In this instance it's impossible to ignore drawdowns. Finding out your tolerance for drawdowns will ultimately lead you to your annual % figure. At the start of this year i was trading 2% per trade, which brought high returns but an equally large drawdown lasting approx 3 months (in the region of 63%, gains matched this figure and exceeded it). With each new equity high i've reduced my risk by 0.25% per trade in order to limit the severity of the drawdowns while aggressively build my capital (2% is pretty weighty for a lot of trend methods...10% per trade idiots on this site kindly look elsewhere for literary stimulation). The trade off is smaller returns, but pyschologically less stressful. However saying that, i'm sure most would consider my current drawdown of 51% since July too much to stomach, but then my compounded gains and unrealised profits make the medicine a lot easer to take.
In this instance it's impossible to ignore drawdowns. Finding out your tolerance for drawdowns will ultimately lead you to your annual % figure. At the start of this year i was trading 2% per trade, which brought high returns but an equally large drawdown lasting approx 3 months (in the region of 63%, gains matched this figure and exceeded it). With each new equity high i've reduced my risk by 0.25% per trade in order to limit the severity of the drawdowns while aggressively build my capital (2% is pretty weighty for a lot of trend methods...10% per trade idiots on this site kindly look elsewhere for literary stimulation). The trade off is smaller returns, but pyschologically less stressful. However saying that, i'm sure most would consider my current drawdown of 51% since July too much to stomach, but then my compounded gains and unrealised profits make the medicine a lot easer to take.
Totally agree. So many potential traders just don't get it. After all when there are so many 100% winning systems advertised who needs drawdowns......
So,
There's an Englishman, and Irishman and a Scotsman, all working undercover in Iran as computer technicians. Their cover is that they are responsible for the smooth running of the software that controls the nuclear enrichment program that Iran is running (in contradiction with the UN resolution, hence their being there).
As you may have read, an issue has arisen in the operation of this process - it turns out that the company Siemens has a monopoly on nuclear enrichments technology, and the Israelis have managed to upload a Siemens specific application onto the Iranian hardware that renders their enrichment program useless...
... Needless to say, our anglo-saxon trio are brought in for questioning...
Iranian: Gentlemen you are doomed. Your country has sent you here without the cover of diplomacy, and are denying all knowledge of your placement. We will not encourage our enemies upon us by making you a martyr, instead we will keep you alive, in captivity, ad infinitum. You can have one luxury item - what will it be, Englishman?
Englishman: I would like the works of Shakespeare - an Englishman that every Englishman aspires too, his catalogue of genius will keep me engaged until the end of eternity
Iranian: Very well, you shall have it. What say you, Scotsman - what will you choose as your luxury item to keep you sane for the rest of your living years?
Scotsman: Aye, I ask for nothing more than a set of cannie bagpipes; with these I shall commit my soul to sound, and my countrymen will hear my call and rally upon thee like the wind upon the highlands, That shall secure my safe passage to my homeland
Iranian: So be it, your request is granted. Lastly, what for you, Irishman?
Irishman: Weh, me? Oh, I'll have a box of tampax, thanks.
Iranian: Enough of your intolerant jokes! What possible use can a man held in captivity have for a box of tampax?
Irishman: Well, I've been listening to these other two fellas, but I think they've missed a trick. Just read the box on these tampax... it says I can go swimming, sailing, play tennis, go to the cinema, eat out in restaurants....
http://www.youtube.com/watch?v=VcjqZ54dxd4&feature=related
There's an Englishman, and Irishman and a Scotsman, all working undercover in Iran as computer technicians. Their cover is that they are responsible for the smooth running of the software that controls the nuclear enrichment program that Iran is running (in contradiction with the UN resolution, hence their being there).
As you may have read, an issue has arisen in the operation of this process - it turns out that the company Siemens has a monopoly on nuclear enrichments technology, and the Israelis have managed to upload a Siemens specific application onto the Iranian hardware that renders their enrichment program useless...
... Needless to say, our anglo-saxon trio are brought in for questioning...
Iranian: Gentlemen you are doomed. Your country has sent you here without the cover of diplomacy, and are denying all knowledge of your placement. We will not encourage our enemies upon us by making you a martyr, instead we will keep you alive, in captivity, ad infinitum. You can have one luxury item - what will it be, Englishman?
Englishman: I would like the works of Shakespeare - an Englishman that every Englishman aspires too, his catalogue of genius will keep me engaged until the end of eternity
Iranian: Very well, you shall have it. What say you, Scotsman - what will you choose as your luxury item to keep you sane for the rest of your living years?
Scotsman: Aye, I ask for nothing more than a set of cannie bagpipes; with these I shall commit my soul to sound, and my countrymen will hear my call and rally upon thee like the wind upon the highlands, That shall secure my safe passage to my homeland
Iranian: So be it, your request is granted. Lastly, what for you, Irishman?
Irishman: Weh, me? Oh, I'll have a box of tampax, thanks.
Iranian: Enough of your intolerant jokes! What possible use can a man held in captivity have for a box of tampax?
Irishman: Well, I've been listening to these other two fellas, but I think they've missed a trick. Just read the box on these tampax... it says I can go swimming, sailing, play tennis, go to the cinema, eat out in restaurants....
http://www.youtube.com/watch?v=VcjqZ54dxd4&feature=related
That's right, and when everyone wants to be right all of the time, is it any wonder they end up buying from the alchemists and con artists who make these ridiculous claims of 100% a month.
Also, if people realised that consistent, profitable trading is an emotional and psychological grind, where you'll experience (depending on your method) weeks/months of losses before you hit a good patch again, they probably wouldn't want to do it anyway, let alone be able to.
And by the way, the holy grail of guaranteed profits does exist....it's called being a broker.
B
Black Swan
Not sure if you had your tongue in cheek re DT but I couldn't disagree more...Ahha!! I geddit, you now want this thread to combust...:smart:
L
Liquid validity
Re: How Much Can I Make?
Well my flippant unintelligent input would be:
I don't know, how much can you make?
If you don't know, maybe the question should be: how much can you lose...:idea:
Not directed at OP BTW, just my generalistic thoughts to these types of questions
Well my flippant unintelligent input would be:
I don't know, how much can you make?
If you don't know, maybe the question should be: how much can you lose...:idea:
Not directed at OP BTW, just my generalistic thoughts to these types of questions
meanreversion
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Bloody hell you have enormous testes. 63% is a lot. If I doubled my risk I'd probably see that kind of drawdown but I'd struggle to cope.. alcohol consumption would probably double as well!
Yes, the alcohol certainly flows a bit more freely during those times. I can't say i enjoy large drawdowns, but i am used to them. However, i am looking to moderate them somewhat, but i still expect to have 40/45% drawdowns during difficult periods once i reach my desired % risk per trade.
For newer traders though looking to trade a trend following method, my advice would be to start very small and focus on the execution. Once you're consistent on that over a number of months, then you can look to increase your size.
meanreversion
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This thread gets my vote for the most sensible, and therefore the dullest, thread of October.
meanreversion
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You make the erroneous assumption that there are any "newbies" reading this thread.
Check this link, I never knew much about this chap before
http://www.dailymail.co.uk/news/art...s-Hunt-slept-33-BA-air-stewardesses-race.html
Interesting read. Excessive in every sense of the word.
meanreversion
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Obviously not a saint by any means, but you can't fault his lust for life.
Careful, this is in danger of turning into an interesting thread.
