thalestrader

Hi Folks, One trade on the 6E for +33 ticks ... Best Wishes, Thales

This reminds of the following exchange from Linda Raschke's interview in Schwager's New Market Wizards: Jack Schwager:What percentage of your trades are profitable? Linda Raschke:About 70 percent. Jack Schwager: Is your average winner also larger than your average loser? Linda Raschke: On my short-term trades, on a per contract basis, my average win is about $450 (the figure would be higher if I included longer-term trades), and my average loss is just over $200 . Jack Schwager: With both the percentage and average magnitude of your winning trades outdistancing the losers by a better than two-to-one ratio, it sounds like you would be profitable in every month. Linda Raschke: Every month! My philosophy is to try to be profitable every day! Of course, I don't quite achieve that consistency, but that's my goal. I'm probably profitable nearly every week. Remember, I do this for a living, and I use my own money. I really value the fact that I've learned to trade as a craft. Like any craft, such as piano playing, perfection may be elusive - I'll never play a piece perfectly, and I'll never buy the low and sell the high-but consistency is achievable if you practice day in and day out. - all emphasis added by Thales Equity, like price, moves in waves, so losses are to be expected. But unlike price, losing days are random. Here is what I mean: If you are trading according to your plan, and if your plan dictates that the average win is a multiple of average loss, etc. and so on, then a losing day is simply the result of the exchange banging the gavel to close out the "day" before the market presents me with the opportunity for a win to recover more than I had lost on that day up to that time. All of which is to say that I will post the days as they come. My goal in this contest, as in all of my trading, is to be profitable everyday. Like Raschke, I'm not quite there. But it is my goal. And it does not bother me in the least to know that I will never succeed in being profitable everyday. But by making it my goal, and by doing the things necessary to achieve that goal, I am able to get close. Losing days happen, as do occasional multi-day draw downs. As a matter of fact, we are in a time of year where my trading hours are cut dramatically, and as a result, the chances of such a multi-day losing streak goes way up, since it becomes more possible that I find myself trading when the losing trades occur, but I am away from the market when the winning opportunity's present themselves. I will post a losing day soon enough. At any rate, one could do worse than start the day off reading that paragraph from Linda Raschke: My philosophy is to try to be profitable every day! Of course, I don't quite achieve that consistency, but that's my goal. I'm probably profitable nearly every week. Remember, I do this for a living, and I use my own money. I really value the fact that I've learned to trade as a craft. Like any craft, such as piano playing, perfection may be elusive - I'll never play a piece perfectly, and I'll never buy the low and sell the high-but consistency is achievable if you practice day in and day out. - Linda Raschke Best Wishes, Thales

Nice trading overall, fxT. You are correct in that you will need to increase your size as your equity increases if you wish to reach the finish line. However, you do not need to increase your trade frequency or be more "aggressive," (by aggressive I take you mean that in an effort to increase your gains quickly, you took entries that previously you would not have taken). You need to do exactly what you were doing that worked. Just do it bigger and bigger oer time. One lesson that I think you will see proven as The Race progresses is that the trader who trades least will make the most. I look forward to crossing the finish line and finding you already there to greet me. Good luck! Best Wishes, Thales

Hi Racers, Just a reminder that I need your week ending equity PM'd to me by noon EDT on Sunday. I will post the weekly summary Sunday afternoon. Also, if you had trades yesterday and have not done so, please post a pic of of your daily statement. Best Wishes, Thales

Hi Folks, I had no trades last night or today, so I will not be posting an updated statement tomorrow. My next statement will be posted Saturday morning. Best Wishes, Thales

No problem. I'll add the $99 to your starting capital total. Good Luck! Best Wishes, Thales

What happened to your $200/day loss limit? Best Wishes, Thales

It's fine to switch accounts yeaheah, but do make sure to include a final pnl from the Oanda account when you PM with your weekly totals on Saturday. Best Wishes, Thales

Hi there, ADarkerRattlingMe, Am I reading your statement correctly? Were you trading 3 lot positions? Best Wishes, Thales

Hi Folks, I managed to check things out briefly yesterday afternoon. I had one trade on the 6E that I unfortunately had to cut short when I had to leave for the rest of the day. Best Wishes, Thales

For crying out loud, 2 pennies per share is what counts as trading success today? That's an edge? Let's wait 'til the guy learns how to trade before we dedicate a thread to him, shall we? The problem with these quant types is that they fail to see that there are but a handful of edges, and these true edges endure. An edge that is ephemeral is not an edge, it is a coincidence. 2 pennies! It's not worth rolling into the office for 2 pennies. As a matter of fact, I trade a lot of stock myself, and I cannot remember the last stock trade where, had I wanted to, I could not have had at least a nickle! But what's the point of that? Only pikers worry about psychology? Well, that makes sense, as I am a piker, and I happen to think that psychology is paramount. What good is discovering an edge if you cannot control your emotions well enough to exploit it? Quant guys and HTF types are so out of touch with their own psychology that they cannot see how deluded they are concerning what they presume to be their superiority. 2 pennies? If he's not cutting 2 quarters, he's not there yet. Best Wishes, Thales

Hi dwt, I was just going back through the thread and I caught your question about shifting gears - I have no problem with that at all. I doubt any of the other participants would have any objections, though they should speak now or forever hold their peace. I myself have considered taking some profits, should they accrue sufficiently, and opening a second account (seeded, of course, out of the profits on the initial stake) and adding stock and option swing trades to the futures trades in my quest for the elusive (some, would no doubt say "illusive") million dollars. You can start with a microfx account, roll into a futures or ECN forex account, etc. and so on. Best Wishes, Thales

If it were a % gain on initial stake contest, I'd stand down and have my daughter trade another microlot account. I really didn't give this much thought, as The Race was my response to sicktrader's "1k to 1,000,000" phrasing in the "let's Trade" thread. I wanted to keep it close to 1K. In future iterations of The Race, I'd be open to allowing different equity levels depending upon the trader's chosen market and style, e.g. 3K for futures day traders, 10K for futures swing traders, 25k for stock day traders, and 50K for stock swing traders. Off of the top of my head, each of those amounts would control a similar notional value of securities/ instruments (give or take, folks, give or take). Best Wishes, Thales

I'm very happy to have you aboard, Trader Dante. I recall your journal at T2W from some years back where you were trading a small spread betting account, and I look forward to watching you do it here at TL. Welcome to The Race, and I hope you hit the million! Best Wishes, Thales

May I ask, MM, what you think is a reasonable profit one might expect from a good trader actively trading a 10K stake over, say a twelve month period? At what point would you consider the gains to be the result of recklessness? Is 50K on a 10K base too much to expect? 20K? 10k? 5K? 2K? I'm not trying to be adversarial. I think this is a fair subject for discussion within this thread - what do folks reading this thread expect, in terms of profit, from their trading. What do you expect from your trading? Best Wishes, Thales

From the pnl thread two months ago ... Not for nothing enoch, but The Race is not what is wrong with your trading. As a matter of fact, as crazy as I'm sure this sounds to the vast majority of TL lurkers reading this thread, I believe that you may find that The Race can help you identify what's wrong, if you use it as the tool it is. Best Wishes, Thales

No problem, sicko, I'm not bent out of shape at all, and I don't think that was mightym's intention. But, his post did raise some questions, so I thought I'd put them out there. I agree, let's get this thing done on the first go around. Right now I have $4000 between me and bust ($1500 stake, $1500 reserve, $1000 profits), so I'm feeling pretty good about my chances of staying alive. Best Wishes, Thales

In order to be counted as an official participant, all the participants must agree that you made a real attempt at trading a small account to 1 million. Simply opening a small account does not warrant a "real attempt" to make a million from that account. Best Wishes, Thales

At what equity level would you be interested in starting? Are you suggesting you'd race to 1 million if the starting equity were higher? Why "everyone trade the same instrument"? What "account auditing rules" do you suggest? Best Wishes, Thales

"Ah, but a man's reach should exceed his grasp - or what's a heaven for" - Robert Browning I like to think that nothing is impossible, though some things are more unlikely than others. Best Wishes, Thales

Hi Folks, Yesterday started off with four losses in a row, with an average loss of - 6.25 ticks. This was followed by two back to back short entries on the 6E, yielding +31 & +25 ticks respectively, so with an average win of alost 4.5R, the account ends positive on the day in spite of only a 33% win rate. If four losses in a row would be the worst I could hope to suffer, I would be very happy. There will be no update from me tomorrow, as I am unable to trade this morning. I also will not be able to trade Wednesday or Thursday morning this week, but I am going to see if the 6J gives me any action in the Tokyo AM hours. I will post if there are any trades. Otherwise, I do not plan on trading again until Friday morning. Best Wishes, Thales

There are many ways to "skin this cat;" and I think the system is but a very small part. You imply, and I'd agree, that there are many "systems," "methods," approaches," or what have you that are capable of providing the necessary win/loss ratio combined with the proper profit factor to enable one to double rather quickly. The "doubling," in other words, is far more dependent on 1) an aggressive money management regimen, and 2) the trader's ability to trade a particular system without allowing his or her own biases, emotions, thoughts, opinions, and judgments "override" or otherwise undermine a consistent application of the particular system. As to the money management aspect, you really have introduced some elements that are not typically found in books, articles, forums, etc. devoted to trading. Whereas most of us try to trade in such a manner as to reduce if not eliminate the risk of ruin, you court ruin, but in a manner that actually plans for ruin as part of the trading plan: In preparing for The Race, I decided I'd commit 3K to the attempt, but that I'd only post $1500 of that, and keep the other half in reserve in case I blow out the first half. In effect, I have put together a trading plan that does not seek to eliminate the risk of ruin, but rather accommodates ruin. I'm not recommending that everyone throw RoR and traditional money management out the window. After all, I still trade my main account as I always have - 123's and 2B's with small initial risk that is aggressively reduced - and I have no intention of applying sickMM to that account. But I admit that this challenge has surprised me in how much fun it is giving me, and also the degree to which I am starting to believe that this might just be possible. This is sort of becoming like a "Rubik's cube of trading" to me. Whether I make it this time or not, I can see myself attempting this repeatedly until I finally succeed. At any rate, sicko, you have introduced a new perspective on treating risk to TL, and if not to TL, certainly to me. Best Wishes, Thales

Current view of the USDJPY monthly. I have been posting this as ti develops since the beginning of the year. Last month the long entry triggered, after which price declined below entry testing some near term support better seen on daily charts, and it is now poised more or less at entry. Blue is entry, red is stop loss (which could probably be moved up to just beneath last month's low), green are profit targets ... Best Wishes, Thales

I think you have a gambler's special perspective (and I do not mean anything disparaging by using the term "gambler"). I have always understood that trading is itself a form of gambling (hoping to profit by placing speculative bets on future outcomes). Despite that acknowledgment, and despite my suspicion that there were lessons for the trader to learn by watching the (successful) professional gambler, I have not, until now, actually applied much effort to puzzling these lesson out. My understanding of risk of ruin is that of Blowfish (though Blowfish understands the structure of RoR far better than I). I also agree that yours is somewhat different, and I am not ready to concede one or the other. I have more to say, but it will have to wait until later. Best Wishes, Thales

No problem, you aren't derailing anything at all. The one addendum I have always added to the TVGR, going back as long as I have incorporated an awarenss ofthe TVGR, which is years upon years (and jands, who has known me for years, can attest to that fact) is that I include the further requirement that price immediately trend in the direction of the gap. In other words, TVGR becomes very useful if the market gaps and trends in the direction of the gap, and itis not nearly so useful if the market gaps and stalls, goes sideways, or, obviously closes the gap. I'm wondering if that 30% where the gap does not fill also are days in which the low of the day (for gaps higher) or high of the day (in the case of gaps lower) was printed, say, within the first 15 minutes of the open (and quite possible within the first 15 seconds). I would bet that is the case, because your 30% figure sounds right as far as a gap being indicative of a trend day in the direction of the gap. Best Wishes, Thales