up some nuggets like how to use Ichimoku clouds.

Lets move on.

Good lad Jason, you tell 'em..

 

[4xpipcounter]

It would be nice if we could knock off the misrepresentations. This is not something I like to take a lot of time with.

Read everyone of my posts, and you will never read I wiped out my account once since the very early part of 2005.

Also, the replenishment in 2009 was never a factor. The trade turned in my favor as soon as the money was deposited.

Now, let's make it clear. gains divided my equity is the % of gains. I hope we don't cross that bridge anymore. That's the way all accounting systems are, and I think you know it.

So basically your account occasionally gets wiped (although it's only a small part of your overall trading pot), and after this event, you simply replenish it?

Hmm, it's fairly clear where you get your large percentage numbers from

 

[4xpipcounter]

Why don't we chill until you answer my earlier question.

Is it the case that you have (e.g.) $10k with your broker (out of a $100k trading pot), and if you make $5k you represent this as a 50% gain, when in fact it is a 5% gain?

 

[meanreversion]

Ok, so using the usual accounting rules, you risk up to 20% of your entire account on one trade. In fact, you could take up to 3 positions at one time, risking over half of your account.

Are you insane?

 

[4xpipcounter]

Rossini, my methodology and the mathematics in my favorite part. All the questions concerning the mm has come up, so I figure we might as well air it all out before we progess further.

The latter point makes sense to me too, but I prefer my way (No obsinence intended.). The last time my backup was an issue was 2009.

I am completely open minded, make no mistake about that.

But answer me this: From what I can gather from your posts you must at all times have the value of your trading account in cash ready to put into your trading account if you need it.

I'm much more interested in your methodology than all the MM stuff, but cant you see that if you must have the value of your trading account waiting in cast this effectively halves your gains....

Or to put it another way, why not just have double in your account to begin with and trade the same size...

Makes no sense to me??

 

[oildaytrader]

Ok, so using the usual accounting rules, you risk up to 20% of your entire account on one trade. In fact, you could take up to 3 positions at one time, risking over half of your account.

Are you insane?

No.The rest of the market participants are crazy .

 

[barryb]

What does 4pip and the average small business after 2007 have in common?

They've both lost a lot of credit!

 

[meanreversion]

Oh well, all I can say is if I suddenly lost 70% of my entire trading account, my wife would cut my testicles off. I guess 4x's missus is a bit more understanding.

 

[meanreversion]

No.The rest of the market participants are crazy .

Usual horsesh1t ODDT.

In one of your profound signature comments, you claim

'Fighting the mad herd costs mental wealth as well as money.'

So what is it to be, trade with the other market participants or against them?

 

[4xpipcounter]

John, the incident that has become such an issue is the GBP/CHF deal from last month. That is an exception to the rule. I hardly ever have a trade back up on me 2 whole legs. Having confidence in my methodology would be contradictory if the thing that became an issue was the rule. If all trades ended like the GBP/CHF ordeal, and even though it won very nicely for me, I still would not be in an open forum going Broadway with it. I would be behind the scenes addressing more important issues if that were the case.

You made what I feel is an excellent case-in-point. This will be pointed out later in my nuggets, but a "hold 'til they come good" methodology does not work. I was talking with someone the other day. His thought was jump in a trade and just hold it until there are gains. Not a good idea!. That kind of strategy, in and of itself, leads to bankruptcy. Others have made vaild points, that someday, one wrong push of the mouse is going to lead to disaster. That is so true. This is why a proper methodology needs to be tested and back by the entry and exit. So my methodology is not a "hold 'til they come good" methodology, and I promise, that is coming in later posts.

4pip

Forgive me for not being entirely au fait with your methodology, but there's one thing I've never quite understood about these "hold 'til they come good" strategies. Forgive me again if that's not quite describing your strategy.

I presume that your method gives you an indication of whether you should trade long or short - let's assume long.

So you enter long and the trade goes against you, which is all well and good while your method continues to tell you that long is the place to be. However, with the sort of drawdowns you are talking about, it surely can't be long before your method starts telling you that you should be short - and the more sensitive your method the quicker that point will arrive. So, by hanging on to the long trade, you find yourself in a position that you must ignore your method - in which you have great confidence - which seems contradictory.

Is this a scenario that arises?

cheers

jon

 

[4xpipcounter]

Don't need to. I work for me. I make better money that way.

Yup, I did 100% in May come to think of it, using this accounting method.

(4x, did you ever work for Enron/WorldCom/Arthur Andersen?)

 

[4xpipcounter]

You're late. He already did.

Good lad Jason, you tell 'em..

 

[oildaytrader]

Usual horsesh1t ODDT.

In one of your profound signature comments, you claim

'Fighting the mad herd costs mental wealth as well as money.'

So what is it to be, trade with the other market participants or against them?

Always trade against them when they are crazy, mad and insane, but trade with them when they are correct.

 

[4xpipcounter]

I've been accused of that before, but I do make lots of money.... oh yeah, and pips.

I think I already went into great detail about all this.

It does take time and writing to cover the same ground. I don't mind being hammered, questioned, and deluged by skepticism. But, I do not want to keep covering the same ground.

Ok, so using the usual accounting rules, you risk up to 20% of your entire account on one trade. In fact, you could take up to 3 positions at one time, risking over half of your account.

Are you insane?

 

[4xpipcounter]

I guess all the MM questions are covered, so that being the case, I can start preparing for the next nugget.

BTW, you guys can believe me or believe Meanreversion. If you want to believe I lost 70% of my account, and lost everything at other intervals, then go ahead. If you want to believe my end of it (I know me better than he knows me.) that the last time I bankrupted a personal account was in 2006, and I never had 1 70% losing trade, then go ahead. I prefer to deal with nothing but facts and not a bunch of useless rhetoric.

OTT, great comment and questions. Yes, I'm still having a wonderful time.

 

[meanreversion]

Apologies if I got my facts mixed up.. someone earlier on this thread pointed out a 60% drawdown on your trading, to which you replied it was actually 70%. I must have mis-read it.

 

[meanreversion]

To be fair 4xpip, you did have a 60%+ drawdown on your positions on your other thread. So it is quite risky. (Shakone)

BTW, if it is the GBP/CHF holdings I had from a few weeks ago you are referring to, they were down closer to 70%. I need to set the record straight, ya know. (4xpipcounter)

Ok, I thought that meant that .. well, nevermind, I clearly didn't understand it correctly.

 

[4xpipcounter]

You didn't misread it, but this is your comment, "if I suddenly lost 70% of my entire trading account...." I didn't lose 70%. I had a drawdown of 70%. There is a big difference. Also, you forgot to announce it was a winner for 28%. You also forgot to go into detail in your grand announcment to everyone about the reason I have equi-liquidity stored for emergencies.

If I'm wrong, I'm going to admit it. I have no problem with that. My desire is still to become an even better trader. My desire is also to pave the way to nice gains in accounts, considering all the mush we have read on this site.

Let me clear the air on something else. If I ever have to use my backup, I will announce it in the spirit of fair reporting, considering the implications involved with this thread. I know that in adding extra funds it would have a way of tainting the true gains. Okay? Now, how is that for fairness?

Apologies if I got my facts mixed up.. someone earlier on this thread pointed out a 60% drawdown on your trading, to which you replied it was actually 70%. I must have mis-read it.