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Herman thanks for your short resume of the Trading
world. Just a simple question. Do you really believe that group number 1
exists ? So Traders that do generate with a minimum of code on a
consistent basis a daily return of 2,5% without losing their pants on a
terrible outlier or drawdown that will take them out of business ? My
experience is that only a very small group of about 5% of the '2,5%+
return Day Traders' is reaching for a relatively short period of time
the above target ...
Regards, Ton.
----- Original Message -----
From: Herman
To: Howard B
Cc: amibroker@xxxxxxxxxps.com
Sent: Sunday, May
27, 2007 2:08 AM
Subject: Re:
[amibroker] Re: Ideas for Swing Trading?
Every few years this type of discussion surfaces
and it is great fun to read
It always surprises me how two types of traders can
be so oblivious to each others' way of thinking. Consider two types of
traders (ignoring the many types in between):
1) Those who scan 100+ stocks in Real-Time and
trade small lots of 100 shares (or whatever the market allows) 5-100
times a day, easily making up to a few percent on good days, using an
automated trading system.
2) Those who trade portfolios with 1000-10000
shares/trade and must roll over millions of dollars trading for others,
making, if they are lucky a few percent/month.
We have both of these traders on this list but
really they should have their own lists, perhaps AmiBroker-Fat and
AmiBroker-Skinny their expectations are not and cannot be the
same.
In the first category volumes, market trends,
market analysis, traditional TA, etc. play a minor role in system
design. Their systems can be extremely simple and their trading rules
may be expressed using only half a dozen lines of code while their
automation code may easily exceed 1000 lines. Their trading screen may
only display a lists of tickers with order status: no charts. They work
hard to design and optimize code for maximum execution speed so that to
can get their orders placed before the next quote comes in - speed
translates in profits and 20-40 mSec execution is
typical.
Almost everything for the second category is
reversed: they thrive on traditional TA using many colorful
chart-layouts, perhaps totalling 1000s of lines of code. Their
automation code, if they use it, may just be a a hundred lines
long and aims to save them some typing - not to catch a trade. They use
old (10-20 years!) techniques and statistical analysis that are rehashed
over and over, they thrive on sophisticated analysis to squeeze out a
fraction of a percent more per month (or reduce awful DDs). Code can be
bloated with cosmetic stuff and its OK if it takes 5 minutes to
execute.
Traders from both categories ought to respect each
others.
best regards,
herman
Sunday, May 27, 2007, 5:27:22 AM, you
wrote:
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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@xxxxxxxxcom> wrote:
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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 without 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@yahoo.com> 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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