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Hi Brian,
One thing you must remember, the market will do what it wants to do
regardless of what system you are using so do not get locked in a mindset
thinking that it should be doing this but its not. I too have seen many
lose a lot of money because what they expected to happen is not. As far as
studies regarding drawdowns, becareful with this as there are many
variables, the systems, the current structure of the market, even the person
trading the system, all these play a big role in what the drawdown could be.
Yes the market does exhibit patterns that repeat over and over, just
remember that even though it has before, IT DOESN'T HAVE TO.
The fact that you say you are getting stopped out left and right says that,
your stops may be too tight. Right now the S&P is very volatile and you may
need more room on your trades for them to work, which requires more risk. I
personally have stopped trading the S&P temporarily for that reason.
You need to be very careful here Brain, because its at this point, where I
have seen people totally get bonked out of the markets. You said that you
are trading for a living, which means you have added pressure on you, do not
rush, do not rush, do not rush, take your time and focus on what is going
on. Learn how your system is trading in regard to the structure of the
market, it may mean you have to do some changing here. And even more
important, do not let it get to your head, the last thing you want to do is
lose your confidence.
Troy
wallst@xxxxxxxx
----- Original Message -----
From: Brian Keith Voiles <admagic@xxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Monday, April 03, 2000 9:15 AM
Subject: [RT] Advice: Draw-Downs for S&P Day Trading System
> My daytrading system for the S&P 500 must be in a draw-down... is there
any
> data,
> studies, or information in general about how long a draw-down period
should
> last? I'm getting stopped out left and right... I've decided to go back
to
> paper
> trading until the draw-down period is over -- hopefully I've got enough
> money in
> reserve to cover my butt in the meantime.
>
> Although the last 5 trading days in March didn't work out very well for me
> (that's
> when my draw-downs started) I still made 260% ROI after commissions and
> other costs.
> In February I made a 464% ROI... with just 1 losing day... a loss of $423.
> In January I made an 83% ROI... with just 1 losing day... a loss of
$2,020.
>
> Now, here we are in the end of March and April and I've lost 31.7 points
> ($7,925)
> in the last 2 trading days... due to getting stopped out from the
> whipsawing in
> the price movement. (My research shows an optimum stop placement to be
> 4.8 points in the S&P -- Risking $1,200 per trade).
>
> I understand draw-downs are inevitable... but being fairly new to this
game
> (just
> under 2 years) I'm concerned because this is how I've been making my
living
> for over a year now. Any advice or suggestions are welcomed.
>
> Warmly,
> Brian Voiles
>
>
>
>
>
>
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