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Howard,
Oops, I goofed. I should not have said anything about my friends actual track record on the list. I was just trying to make a point about how a good edge can be found but also how easy an edge can be lost through greed and fear. Now a hundred people will be posting to have him manage a fund for their money (he used to do that). If he were into that, he would have my money already. He trades what he is comfortable with and makes his daily wage. I respect and admire that.
The ETF he trades is not very liquid and could not stand a large trade without moving the market into the market maker's hands --which is not a good thing. So to keep his edge, he has to use reasonable position sizes. He has found his hidden niche and can keep it if hoards stay away.
Successful trading is 10% technical and 90% emotional! Isn't that why we try to program the edge into AB --to back test for confidence in our edge, and give unemotional mistake free signals?
I made the point I wanted to make, so now I don't think I should continue to post about this item.
Dennis
On May 26, 2007, at 5:27 PM, Howard B wrote: Hi Dennis --
Averages 2.5% per day!?
That same $1,000 starting account becomes $294,000,000 in two years.
(1.025) ^ 510 = 294,558
Please pass my email address on to your friend who gets 2.5% per day. howardbandy at gmail.com I have contacts who will reward him handsomely.
When Larry Williams ran $10,000 to $1,000,000 in one year and became famous for it, that required a return of 1.84% per day. 2.5% per day turns $10,000 to $5,039,800 in one year.
Help me understand -- Assume I can average 1% per day on, say, $100,000. Every month, I start with $100,000 and make $24,471 on that $100,000. Why would I pull my $24,471 profits out so that they can make 1% for the next month instead of continuing to trade them and making 24% for the next month?
And, yes, trading in size affects the market. But if your friend is trading several times per day in markets with high liquidity and narrow bid-asked spreads, then $1,000,000 is still small size. QQQQ and IWM each regularly trade $5 billion dollars a day -- $1,000,000 is 5 seconds worth of trading.
Pardon my skepticism --
Thanks,
Howard
www.quantitativetradingsystems.com
On 5/26/07, Dennis Brown <see3d@xxxxxxxxxxx> wrote: I know of more than one 1% per day method, but of course it will not work to compound. That is not the way a true trader does it. I know a trader who averages 2.5% per day on about 5 trades per day on one ETF, and holds no position overnight. He pulls his profits out and lives on them or puts them to work in longer term investments. High rates of return only work for small investments and usually require a lot of personal attention and pattern recognition during the day. If it worked for large sums, or easy computer algorithms, the big boys (or hoards) would work that angle to death and the edge would get neutralized. Once you try to increase position sizes above a certain amount, you start to influence the market and you have no one to play against --it takes two to have a market. That is why large mutual funds must look to a fundamental value model. They can not trade the technicals quick enough with out killing the market. A true trader will just work the market technicals to pull out a small amount of money at a consistent rate (no home runs). Over time, the results add up to a decent living.
Dennis
On May 26, 2007, at 4:02 PM, Howard B wrote: One percent a day. Yeah, right.
Compound one percent a day for five years and a $1,000 trading account becomes $278,000,000. Start with real money and own Manhattan.
(1.01) ^ 1260 = 278,567
Howard
On 5/26/07, dralexchambers <dralexchambers@xxxxxxxxx> wrote: T-ohrt - the thing you are missing is not your technical ability, but
your BELIEF and your ATTITUDE to new things.
You seem to mistrust my recommendation when in fact you nothing of
me, my level of trading knowledge, this system or my involvement with
it (my involvement is none other than my affiliate link - just to
make that entirely clear).
If you believe that 1% a month is all that is possible, that will be
your reality, and you will discount ideas that make more as trickery.
If you want trade lists, further explanations on the system I
recommended - discuss it with David, the author. It is not my job to
divulge a system that someone else owns.
However, I will say that David's system is very credible and also
very simple. I have recieved a lot of support from David and his
system opened my eyes to swing trading.
I also know of an individual who makes 1% A DAY - and publishes all
his methods and indicators for free, online.
Look for The Rumpled One at:
www.kreslik.com.
I am currently porting his work over to Amibroker on that site.
And yes, once again - it is all FREE, and you definately won't find
it in your "Beyond Technical Analysis" book.
AC
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