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bootstrap

Bootstrapping Back

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i had the pleasure (if you want to call it that) of giving a presentation at one of the local universities on real world trading last week. it was during the q&a that i was asked, "If you lost it all, could you make it back?"

 

given the recent mayhem on wall street, i thought it was an interesting question. even some of the brightest can get greedy and go down the wrong path.

 

of course my answer was a resounding "Yes, I could." and of course there was a discussion of the course of action i would take. unfortunately, one of my business partners was present. at lunch he brought up the "Chris Ferguson experiment". for those unfamaliar with it, just google "Chris Ferguson Challenge."

 

so here we go. i am going to act as if i lost it all due to greed and stupidity. i am going to start from ground zero. it is all going to be on paper, but should be a fun experiment. here are the rules:

 

* i have returned to work and am making $50k a year, paid twice a month.

* i am free to take a second job if i wish to do so.

* i work during US day time hours, and can check the market only at lunch.

* the opening account balance is $5k. but i am free to trade any market i choose.

* i can only add to the account on pay day.

* i must pay living expenses. (rent, food, utilities, gas and insurance).

* (handicap) buys will be filled at the high, and sells will be filled at the low.

*since i have no money to start with, other than the opening balance, i have to use free software and data until i can afford something better.

* i have a single monitor PC.

* i start at ground zero, Nov 1.

 

in case you haven't figured it out yet, i am not handicapped by a specific strategy. which means i am going to use what i already know.

 

do you guys want to watch? or do i keep this between me and my partners?

 

i am guessing the answer is yes.

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Hey bootstrap, should be interesting to watch. I had my own Chris Ferguson Challenge back a while back... with $150 to my name and my landlord kicking me out in 2 weeks. Ended up flipping $50 of the $150 into $1500 in 10 days playing poker... eventually built that into over $40,000 over the course of the year. That $40,000 opened up doors for me during my early college years.. eventually building a stake to enter the trading world as well as using the funds to start businesses. But it all started with $50 :)

 

Anyways, will monitor how this threads go. Should be interesting.

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i never mentioned it in any of my other posts, but i funded my comeback after last and final blow-up (knock on wood) from poker. used a cut and run, made my $$ goal and hit the door...small but consistent profits. but that will be off the table this time.

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"guessing the answer is..." My answer would be no :\

 

In the long run I would suggest that you would be better off keeping it between you and your partners...

As far as helping other forum members via such a demo, everyone already knows it is generally possible. But, just because one individual can and may do it does not mean the next trader tracking his progress or history can and will be able to do it or even learn anything that could be transferred to their own process

bottom line from my perspective: the exercise's appeal is understandable - but mostly just ego's get helped or hurt with these kinds of demonstrations...

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As much as I'm sure you're able to do it, I'd love to keep up with how it's going. I've seen people do challenges like this, and they're always very interesting. Wish you the best on this experience.

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  zdo said:
"guessing the answer is..." My answer would be no :\

 

In the long run I would suggest that you would be better off keeping it between you and your partners...

As far as helping other forum members via such a demo, everyone already knows it is generally possible. But, just because one individual can and may do it does not mean the next trader tracking his progress or history can and will be able to do it or even learn anything that could be transferred to their own process

bottom line from my perspective: the exercise's appeal is understandable - but mostly just ego's get helped or hurt with these kinds of demonstrations...

 

no ego here. i don't have to share this.

 

and i would have to say that you are correct on every other point. but what if this little game shows the newb's why entry is not the key? what if it shows what is the key? i really have nothing to prove. i can disappear into the thin night air, and never look back. all you guys have to say is go away, and it is done. i just thought that some might gain a small insight to the process that is all. they get to watch a disciplined trader go through the steps. take those trades after a string of losses. take money off the table when it lookslikeyo uare bout to hit that home run. not question what they are doing, but believing in themselves and the process.

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  zdo said:
In the long run I would suggest that you would be better off keeping it between you and your partners...

As far as helping other forum members via such a demo, everyone already knows it is generally possible. But, just because one individual can and may do it does not mean the next trader tracking his progress or history can and will be able to do it or even learn anything that could be transferred to their own process

bottom line from my perspective: the exercise's appeal is understandable - but mostly just ego's get helped or hurt with these kinds of demonstrations...

 

zdo I actually think this kind of experiment can help newbies with risk management strategies. There are plenty of traders who start with 50K+ because they have heard that to make money in the markets one needs a massive bank roll. Anyone who has been trading for a while knows that in the early stages the bigger the bankroll the more money you lose.

 

I think this type of experiment shows newbies that having a consistent plan is more important than having more beginning capital. Therefore encouraging them to use a minor capital portion to learn consistency and lose small rather than a big capital without consistency to lose big.

 

I am actually looking forward to this Chris and hope you do continue on with the experiment.

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Ok even if only one noob benefits it would be worthwhile...but my guess though is that not one single noob would get something transferrable. Enjoyable yes... inspirational yes... but truly helpful - don't think so. Noob's time needs to be spent in his own real world, not watching someone else on a simulator...

Generally applying principles doesn't work well in trading because every tweak to any system actually renders it a wholly new system with the need to reconfigure position management, risk management, sizing management parameters. etc. - so a noob who transfers boostrap's modes to his own even a slightly different system is going to get hosed... to a significantly different type of system and he's freakin' doomed for sure.

 

If you were to invite noobs to trade along with you with this, the most important thing they will learn is it's better not to to wear someone else's pants (for all kinds of reasons ;) ) So they would learn - but not optimally. Most would drop off some of them actually damaged... but again even if one benefits I guess it would be worthwhile

 

All the best,

zdo

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  bootstrap said:
no ego here. i don't have to share this.

 

and i would have to say that you are correct on every other point. but what if this little game shows the newb's why entry is not the key? what if it shows what is the key? i really have nothing to prove. i can disappear into the thin night air, and never look back. all you guys have to say is go away, and it is done. i just thought that some might gain a small insight to the process that is all. they get to watch a disciplined trader go through the steps. take those trades after a string of losses. take money off the table when it lookslikeyo uare bout to hit that home run. not question what they are doing, but believing in themselves and the process.

 

I love these experiments. Especially like this one suggested...it's not an ego thing and it's like a realistic journey a newbie could use at motivation.

 

I say run with it. I'll be watching it unfold. :)

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I for one, am very interested to learn all the details of what you use (good free simulator software, etc.), and your journey on this challenge, as I am in a similar bootstrapped situation, and would like to see how someone else does it from the ground up.

 

I would like to learn what I can by observing the progress of your experiment please.

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