SIUYA

Much the same as MidKnight - well done, and although I dont wish to run through all the exact maths, I think you hit upon the problems inherent with any of these methods. There are trade offs involved in each, and ultimately a lot will depend on what you are trying to achieve. Do you want steady, lower risk, less volatile returns, or maximum returns with more risk higher drawdowns etc. Then you also introduce the issues of how this works within a diversified portfolio of non correlated assets, v a diversified portfolio of correlated assets, v what happens when they are meant to be diversified but turns out correlation might go to 1 for a few months! Regards what I have seen for trend followers who largely deal with this, some research I have seen elsewhere suggests (in a general manner) apart from the choosing the tradeoffs that best suit you, that less risk and hence smaller sizes when trading is volatile is a better approach. They then go on to summarise that over the long term, a simple rule, or even a simple non mathematical set of rules work out much the same as anything too precise. Rule such as - excessive vol means half current position, or if we have too many similar assets already on as a trade we wont accept more. eg; long dow, long nikkei, long Nasdaq, so we wont take anymore long equity positions. If however, you have enough patience, or discretion or whatever and your trading style is such that in volatile market conditions you are able to pick levels/turning points well, then your risk can still be quite small for large positions and the resulting payoff can be much bigger. As Zdo rightly reminds us - system specific. ....... Personally - I am conservative and adopt the approach - if the volatility is occuring because I dont know whats happening then stay out. If the volatility is occuring and I know the reason and the ducks line up - load up. (Liquidity not being an issue for most of us, but for others it is)

For those who like tweeting, twerking or both at the same time. 15 Best Finance Tweets of the Year: 2013

Darvas.....Best Google 'Darvas Box' as I would not do it justice....it was simply an example

one could argue most of these 'named strategies' consist of that....its just been given a name. One of the joys of polls. There are some names missing as well (eg; Darvas, Trend, MAs, Price action (all too generic)), but they are generally all fairly similar.

yes - if you follow them, then you will probably beat them as you save on fees! Point being - most managers dont beat the benchmark they are tracked against, most have strict mandates (they are far stricter than many might think) especially the ones who have applicable mandates and benchmarks that they are trying to replicate ...and while you say they can do a lot more than you....you might be surprised at how wrong you are on that. ( - its pathetic hearing fund manager friends say how well they did beating their index when they lost money over the year) I actually dont think we need to concern ourselves with beating any particular fund or index....we have flexibility to be able to be true absolute return folks. Who cares if this year the SP went up 26% and you made 15%, especially if you made 155 a year for the last 10 years. (One of the reasons why many are simply undercapitalised or over leveraged IMHO). Its always an interesting question to potential investors (one which you should not really ask if you want to be taken seriously).....so if you are happy with 15% a year, and I were to make that for you in a quarter then I should stop trading right? - watch your business dry up as they then say they wont pay you fees to do nothing, even though you did what they wanted in half the time.........the funds management game is a very funny business (and scale changes everything). There is also the funds management industry, the hedge funds (quasi long only or our proprietary models as BS), and the few 'true hedge funds' However......following them is the perfect thing to do....look back at last year, and think of a few things that were moving and you did not need any great indicator, fundamental analysis or much else - gold down, SandP up, Japan up, Yen down, GBPAUD rally (saved me some $ here bt based more on my circumstances ).....you only needed to get on a few of these things with the trend, use a bit of leverage, a little risk (you might have been stopped out one or two times maybe) and then let it ride a little....so long as you did not fight the trend. (definitions of trend not withstanding) how would you have gone? Easy in hindsight of course, but there is nothing stopping us as individuals keeping abreast of what instos think, what they are actually putting their money into (easy to see on a chart) and then coat tailing them - understanding markets is generally easier than mastering a market IMHO - it does not need to be much harder than that. (Getting away from this has been an error of mine in the past) You too enjoy 2014 - (We had a crazy crazy Dutch firework spectacular last night....f...n nuts when you let a bunch of drunks, children and anyone have unfettered access to fireworks! Everywhere, crazy......but fun

....because you dont have the same index OR mandate as them, and while they are stuck replicating an index with cash and leverage limits, you are not. Most managers are unlikely to beat their index or mandate - law of numbers, costs, talent, etc etc etc - This is the argument of passive v active investing. .... However - as Kiwi (good to hear from you) says - we have the luxury of patience, we dont have mandates, we can often use our small size to pick entries and exits, we can use leverage of various amounts etc......and this is what we should be doing to ride the coattails of institutional money moves (alternatively known as trends) when they occur. Its probably no surprise that some of the managers that actually have made good money over the years dont have an index they solely concentrate on. They know that opportunities abound, they just abound in many instruments at various times. ...as a side thought - it is always worth comparing how you go with an unleveraged amount compared to the index you trade in. (despite the various issues of risk v return and standard deviations etc) example: lets say the stock index you trade is up 25% for the year, you normally trade in one contract and that contract is roughly the equivalent of $100k per contract. So a simple unleveraged investor would have done nothing and made 25k. while the $10k trading account might have made 100% for the year and 10K.....in profits trading that one contract. ....and then you extrapolate that over, 1 month, 3 years, 10 years...... ................................food for thought. /////////////// otherwise I liked the original article.

I dont pay for or use any predictive services as such. Simply the news....and thats free mostly. Many years ago I found 3rd party predictions were either 50:50 at best or at worst they distracted you from your own view. Better to spend money on a scanning service that can alert you to opportunities. The best predictive measure is still the overriding fundamentals that is currently driving a trend. (note: not necessarily the reasons you might think is driving it, or will drive it in the future, but that the market is focusing on at present.)

some interesting history for those so inclined..... Bernanke?s Recession-Fighting Weapon Developed by 1900s Banker - Bloomberg

while I agree with the first part, I wonder what you mean by secretive freeloaders? are these folks who read, but dont contribute, or those who contribute crap, or those who just contribute general banter......most of what has been said has been said to death many times over. and I think Livermore said it best - 'I trade on my own information and follow my own methods.' .............. Forums are forums - you can apply the 80-20 rule to everything, (or 98-2, 95-5, 99-1 rule) Thats life. It would be nice if someone could explain the 'meaning of life in a sentence' - but you know what - people would still probably ask questions, not understand, not beleive, put their own spin on it etc; etc; etc.....and how boring would one sentence be. Here is my meaning of life sentence for the day which can be applied universally to everything to solve all your problems...... 'get over it' question you want to ask yourself, which category do you want to put yourself in?

oilfxpro - its simple..... Having a system that relies on context,filters and an individual traders discretion is not really a system that is of any use to others. posting some trades but not others is pointless....especially if it does not have any system, or rational behind it. calling a bunch of people idiots - even if, or especially if you dont believe it reduces all your credibility even further. If you think that everyone on a forum is a scammer, liar or idiot then WTF are you doing here? I know you are here for the comedy but hint, hint - this aint funny and as a comedian it kinda aint working. I normally might not agree with some on these forums, but I hazard a guess everyone is pretty much in agreement in regards this.

for a good laugh..... 39 Test Answers That Are 100% Wrong But Totally Genius At The Same Time | Distractify

2014 - choppy weather, not much fun but nothing to worry about. for those interested check out the annual Saxo bank outrageous predictions 2014 http://storage.saxobank.com/TradingFloor/TF_OutrageousPredictions_2014.pdf (please amend if you dont accept links - otherwise Goggle it)

I have tried both on different occasions and with different people and while it might be nice to write a set of pros and cons, each situation is unique. Conclusions for me.... I prefer to trade with someone - so long as they have the same (or at least similar) philosophy to trading and work ethic/time. This minimises distractions, minimises issues of 'what ya doin?' and 'why ya doing that?' (not to be confused with helpful distractions of 'mate, you told me you were bullish this morning, now you are bearish, and fighting the up trend, lets go get a coffee/beer/game of golf as I understand how we both work best') If I cannot get this then I would rather trade alone as there a less distractions, and the greatest enemy is boredom and lack of routine.

There are multiple issues/points raised here..... Your friend is right - ultimately the bottom line is all that counts over the longer period of time, and that the rest could be classed as merely excuses. .....however, that does not mean he is right and that if everyone had a bonafide system then there would not be issues. It is finding solutions to the issues rather than excuses that separates many. Your friend is also coming from a belief that it cant be done and hence this clouds the rest of his analysis. ...... this raises the old age issue of passive v active market participation and if people believe that you cant beat the market then as far as I am concerned you dont need to say/hear anything else. Otherwise you will simply be looking for evidence to confirm this and then you should be happy to accept the market results. They should then not feel qualified to offer advice to those who choose to take a different path. So for him all the other stuff is nonsense because he does not believe you can beat the market.....so thank your friend for his input and move on. spend your time working out if you are making excuses, or not finding solutions. ....... for me as well this then leads to expectations.....and do your expectations match with reality. You friend expects it cant be done. What do you expect and is it worth it to pursue it and find solutions? ....... The other issue raised he is that about automated/systematic trading v discretionary.....there are big difference between having a system in one, or a system in another and each has its own problems/issues and solutions.

I would like to preface this with the idea that there are trading educators, trading service providers and mentors. They are different people, and there are snakes and good ones in all three. (Many fund managers/brokers/regulators/insurance companies/banks etc could also be lumped in here - they are often service providers who promise, charge but dont deliver - why shouldit be any different elsewhere) I think this is the one thing that many people do get up in arms about. I agree and I have never had a problem with educators - its educators with red flag and 'spurious claims' that are the problem. To often a trading educator is simply a service provider. they provide an education in a few things, they point out the pitfalls, they can help walk people through things. So how much would you pay for this. As to the question : why buy trading education..... the answer is : Its a short cut. Its like any education you have to spend money on. be that in time or a book or a video. The real question people should be asking is - what are my expectations from wanting to trade, buying this education and how much it costs both in time and effort and then usually if they can justify it to them selves after these questions so be it. Reality is often their expectations are so f...d up because they listen to trading educators who spout BS about abnormal returns....and the first thing everyone forgets about is - if it sound too good to be true it probably is......after that who cares if they spend their hard earned cash and act as suckers. Any person who spends 2k of a 20k stake for an education is in too much of a hurry.....especially when they think they will turn that 20k into 100k. They should spend another year working to save more money and at the same time getting their education. (you do know the reason why scams work and will continue to do so) When you pick up a book and think this is all you need you are also kidding yourself. Thinking one good book will navigate the system will navigate the free info and help separate the good and bad info......:doh: (In recent years Its called the roladex 'for who can bail me out ' and it costs more than $50, and these are the guys who where meant to be the master of the universe and knowing how it all works.) Oily - you ask about a good mentor - any m...f who claims to be a mentor and then charges money for it is not a mentor. They are a service provider. A mentor does not charge money......it makes me furious when people use this term. (a bug bear of mine and not picking on you, I have just had a day of snacking on stroopwaffles.....hmmmmm)

its a good question...and there is no simplistic answer.....but if pushed I would answer - no Reason - its too simplistic: most statistical edges are probably at best temporary. just because you give someone a 'tool' does not mean they will be able to use it skillfully. (think of two people with identical training in using a car, sometimes you are better understanding not that there is a statistical edge but where that edge comes from) There is natural talent involved (be that intuition or a better mathematical analytically focused brain) one persons statistics is another persons lies People also have different motivations, expectations and desires to then tinker (improve or destroy) People have different in built risk mentality. This also applies to different ideas of value - (eg; whats the value of a $1 to someone who has $209k, or someone who has $200m) (this also would depend on the persons age, demographic, standing in a society etc, and to even think you could get identical test subjects to compare this would be extremely rare and could only be generalised) There is also the persons attitude to luck, their levels of stoicism, and ideas of ego etc etc. I think it has been shown that even with trading systems, even when they were working (think Dennis and turtles) people will respond differently to them, and if anything its that age old thing of trading revealing a person, rather than a person revealing their trading ability.

gotcha .... or did we? PM me and that will be 100 a month for your education Mits.....thats what trading rooms are probably like for a lot of folks....pay to learn not to use them. Whats that saying?....some things can be learnt they just cant be taught.

vote 1 for Mits setting up an anit-trading room blog vote 2 for Mits taking some valium in his next serving of raw meat vote 2.a for Mits rubbing one out as it seems there is simply too much angst there. vote 3 for TGIF vote 4 for me setting up under another alias just to torment Mits as a potential vendor

if you can find someone who will give you all the upside with none of the downside good luck - i too would like to find that. why dont you buy a longer term straddle, sell a shorter term straddle, or simply trade the gamma (as suggested) to pay for the time decay (You only really need a put or a call not both) - you will likely end up break even less costs unless you get some good moves or are very good at rehedging. if you have a large enough account you can often get a volatility swap or a variance swap - but you will pay for this as well. You cant expect someone to give you something for nothing.

it must have been a small hedge fund, or one run by idiots at those returns, or the guy is making excuses, or maybe the hedge fund guys looked at it, said the system is really just a fluke, unsustainable, unscalable etc. If he had a system like this, and he had 'true' hedge fund experience then why set up a trading room? eg; your numbers say it all. if he does not have, or cannot raise 100k, then 50 subscribers is chicken feed, especially when that will diminish his long term survival. A good trading room should be able to survive as should a good strategy - IMHO. (given variations of context, market regimes etc) if the returns are diminishing then its likely that it was not a sustainable free lunch edge, its been discovered by others, or its simply not scaleable which makes you wonder how good it actually is. there is nothing wrong with milking a cow while she gives milk, its thinking the cow will continue to produce more and more milk and that it is actually a golden goose that causes the problems.

Thanks for the reply....dont worry about Mits he is the guard dog of vendors....and everyone is skeptical of those who come on as new TL members instantly talking about trading rooms. People do believe there are profitable trading rooms - problem is - often they dont last, and more often they are just flukes.....but if the guy really has issues with liquidity for his system then he is the idiot for actually putting it as a trading room. He also is entirely reliant on all of his members not telling others (good luck).....so the trading room person is most likely not able to scale his own profitable system, or he knows it too is only a short term proposition in which to make money for themselves by selling the idea, or they know its a complete fluke based on the current market context. That should also be added to your list of things to watch out for in trading rooms. Also verifying its honest - after the event means nothing. Trades can be fudged anytime after an event. One of the major problems with many rooms so I hear. thanks.

Megaman123 - can I ask - why put your original post in if you refuse to give out the name so that others could offer comments on it? then follow it up with "I dont like education rooms. Theyre worthless" It does sound strange or a bit Madoffy to some of us old skeptics. /////////////////// All your other comments then seem to say that you have only 'tested' it - not actually traded yourself? eg; "I forward tested his new daytrade system for a year, which then gave 50% return" you assume slippage of 10%....and that the room has been backtested. Hence without revealing the room - You should be able to reveal the actual trades - of the back testing and forward testing you did. Let others see if its to their liking and that they can then determine that in fact - yes maybe there are some trading rooms worth it. I am always intrigued by such numbers when folks claim certain things. thanks.

trading is a lonely business.

Then your postings are largely pointless right? I would not be interested in copying it. If you can do it I would rather give you money - borrowed money even - and watch you compound it. but for others - simply rattling off....bought here, sold here could mean anything. Not for me to comment or care really...... Except it also makes me wonder - why tell everyone how much of an idiot other traders are for not following instructions when its 'complicated' 'is an art' and 'you can not put thousands of words in explaining the thoughts process , the methodology and the reasons behind it's success' - all a bit confusing really. Are you sure your not being deliberately obtuse? ///////////////// For MM - with returns like these I would pay 3 and 50 - I think I would also be making regular withdrawals which of course would limit my compounded gains but hey my risk aversion often gets the better of me. There is an interesting interview on bloomberg dot com with Stanley Druckenmiller today - he makes some interesting points all traders should take note of and even comments on the fees charged by so called hedge fund managers. You will like it.

Unfortunately OilFXPro...... this has nothing to do with exposing anyone else, nor does it offer any proof of trades you may be doing. Regardless if you are selling anything or not. You would require more information for real due diligence and more cohesive and consistent thought process for why you are doing trades, results and methodology. .....so in that respect - your parody of a 'real' fictitious account seems to be continuing well. apart from really having picked up the sales pitch part yet - lift your game! Also not sure why you keep mentioning George Sorros/Soros/Symonds or any others - they trade differently and they also 'sold' their services as a hedge fund....a far better option IMHO. Call me in three years with an audited track record - then fee free to charge 3 and 50.