robster970
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@Shakone to the rep comment:
Why Top Retail traders V Commercial Traders
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L
Liquid validity
Why do you ask?
Didn't she put a reason on the restraining order then?
long live teh lulz
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robster970
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Why do you ask?
Didn't she put a reason on the restraining order then?
long live teh lulz
No she just put this picture on it
robster970
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Here is Kelly Brook explaining the merits of using Sortino Ratio. As you can see, her downside is completely covered whilst her upside is still measurable.
random12345
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Why do you constantly say this to me? Are you implying your week will be better than mine in absolute returns terms or something? Are you seeing your weekly bit on the side or...? We play in different money leagues so I don't get this otherwise. Say hi to loose Cheryl for me.
To confirm, I dislike many more things than this, sorry. He got me. I gave a comprehensive list of the morally dubious things I had witnessed during my tenure in accountancy vs banking, but I don't entirely hate accountants since my old man is one. Banking receives very little judicial sympathy for going astray while professional services at the higher levels simply mock the letter of the law, which is never on trial except by inert Parliamentary review. Being a top corporate type, fxmo will have seen this in action.
Though I'm sure you could do a reasonable job of describing the differences between an apple and an orange, I doubt you could explain why the Sharpe does not apply to retail accounts as an excellent tool for measuring volatility of returns. Thank god we never got into the Calmar etc.
random12345
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random12345
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In summary, hopefully nobody has been spun from the issue that Shakone and I had - BOTH of us have said in his main thread that we don't care if he makes profit or not using FXtrek's variant of LR (aka Kelpie variant), this is a matter of record. I have also said numerous times I don't believe he is a vendor.
Couldn't give a damn.
However, look at the topic of this post. He should not veer outside his thread posting about levels etc and supposed scalps if he does not know what he is talking about. He is a false authority on the issue of retail v commercial and represents only vague knowledge of either. Again, his own trading methodology is of very little interest to me. It is when he enters other threads with this type of stuff that is bothersome. Nobody can talk about the failures of the commercial world, if they don't even partially understand one of their most basic metrics for risk even despite in depth explanation.
It is plain to see he has some bizarre ego issue where as soon as an argument is lost or waning, he seeks desperately to change the question instead. He should not have posted a thread where he claims to know the differences between retail and commercial traders because newbies might actually believe he does know and that is the issue I have.
You can also see that the true commercial traders on these boards dismissed his version of how the trading world works early on because they are smart enough not to get into 20 odd pages of BS.
Couldn't give a damn.
However, look at the topic of this post. He should not veer outside his thread posting about levels etc and supposed scalps if he does not know what he is talking about. He is a false authority on the issue of retail v commercial and represents only vague knowledge of either. Again, his own trading methodology is of very little interest to me. It is when he enters other threads with this type of stuff that is bothersome. Nobody can talk about the failures of the commercial world, if they don't even partially understand one of their most basic metrics for risk even despite in depth explanation.
It is plain to see he has some bizarre ego issue where as soon as an argument is lost or waning, he seeks desperately to change the question instead. He should not have posted a thread where he claims to know the differences between retail and commercial traders because newbies might actually believe he does know and that is the issue I have.
You can also see that the true commercial traders on these boards dismissed his version of how the trading world works early on because they are smart enough not to get into 20 odd pages of BS.
Forexmospherian
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Hi Robster
I appreciate both Random and Shakone are intelligent serious individuals and therefore would not argue with your comments on their credibility.
However i remember not long after the turn of the millennium being advised personally by some very credible people with backgrounds from companies like KPMG and Baker Mckenzie law firm on Investments abroad . One of the banks involved in the US had a 150 yr old history and was top rated etc.
It went bust in 2008/9. ( Lehman bros)
I think i will start by saying that I do know the strengths and weaknesses of this ratio - and after training originally as an accountant after spending 3 yrs studying Statistics with my Economics Degree - I am quite good with maths and calculations.
The problem is that this happened over 35 yrs ago - 12 yrs after the Sharpe ratio came into existence - and so really we are both fairly ancient nowadays and the world as moved in leaps and bounds since then.
I suggest most traders read this link -
http://www.sharperatio.net/Sharpe-Ratio-Strengths-and-Weakness.htm
The ratio was designed for comparing long term stock investments with the idea that it was fairly simple and had "one size fits all" qualities - but - although it is essential to consider fund returns in the context of fund risks, the Sharpe ratio is a bit of a blunt instrument to measure risk-adjusted returns.
It is fine on currency investments based on last three of five years results - but can only be used properly along with other financial measures along with understanding the context of the fund.
Trading is not a pure science and therefore you cannot extrapolate and compare stock or bond or forex trading in exactly the same manner.
You need to know the whole picture - and the Sharpe ratio can be really skewed by maths anomolies - this link explains some general ones -
http://akorra.com/2011/11/26/top-10-fascinating-mathmatics-anomalies/
Now in my particular case i do not compound and now have no long term aspirations to take $1000 to $10 million in 5 or even 10 years - and feel fairly sure i don't think i would be able to achieve it.
However to achieve 30 -50% returns on retail size trading accounts on a monthly basis - nearly ad infinitum is possible - especially with different size monthly capital amounts and difference size risks
In my particular case - my forex capital on my main account for the last two years as been between approxc £34 k and £62k - nearly double - due to the fact i withdraw monies on a regular basis according to the month and my time available - and my own requirements.
So one month I might have been trading less than 1% on £39K start and then in another month my start was £59k and then half way through I withdraw profits and also reduce back down to £41k. The Capital account is therefore not growing continually and one month 50% of the capital might represent £20k - whilst another month - £22k represents only 33% of the capital account total amount.
The goal posts are moving in my account - it is not a pure investment and I don't even use the Sharpe ratio in my own calculations,
i also don't trade 240+ days a year - we are not comparing like for like - for me - draw down % - win ratios - average trade RR's - % risk per trade etc etc give a fuller picture rather than use the limitations of a Sharpe ratio
I can give other links to cases where Sharpe ratios have not assisted investors in making the correct decisions. We all know we cannot rely on future returns predictions based on the past performance results - but using a "one size fits all " method is wrong in my mind
Let the Industry carry on with their ways - that is no problem for me and as you know i don't have much time for them, and basically this thread is to knock the Industry anyway.
Hope that explains part of my reasoning - and also probably my attitude to them when they try and box me in a corner - due to the fact that they think I am a dodgy vendor and not a serious retail forex trader.
Regards
F
PS on to the next questions a bit later on
random12345
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You are. Leibniz/Newton predated noughties philosophy.
http://en.wikipedia.org/wiki/Differentiation_(mathematics)
random12345
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How frustrating. Early on I gave him a methodology and formula for calculating the Sharpe ratio. He has done god knows how many hours of reading in an attempt to undermine its use and still has no real ideas of his own. Money in/out of the account is irrelevant because you can use your DAILIES in order to calculate a Sharpe by using the sqrt of your total dailies to do so (known as "annualising"). This is how it tends to be done on volatile balance accounts such as retail accounts. Using other forms of the Sharpe calculation (monthly/annual) tend to be for fixed investment. This is why your dailies will always be required if you seek seed money.
Your dailies are thus. Take the profit/loss of the day and divide it by the CLOSING BALANCE for that day. Even using O/B would create no real issues. You then multiply this by 100 for a neat percentage. You then do this for every day of the trading year. For the rest of the Sharpe procedure on a year's worth of dailies you now add these up and keep this number separate (i.e. your total annual return). Now you use Excel to figure out the standard deviation of all your dailies, population or sample variants are fine, will be very similar so no worries there. This provides a single number. Now what you do is take the sqrt of your total number of dailies in that year (known as "annualising") and multiply your standard deviation result by that number. Let's call this number x.
You then take your earlier calculated total return (sum of daily returns) and take away 5%. Whatever you are left with you divide by x.
Thus your Sharpe for an annualised daily sample appears. Incredible.
I provided my own FX trading calculation explicitly for FXmo. Here they are again.
My return for the year from my dailies being 71.82%.
Risk free amount 5%.
My s/d was 1.83%
I traded 215 days.
Sqrt of 215 is 14.66 (note how the amount of traded days DO NOT matter in a reasonable sample since this number changes easily).
x = 14.66 * 1.83 = 26.83
Thus my Sharpe is (71.82 - 5) / 26.83 = 2.49.
If someone could please point out the weakness in knowing someone's absolute return, percentage return and Sharpe ratio with this method above that ISN'T a Martingale risk issue (this was mentioned very, very early on) then please do explain it. The Sharpe is a first check that is then used in conjunction with the DDQ and eq curve of any fund seeking seed to see it it holds up with their claims.
For example, if you have a scalable return of 25% and a Sharpe of 4 with a run up/drawdown eq curve to back it up then get ready to get your money. If the Sharpe is above 1.5 it will likely be considered too.
If you have a return of 300% and a Sharpe of ~ 4, it's likely you won't be called back because with such high returns, your volatility must be enormous to drag down the Sharpe like that. It's a great tool, though the Calmar is becoming preferred due to its drawdown focus. Investors like to know how much they might lose as a maximum in the first instance. Problem is they need to protect their end clients. If they lose 20% in a month despite the fact they may make 320% in the next 11 months, they have to pull their funds at this point because the risk of ruin is great.
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sonofcablemonster
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Hi F.
I hope you're well, and I wish you all the best for the new year, as I do one and all on this site.
As you can appreciate I have been a staunch supporter of you, and everyone having the right to post what they wish, and what they don't wish to post, then not to, alas I do have a few questions that have me a little perplexed, and if you could be as kind as to answer them I would really appreciate it.
First of all why do you have more than one account, I.E a main account, and another. Surely if you have a method that works then there can be instances of slight variances between brokers that can mean the difference with tight stops of either being in a trade, or being stopped out.
Second, a few posts ago you mentioned that you post trades that are a little lagging, because you don't want to be a text, advisory service etc, but surely if someone follows your trades live would do it as their own choice. Caveat Emptor etc.
Third
You also stated that you're here to teach people how to get profitable at trading, yet talk about LR's, and how you have no time for beginners, and would only help intermediates. I'm sure if you started at the beginning, and helped all the beginners who come on this site, then that would be more intertesting, and you would gain more kudos from all on this site, rather than have the beginners reading your thread in awe and amazement, yet don't have a clue about what you're doing. Yet down the line if you decided to sell your magic formula, they would be the first to sign up, and i think that is what the seasoned veterans of this site are worried about.
Fourth
Would I buy your course if you sold one. If I did not have a profitable strategy then of course I would, as would any sane person who was not profitable, but only on the proviso that you could prove every claim in your threads of account size, averaging 50 pips per day, and not having a losing day for over 6 months etc. If you couldn't prove this or tried to fob me off with a smaller account with 3000% return in a week, then I would run for the hills...............Beverly Hills.
Fifth
I think no one is questioning you're psychological barrier/can not handle pressure, because that is not the crux of their issue with you,
Sixth
There is nothing wrong with not knowing something, and asking about it, i.e. if you didn't know what a Sharpe ratio was, you should have asked Random/Shakone, and I'm sure they would have explained it so you could have worked it out properly, rather than back yourself into a corner.
Seventh
Personally I think that anyone following your methodology on the other thread will not be profitable, and please excuse me for saying this, as my reason for this is that everyone has an individual style, and adapting to anothers, or trying to work it out just by watching someone throw numbers of entries, and currency etc is very hard if not impossible,
plus from what I've seen of your trading, naturally there is a fundamental flaw, but you know this already, and don't really need me to point it out.
I do intermittently check in on your other thread, but unfortunately I am unable to contribute as, unlike you my multi tasking abilities are rubbish, thus trading/making money is my no. 1 priority, and all my focus, and concentration is spent on my trading.
As for this thread well I have certainly not learnt anything in regards to the thread title, and should not really be wasting my time reading it, but like watching the aftermath of a car crash I keep coming back.
Best
John.
Hi John
I hope you have a happy, healthy and prosperous 2014 as well
Thank you for your comments and I have numbered them to reply
1. I have multi accounts that include more than 2 at the same brokers - that allows me to link them but with different stake sizes allowing me to take a lot more risk on the small account - but controlled ( less than 1% risk ) on the larger account.
I still have not found my own perfect platform package and generally like to try out others like Pepperstone and Dukascopy last year. Some of these accounts might only be used only 5 time a month and it is good to see how good the executions are at the same time as entering on the main account for comparison. I learnt my lesson after spending too long a time at GFT UK so its always good to shop around etc etc.
2.If you look through December - there as been days were I have even been able to post scalps 3-5 mins before taking them at a price I mention. Problem is unless you keep refreshing the thread - it can sometimes be ages before they might appear . You are correct I don't want to be a pure trade advisory service - i just want to interact with like minded short term intraday trades who really have experience and might spot things I don't spot.
Ideally we can all learn more together and i am sure most members here who stay on a few hours in the busy periods now know exactly how I operate on time windows etc etc. and stop size and holding for a reduced stake "free trade" with stop in profit etc etc
3. I have no plans to sell any of my so called "magic methods" - As i keep saying its time, study and experience that will make you a better profitable trader and my own methods might only assist 20 -40% if that.
I think i am being very truthful when I say you need many thousands of hrs - studying and watching paint dry most of the time at the 1 - 5 min frame ( coalface ). Ideally 5k live hrs plus - which is multi years. That's why I advise new traders to get one year or 18 months experience first - learning to understand many methods and being able to cope with losses.
Then maybe 2- 4 yr experienced forex traders are ready for the next stages - and even then I reckon it takes another 6 - 12 months to get to a reasonable intraday level - even with assistance.
My thread is mainly for my own live daily personal journal of what I am looking at - thinking - taking and also what i am missing. It helps me focus and get into my own trading zone - as normally intraday multi trading can be boring and lonely and like peeling potato's and cutting your finger every now and again.
Another reason is to show Forex traders that you can trade in the "noise" - you can work on 5 pip stops and you can be efficient with RR's of 3 in under 15 mins. But you have to handle losses and mistakes and move on quickly
4. No course - books - DVD's etc etc for sale - why should I bother with the hassle when I can get my fun coming on sites like this and shaking them up ;-)
5. Well I think that is important - nobody ever told me you cannot keep compounding from a few thousands up to millions in 3 years - I tried found it not possible for my "mindset" - and I have been used to stress and pressure - but could not handle large lots sizes - with my own money . Probably 1% or less can do it ?
6.No - I knew all about the Sharpe Ratio - I had to test how far these guys will go to try and wind me up and get me banned- also i had to find out much they knew about it and also what their real "game" agenda was or is ?
7. Yes the main flaw of my method is maybe less than 15% of retail traders will be able to get there. Does not mean they should not try - but they need to know its a long road on a massive journey - hardly a sale pitch to newbies. For scalping you do need fast executions and great rates - but then i don't have to bother on the "free trades" even if the spreads are 3 or 5 pips - i am more than just a scalper - but no "master trader" like a few others I know in my old group.
The dedicated, patient. focused and determined traders should get there - but its hardly 30 mins a day and then profits after 3 months
Finally this thread is just good Jeremy Kyle / car crash entertainment and really i like the photo's the most
Have a good week and I hope that's clarified a few more points
Regards
F
Forexmospherian
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Hi Random
What I can gather from this information you have provided for your own Sharpe Ratio is far more important than the ratio itself.
For example your return for the year of only 71.82% calculated from your 215 days of trading averages out at 0.33% increase per day.
Now right away it shows you are trading a large account and so can hardly be called a retail account - how large I don't know - but could be over 1 million or even 5 million plus. You are not trading under a quarter of a million - as it would not be worth your time and effort but there again I don't think you are trading 50 million plus as you would not be wasting half your time with me
With your S/D being tight - I guess you are totally disciplined and would have a win ratio of over or around 50% - even if you are using algo's ( not my cup of tea ). You have mentioned you close your trades daily so I don't really know your own strategy as you are not a PPND artist. ( no I said PPND )
Thank you for being open - you just need now to tell us if you are involved with HFT and the size of the fund
Regards
F
random12345
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FXmo, even in your state of mind, you don't believe this statement and you definitely can't expect anyone else to. What's it like being a liar at your age in order to protect your pitiable pride?
I got over this stage of human development when I was in my teens...
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random12345
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A schoolboy analysis... well done you, really well done.
"Thank you for being open" you say...
Except I already posted all of this information many pages ago, you know, around when you didn't get the Sharpe or how it worked and posted your outright lies?
You did not ever post yours it seems.
You have never been open.
Again you have used the age old "lose the argument, change the question" approach - the point of this thread has become to prove you don't know jack about the commercial world and have limited knowledge of the retail world (again, see title). You already showed the latter in your main thread initially with your ridiculous claims of zero spreads and commission confusion and you have been shown to understand very little about the commercial world in this thread. Simply stop selling yourself as someone competent and we'll all be happy. You = not competent. Good stuff. Posting links about mathematical anomalies as proof of your argument is beyond laughable and a new low. It's a tough pill to swallow I know, but you have no talent for this area... just say it to yourself if nobody else. That's progress. As Shakone has pointed out, you don't understand the Sharpe, you lied about your understanding about it, you continue to do so, you have little to no grasp on any mathematics beyond the four basic operations and generally you're something of the Rain Man of T2W.
Welcome home.
random12345
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nice explanation Random. You have a good day trading tomorrow. I know I will
I genuinely looked on an online thesaurus for the word cnut in order to properly describe you here CM.
Unfortunately there was nothing that sly. Slit was the best it could do.
You, sir, are a slit. A muggy slit. Good day to you.
Forexmospherian
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You have confused me now by answering me exactly how I thought you would to my question - and of course not saying if you are involved in HFT trading and of course the size of the forex fund you trade ?
I am supposed to learn off you - not you learn off me
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Forexmospherian
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Totally wrong here.
I really cannot be bothered to go back through the posts - but from the first time you requested you wanted my Sharpe Ratio - and then wanted it within 10 minutes - I commented it would be a waste of time - as comparing apples with oranges and the sharpe ratio in isolation was of no real value to me and was not one of the indicators I used in my own performance assessments.
Cannot you remember that far back ? - ie I said and repeated several times as normal - The Sharpe Ratio as many weaknesses and the number in isolation means nothing in retail forex trading - of course you were not interested then and were probably more frustrated and annoyed with accountancy companies like Ernst & Young and any chubby woman who trade forex
lol - sorry I am laughing about that
S
sonofcablemonster
Nice returns random. May I ask do you trade directional or spread? Understand if you cannot say.
GTTY
GTTY
Forexmospherian
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Hi Shakone
The Forexmosphere group along with other groups were disbanded by Forex Street in mid 2013. If you look on their site now - there are only 5 groups and at one time in 2011/ 12 there was probably over 50 different trading group.
As MM as already informed you - he was not a member of Fx Street - nor of the Forexmospherian group. He started following me through one of his friends on twitter - a Johnfx - who was also a Forexmospherian
I don't know MM personally - never met him - never spoken to him on the phone and have absolutely no financial arrangement with him and from what I understand he has only been interested in my method of trading since late October 2013 after spending a previous 18 - 24 months not getting anywhere with traditional methods and courses.
Random does not think I am a dodgy vendor - he just thinks I am a nutter - whereas your agenda is different as you really do think I am up to something sinister.
Of course - you are both wrong - but please do not let it bother you - we all make mistakes in life and I am sure it will not be yours or Random's first - or last
Regards
F
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