I Challenge U: Show me a profitable mechanical system. Minimum 20% return in a month.

[Gumping]

Coolt! kan du prata norska och svenska???

Jeg tale Dansk!

 

[Captain Currency]

Hello Ali,

Gamma may be correct, I may have thrown the studs in after the tackle on my last post, so a yellow card for me.

A quick question for you Ali: Why does it have to be an average of 20% return per month? Why not an average return of 20% per year?

Im not asking what you want the potential returns for or how you propose to spend your $'s, Just curious to why your looking for a 20% retun as apposed to another fig.


Kind Regards,

 

[0007]

Hello Ali,
..........
A quick question for you Ali: Why does it have to be an average of 20% return per month? Why not an average return of 20% per year?


Kind Regards,

IMHO that's a very realistic approach that Ali could achieve himself if he puts his mind to it. Better use of his £10k rather than donating it elsewhere. By the time he's cracked that he should be up and running and able to fly solo.

 

[TheBramble]

if any one consistently made 20% a month, within less than 5 years they would have the problem of having so much margin, as be unable to maintain 20% return due to potential liquidity problems.

therefore, there would be a threshold of margin that system could trade in order to make the 20%.

so, its also a money management restriction as well as an ability restriction as most think.

mind you, if the system is to be mechanical, it will never provide consistent results over time due to changing market cycles.

imo.

You're assuming a zero withdrawal from capital to fund a lavish lifestyle.

 

[TheBramble]

I don't see anything rude in the originators post.
and like he says 10k is a lot of money to some people I am sure a lot of people here would like to have that amount to trade with,
And what's wrong in asking for help which is effectively what he is doing.
so much for big traders who would scoff at what they might consider a small amount but maybe there might be some one who needs a backer and effectively that is what he is offering.
I expect the sort of constructive posts that one should be offering are something like "expect a more realistic return". Yes we can joke about it but the underlying issue is offering constructive criticism.
We have to get away from ridiculing people when they ask questions that we think are not worthy of traders time THIS IS WHAT LEADS NEW TRADERS IN THE ARMS OF THE SNAKE OIL SALESMEN AND CON ARTISTS.

Unless the originator's post has been edited since I read it (and I'm not about to read it again)
The responses he has received have, quite correctly in my view, focussed on the overtly freeloading sentiment expressed In his ‘pitch’.

Regardless of the sum involved, and even for a tyro, $10K is too little to get you into anything but trouble, he wasn’t asking for ‘help’ – he was asking someone to confirm they have a risk-free 20% per month minimum and manage his stake for absolutely no effort on his part whatsoever with the additional arrogance of suggesting his distinctly lightweight financial input would make him an ‘equal partner’.

If anyone on these boards ‘needs a backer’ they don’t have a minimum 20% per month, low-to-no risk system of their own – trust me – I’ve been both sides of this equation.

Realistic and constructive responses come from open and honest questions, not ploys worthy of the snakeoilers themselves.

All of Ali’s posts have been either attempts to get a free ride or get others to prove their credential to him. Ali has got off lightly in my view.

 

[0007]

All of Ali’s posts have been either attempts to get a free ride or get others to prove their credential to him. Ali has got off lightly in my view.

I'm inclined to agree with that but I do wonder if Ali really understands what he's asking.

 

[rols]

Here you go Ali!

Collective2 - The Trading System Authority

I think this is the best you're gonna get.....

....good luck in your quest for free money

let us know how you get on.

 

[Gumping]

You're assuming a zero withdrawal from capital to fund a lavish lifestyle.

Yeah - and not taking into account the fact that you are going to 'spend more time with your family'

 

[gamma]

Unless the originator's post has been edited since I read it (and I'm not about to read it again)
The responses he has received have, quite correctly in my view, focussed on the overtly freeloading sentiment expressed In his ‘pitch’.

Regardless of the sum involved, and even for a tyro, $10K is too little to get you into anything but trouble, he wasn’t asking for ‘help’ – he was asking someone to confirm they have a risk-free 20% per month minimum and manage his stake for absolutely no effort on his part whatsoever with the additional arrogance of suggesting his distinctly lightweight financial input would make him an ‘equal partner’.

If anyone on these boards ‘needs a backer’ they don’t have a minimum 20% per month, low-to-no risk system of their own – trust me – I’ve been both sides of this equation.

Realistic and constructive responses come from open and honest questions, not ploys worthy of the snakeoilers themselves.

All of Ali’s posts have been either attempts to get a free ride or get others to prove their credential to him. Ali has got off lightly in my view.

I see the point you are making Bramble, and yes the posts could be read as defiant and challenging and there probably are,none the less I for one want to look for good in someone who has joined our little community and maybe with a bit of tom foolery, jokes and serious input we could maybe get Ali to realise that some of his expectations are unrealistic.
I am glad he started the thread as it brings the whole issue of unrealistic returns out into the open.
A lot of new traders blow their accounts for this very reason, by having this debate we bring out an issue inthe open that should be very beneficial to a lot of traders.

 

[Hoggums]

Agree,

Too many newcomers see Sb'ing and trading in general as a get rich quick scheme.

Sad fact is - yes it can make you rich - but forget the "quick" part of it. In order to cope with losers as well as winners you need to keep your trading size down - otherwise you'll wipe out sooner or later.

 

[Captain Currency]

Performance Expectations

I thought this was an excellent, well written, honest article regarding Performance Expectations. Perhaps Ali might like to read it. It is taken from the MACROTACTICS site and I hope the author doesnt mind me sharing his good work.

Performance Expectations

"If you hang out in trading forums for long enough, you start to get a handle on how unrealistic trader’s performance expectations actually are. For example, it is not uncommon to hear stories of new traders who are hoping to use their tiny trading account and replace their day job. For example, assuming you earned 50 thousand dollars a year as a wage slave and you had a trading account of 10 thousand dollars, then you are expecting 500% return on investment to be able to support your dream of “financial freedom”.

Many of the “old hands” in the forum immediately respond to the beginners on the forums and caution the neophyte trader that expecting 500% return in a year is too high and they are highly likely to blow up their account in their race to achieve it. They then proceed to tell them that if they can just consistently earn a mere 6% a month, they can make a more attainable 100% return on their investment in a year. It is at this point, the neophyte trader realizes that even if they could achieve this, financial freedom is not achievable with a $10,000 account and they start saving up for a bigger stake, believing that with a $50,000 account they can replace their job.

At some stage, the beginner will start reading classic trading books, like Alexander Elder’s “Come into my Trading Room”, and it as they stage they begin to sense that even this goal is too ambitious. Alexander advises his reader that a really experienced trader does not expect to make more than a 30% return in a year. And if it is a really bad year, then they can hope to break even at best. When a new trader reads that, their heart drops as they realize that perhaps short of having a 150K to 300K in the bank they will never attain the elusive state of financial freedom.

The question that beckons, is even this realistic? How much does a Professional Currency trader really return in a year?

The Benchmark
Barclay’s provide an index that can answer exactly that question. The “Barclay’s Currency Trader’s Index” is an equal weighted composite of managed programs that trade currency futures and/or cash forwards in the inter-bank market. In 2008 there were 145 currency programs included in the index.

Okay – are you ready for it? The average annualized return of funds participating in the index is, wait for it, drum roll …. 10.12%

What …………………….. 10.12% …………….. Noooooooooooooooo …….

Your mind is probably spinning at the moment as you swallow this bitter pill.

The bitter pill is going to taste even worse once you realize that the benchmark tracks the performance professional traders. Each of these traders probably have a university degree in finance, passed their CTA exams and have many years of experience under their belt. They also have access to other knowledgeable traders, teams of experienced analysts and are supported by independent risk managers. In contrast to a beginner on a forum, this is like comparing someone who has been playing golf for a few months to a professional golfer with years of experience on the circuit. There is just a world of difference.

Beating the Benchmark
Ok, so you are probably asking yourself how is that some traders on the forums are able to claim astounding returns, some with more than a 1000% in a month? Or how guys who win trading competitions return 1000% in a year. Or how some of these supposed “old hands” are pulling in a 100% a year. Or how Alexander Elder even pulls in a mere 30% a year.

Well, if we exclude the traders that are lying about their performance, there are a number of factors at play.

The first factor clearly is knowledge. If you look very carefully at the postings of individuals producing abnormal returns, you realize that these guys are not your garden-variety retail trader. The nuances behind some of the things in their postings indicate a degree of knowledge equal to that of a professional trader. This goes beyond just arguing about what is the best indicator. Much of their ability comes from an intuition built up by trading a range of markets for a number of years.

The second factor is leverage. Most of the funds in the Barclay’s index are trading with a 1:1, 2:1 or at most 4:1 leverage. The guys who pull in the big wins in the forums or the competitions are trading using 10:1, 50:1 or in some cases 200:1 leverage.

The third factor is trading the right system for the market conditions. If the system is right for the market conditions, then it has a good chance of producing the winning trades.

The last factor is luck. An experienced trader, using ridiculous amounts of leverage and the right system for the market, if they are lucky, can get a string of winning trades and produce the stratospheric results that our beginner initially dreamed of. However, with a bit of bad luck and a string of losses, there is a good chance that they will blow their account or at least put a serious dent in it.

Trying to beat the benchmark does nothing more than increase the volatility of returns. This is no different from a pro golfer adjusting their golfing style to be more aggressive, avoiding the safe shots and playing for the hole in ones. There is a chance they will win the tournament by a good margin, but there is a huge risk of coming last by an embarrassingly huge margin.

Traders who are trying to win competitions and get the 1000% returns are highly likely to send their account up in flames, but there is a chance they might win big as well. Similarly, I don’t doubt that a number of the old hand retail traders hit their 100% annual return targets, but all too often you hear of the story of the “old hand” trader blowing up three quarters their account and they are left licking their wounds. Lastly, the guys who are aiming for the 30% a year hit their target quite frequently, but there are enough of Alexander Elder’s students who have lost a third of their account or more, to know that their trading results are far from perfect.

If you wondering why the funds are only pulling in 10% a year, whereas the traders on the forums are doing 30 to 100% a year, it has everything to do with independent risk management. The risk manager’s role is to stop their clients from loosing great wads of cash as an overly ambitious trader tries to reach for the stars like the traders on the forums".

 

[0007]

I thought this was an excellent, well written, honest article regarding Performance Expectations. Perhaps Ali might like to read it. It is taken from the MACROTACTICS site and I hope the author doesnt mind me sharing his good work.

Captain C,

Thanks for that, really interesting and a good link to more also. Hope Ali agrees.

 

[TheBramble]

I see the point you are making Bramble, and yes the posts could be read as defiant and challenging and there probably are,none the less I for one want to look for good in someone who has joined our little community and maybe with a bit of tom foolery, jokes and serious input we could maybe get Ali to realise that some of his expectations are unrealistic.
I am glad he started the thread as it brings the whole issue of unrealistic returns out into the open.
A lot of new traders blow their accounts for this very reason, by having this debate we bring out an issue inthe open that should be very beneficial to a lot of traders.

I appreciate your good intent gamma. It isn't that those sorts of returns are unrealistic per se, but Ali's expectations of being able to buy into that sort of performance just because he wants to. That's the unrealistic bit.

You're also correct in suggesting there is a need to have newer traders constantly assess their expectations carefully and realistically and although a laudable topic, doesn't belong in this thread where the originating poster's intent is quite different.

 

[trendie]

I have just been skimming through wasps journal.

although he has moved on, in the sense of being a no indicators player, his legacy of his MA-derived method remains.
he seemed to be able to capture a good few pips, trading between 7-am to 3:30pm. (until 8pm under certain circumstances)

hasnt wasp shown, through his journal, that if about 150-200 pips per week was attainablle (even if you count 100 pips to be conservative), that he can generate whatever ali is asking?
the proof of a viable system is in his screenshots.

(as an aside, there have been a couple of threads asking whether 20 pips a day was viable; wasps journal again seems to suggest it is.)

how it would translate into percentage increase on capital would be up to the thread-starter to assess.

 

[gamma]

I'm inclined to agree with that but I do wonder if Ali really understands what he's asking.

That is what I believe I don't think Ali meant to come off the way people have interpreted his post.
Heeidepeg (not sure of spelling) was openly rude and obnoxious.
Perhaps Ali should tell us what he's seeking!

 

[ali4rmlondon]

Guys,
My first post is really quite naive. What I wrote isnt what I intended you to understand. Im looking for someone who is a successful trader, who I can work along, in a partnership and build a business together. i certainly didnt mean to offend anyone. 20% per month is not a fixed amount, a sum that will attract most of my potential investors is fine with the risk associated with trading. I understand very well all your posts. This is my proposal. Please pm if you wish to work with me.

I actually know a company that gives return of max 15% every month on investments over £2k. I want to build something similar with your help.

Regards
Ali.

Ali,

On the face of it, what you ask is reasonable but if you do the sums it appears less so. Sure, you can get a system that in the right hands can make 20% per month. But 20% of what? And are we talking compound ? As the sums get bigger you're probably going to be trading on margin - so you'd better be good at handling risk.

Start with £1k in your account and make 20% per month compound - not unheard of. At end of year 1 you will have £7,430 and made an increase of £1,238 in month 12. So far so good.

Carry on with even more skill and success (it gets harder as you go on) and at end of year 3 you will have £590,668 and made an increase of £98,445 in month 36. It's now got difficult because even if you traded 4 times each trading day in the last month, you have to have made £1,118 per trade. Also, don't forget your losing trades - and their psychological effect: the sums could be quite large.

I've no doubt it can be done, but probably not by Mr Average. You're up against the power of compounding and the difficulties of trading large amounts.

Talking % can be misleading - Why not look at your challenge in a different way. Making 20% per month on relatively small amounts is quite realistic, so why not decide how much regular profit /income you'd like to get. Once you've got your £1k to £10k at the end of month 14, just settle for a regular £2k per month? Even doing this would require 1 trade making £97 every trading day - certainly stop you getting bored.

You could "force multiply" your results by having several accounts all doing the same thing. But you're gonna be a very busy boy. What about holidays / leisure / distractions etc? No one can work at this pace continuously - well, at least not me anyway.

In summary, your simple question doesn't have a simple answer (they very rarely do) and as many people have already pointed out: anyone who's cracked it doesn't need or want your £10k.

You did remark in another post: "I think the real issue is people here are not that successful." What's success? In purely financial terms you need to define what you mean. I subscribe to the theory that most (ie 80% of people) can make money in the markets (not saying how much!)if they learn and apply the basics in a disciplined way.

But there's more to life than a string of telephone numbers in your bank account. I get most satisfaction from trading "successfully" just like anyone else who hones their skills and sees improvement. Millionaires (and I'm not one, yet) can only eat 3 meals a day and wear one suit at a time, so why do they carry on making money? - very often it's because they enjoy what they do. This, I think, is how it's nice to be with trading - making enough dosh for your needs but enjoying the process. Even if you did find someone to meet the spec in your original post, how long would it be before you got bored - bit like painting by numbers?

I see in a later post that actually, you want to do this as a business partnership and be able to introduce funds. Nothing wrong with that but isn't your proposal what fund managers do? Ask yourself: how many of them make 20% per month?

These are late-night ramblings so apologies if a bit off topic - but your post has generated some interesting replies and made me have a little think.

PS if you do crack it, I'll give you £10k for the guaranteed system.

 

[ali4rmlondon]

Im not after a free ride etc. Maybe you have realised your posts are not contructive, but too ignorant to change.

Unless the originator's post has been edited since I read it (and I'm not about to read it again)
The responses he has received have, quite correctly in my view, focussed on the overtly freeloading sentiment expressed In his ‘pitch’.

Regardless of the sum involved, and even for a tyro, $10K is too little to get you into anything but trouble, he wasn’t asking for ‘help’ – he was asking someone to confirm they have a risk-free 20% per month minimum and manage his stake for absolutely no effort on his part whatsoever with the additional arrogance of suggesting his distinctly lightweight financial input would make him an ‘equal partner’.

If anyone on these boards ‘needs a backer’ they don’t have a minimum 20% per month, low-to-no risk system of their own – trust me – I’ve been both sides of this equation.

Realistic and constructive responses come from open and honest questions, not ploys worthy of the snakeoilers themselves.

All of Ali’s posts have been either attempts to get a free ride or get others to prove their credential to him. Ali has got off lightly in my view.

 

[luckyd1976]

I actually know a company that gives return of max 15% every month on investments over £2k. I want to build something similar with your help.

Ali,

For those of us have been around the Inet trading forum world, We see this all the time. "I double dog dare ya! Prove it!" and "My % returns are bigger than yours"

If I've got this straight in my head.
You want a silent trading partner. Someone to show you and do all the trading (at least til you're up to speed) Meanwhile you'll market and recruit new money to your cause.

How do you plan on handling the below questions I have for your dubious task?

1. Legal Structure
2. Funds Transfer
3. Taxes
4. Control of Accounts
5. Profit sharing
6. Overall Size of the account

 

[luckyd1976]

Im not after a free ride etc. Maybe you have realised your posts are not contructive, but too ignorant to change.

FOR A POSTER THAT DEMANDS CONSTRUCTIVITY, U SURE INSULT ALOT!

 

[trendie]

$10k is just the initial investment, then i can get you more. I can attract funds from others. Its not a one off offer. I think the real issue is people here are not that successful. I challenge you to prove me wrong.

Guys,
My first post is really quite naive. What I wrote isnt what I intended you to understand. Im looking for someone who is a successful trader, who I can work along, in a partnership and build a business together. i certainly didnt mean to offend anyone. 20% per month is not a fixed amount, a sum that will attract most of my potential investors is fine with the risk associated with trading. I understand very well all your posts. This is my proposal. Please pm if you wish to work with me.

I actually know a company that gives return of max 15% every month on investments over £2k. I want to build something similar with your help.

Regards
Ali.

stranger and stranger.
I understand now your requirements; its for a business partnership.
If I understand correctly, you may even provide more than £10K, possibly by encouraging others to invest.
so, you generate funds, and you want someone to trade well enough, so that the investors get, say, 3% per month, (telling them that 30%+ PER ANNUM is VERY good), and split the difference between yourself and the trader?

unfortunately, you are going to be the weak-hand in all this.
a: you are relying on someone else to generate the revenue. the trader may demand more than a 50/50 split. say, 80/20 in the traders favour.
b:the trading system will be the traders intellectual property.
c: I seriously doubt the trader will impart the rules so easily to anyone
d: no matter what kind of partnership you aspire to, the trader will be savvy enough not to tie himself down to a restrictive deal.

at any time, the trader will be the crucial component, and if he falls ill, or gets run over by a bus, how will you cope?

if even you get someone, sooner or later the revenue from investors will simply accelerate the point at which the trader has enough of his own money to one day send you a postcard from the Bahamas with the legend "I resign".

one of the points of being a trader is to get away from office politics and bosses.
the market is my boss, and she's enough of a bitch at times to deal with.

hope you had a good trading week, and have an enjoyable weekend.

PS: You may get some PMs asking which company gives its investors 15% a month. Hope this thread wasnt a long-winded spiel just to mention this company. (that hasnt been bought out by Morgan Grenfell or Goldman Sachs already)