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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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