# Is a profit of 100% per year good enough?



## NickF (9 May 2014)

I joined the ASX Game and after 2.5 months, my profit is $50113. I am on position 3109 out of 12059 and as of today, 35.52% of players record a profit. While this is not really an accomplishment to be proud of, I am still in the first third of the herd and it's a confirmation that in the end, skill, knowledge and persistence triumph. I asked not long ago if the players who are in top 100 got there simply because they got lucky or do they have some skill or knowledge that make them special? I was interested about what strategies would any of the top 100 players employ. From the answers I received, people consider many of the players in these positions certainly had their share of luck, as well as doing trading more on the riskier stocks, which may see large swings up and down in their account. On one hand, Flow is maintaining a comfortable top position for many weeks and he/she is very consistent. I don't know who that player is and what his/her strategy is. But, at the moment I don't need to look too far to speak to one of the top 100 players. In fact, all I have to do is to speak with my wife  After convincing her sometimes in March to join the game, which she reluctantly accepted, now she can teach me what the share market is all about... All her experience about the share market started a few years ago, when I lost a few thousands, and I did not impress her with that. In fact, she was getting really annoyed by me pronouncing such words as stock or market in the same sentence  Apart for that, her experience was zero until two months ago. Anyway, after a rough start, when she lost over $2000 in the first few days, she started developing some own theories about why shares go up or down and she started using some very primitive methods of selecting the stocks. The market especially attracted her with the vast amount of money traded and she thought that even if a very small percentage of that could become hers, it would be a nice feeling 
A bit of fundamentals, very little of technical analysis (she claims she does not understand momentum, so it must be a wrong theory, however she replaced the standard momentum with a different kind of momentum, that's really funny, but I can't disclose it) and more focus on feeling the emotions in the market. I don't know how she does that. Anyway, now she is in top 50 and she certainly got much further than I would have expected. I will be watching quite impatiently on what place will she land in the end. But based on results of the last few weeks, she seems to getting hold on this thing and it may not be impossible to reach in long term a profit of 10% per month, conservatively speaking  She's definitely earned much more in the last month and the market was not spectacular... it is true it's only virtual money - but maybe some real money may be involved in the future. Anyway, she really applies herself and when she has time, she spends a long time near the computer and she got to know a lot about many of the companies in the game. She tends to be more of a day trader. She has some preferred companies, which she finds "predictable" and others she is not too pleased about, because she dislikes the fact the company does not have a clear strategy, or even worse, if a company releases a report with errors and has to release a corrected one  And she is very reluctant from taking any advice from me - maybe on good reason 

Nick


----------



## minwa (9 May 2014)

First of all, your paragraphing is not good enough in my opinion. 

If your wife can reach 100% per year with real money consistently for a few years, with a scalable strategy/psychology with low drawdowns and risk of ruin then she will be a superstar trader. However I am getting the feeling that you got her return for 1 or 2 or 3 months and then extrapolated that to get 100% per year..correct me if I'm wrong and that she actually has virtual traded for 1 year ?

Most professional funds do not get anywhere to triple figure % return per year, so whether it is good enough or not is up to you. Does your other investments return anything near 100% pa ? If not, then I would suggest 100% is not only "good enough" but its fantastic..Keep us updated if your wife decides to trade real money, results will most likely be nowhere near her virtual results..


----------



## Wysiwyg (9 May 2014)

If you could screen shot the trades then we could see if they were/are  real winners or not. I don't believe in this years market doubling your account is possible in reality.


----------



## NickF (10 May 2014)

minwa said:


> First of all, your paragraphing is not good enough in my opinion.
> 
> If your wife can reach 100% per year with real money consistently for a few years, with a scalable strategy/psychology with low drawdowns and risk of ruin then she will be a superstar trader. However I am getting the feeling that you got her return for 1 or 2 or 3 months and then extrapolated that to get 100% per year..correct me if I'm wrong and that she actually has virtual traded for 1 year ?
> 
> Most professional funds do not get anywhere to triple figure % return per year, so whether it is good enough or not is up to you. Does your other investments return anything near 100% pa ? If not, then I would suggest 100% is not only "good enough" but its fantastic..Keep us updated if your wife decides to trade real money, results will most likely be nowhere near her virtual results..




Hi Minwa,

You are right, she only started trading in early March and only in the game organised by ASX. So, it's all just the virtual profit for the six weeks, extrapolated to a whole year. My comments were made in a funny note. As you said, it will most likely be a different matter with the added the stress of real losses and with market conditions different from now. However, I think that so far this is a significant result. We'll see if in the future she'll manage to stay on top of earnings.

Cheers,
Nick


----------



## NickF (10 May 2014)

Wysiwyg said:


> If you could screen shot the trades then we could see if they were/are  real winners or not. I don't believe in this years market doubling your account is possible in reality.




Hi Wysiwyg,

Her virtual trades started in March this year and despite her losses in the beginning, she reached (at the moment) a top 50 place in the game. We'll see how far she'll get by the end of the game and later, in future games.
I'll ask her at the end of the game to make a copy of her transactions.

Nick


----------



## galumay (10 May 2014)

NickF said:


> it's a confirmation that in the end, skill, knowledge and persistence triumph.




Gold! Well I guess self confidence is a quality that a gambler needs!


----------



## ROE (10 May 2014)

Great if you can consistently do it with your money, you soon join the billionaire club with 10% return a month.
not many people on the planet can generate that sort of return
but sometimes people confuse luck for skill in a virtual game

I played those game every so often and was actually in the top 10 at some stage but I was just betting all over the place  but when I invest it is a different story


----------



## cynic (10 May 2014)

The last time I "traded" a demo account the balance increased over 50% within my first 20 minutes of "trading". However, I have never achieved anything like that sort of return whilst trading live (nor would I ever expect to do so). It's terribly easy to "trade" boldy when there is no financial impost from failure.

Please note that I have intentionally used quotation marks around the words trade, traded and trading in the above paragraph to emphasize the point that no trades actually took place. Nothing was truly exchanged as there were no assets (e.g. money,securities etc.) in contention, nor were there any counterparties to the transactions! 

In effect demo/game trading isn't actually trading and it would be a serious error to presume otherwise!


----------



## pavilion103 (10 May 2014)

I saw the title of the thread and went and got a chair and some popcorn. This is gonna be fun!


----------



## NickF (10 May 2014)

cynic said:


> The last time I "traded" a demo account the balance increased over 50% within my first 20 minutes of "trading". However, I have never achieved anything like that sort of return whilst trading live (nor would I ever expect to do so). It's terribly easy to "trade" boldy when there is no financial impost from failure.
> 
> Please note that I have intentionally used quotation marks around the words trade, traded and trading in the above paragraph to emphasize the point that no trades actually took place. Nothing was truly exchanged as there were no assets (e.g. money,securities etc.) in contention, nor were there any counterparties to the transactions!
> 
> In effect demo/game trading isn't actually trading and it would be a serious error to presume otherwise!




Let me tell you Mr Cynic,
I put $8500 in the real market after watching the financial news on tv four days in a row, with the view to sell within one or two days. I sold a few month later, at a loss of over 30% of that amount. 
But when I "trade", I am much more careful not to lose money, after all, I have a public reputation to hold. Anyway, maybe I will start trading for real in 2015. After all, we all know trading is more profitable in the years ending in 5, especially compared to the years ending in 0 or 7.

Cheers,
Nick


----------



## luutzu (10 May 2014)

if you start with $10,000 double it every year for next ten year you'll get $10,240,000
if you start with $100K same rate same 10 years, you'll get $102,400,000.

Don' tknow if that's a good enough though


----------



## cynic (10 May 2014)

NickF said:


> Let me tell you Mr Cynic,
> I put $8500 in the real market after watching the financial news on tv four days in a row, with the view to sell within one or two days. I sold a few month later, at a loss of over 30% of that amount.



That's great! You'll definitely understand what I'm talking about then!

So it took you months to lose approximately $3k!

I once managed to lose the AUD equivalent of $110K in a sinlge day!


> But when I "trade", I am much more careful not to lose money, after all, I have a public reputation to hold. Anyway, maybe I will start trading for real in 2015. After all, we all know trading is more profitable in the years ending in 5, especially compared to the years ending in 0 or 7.
> 
> Cheers,
> Nick



Is it? Wouldn't the counterparties to the losing traders make money in those years?


----------



## NickF (10 May 2014)

cynic said:


> That's great! You'll definitely understand what I'm talking about then!
> 
> So it took you months to lose approximately $3k!
> 
> ...




I am not sure if I should feel sorry for you or if I should envy you 
The fact you're still alive and kicking, means you sort of recovered after that black day. 
Can I ask you one question? Are you using a stop loss point now in your transactions? Because I assume you were not using one when you lost 110k...

You're right, only the long investors would be in advantage trading in 2015. 

Nick


----------



## NickF (10 May 2014)

luutzu said:


> if you start with $10,000 double it every year for next ten year you'll get $10,240,000
> if you start with $100K same rate same 10 years, you'll get $102,400,000.
> 
> Don' tknow if that's a good enough though



Yeah, if you put it that way, doesn't sound too bad. 

On the other hand, 10% per month is only 0.33% / day. How many of us are satisfied with making a profit of 0.5% for the day? I know, consistency is also important, if we only could get this profit day after day...

Nick


----------



## cynic (10 May 2014)

NickF said:


> I am not sure if I should feel sorry for you or if I should envy you
> The fact you're still alive and kicking, means you sort of recovered after that black day.
> Can I ask you one question? Are you using a stop loss point now in your transactions? Because I assume you were not using one when you lost 110k...
> 
> ...




On the night in question the circuit breakers triggered causing a premature exchange closure. Nothing but nothing would allow me to exit my open positions until the exchange reopened the following day!!!

These are the sorts of realities that demo/game traders are unlikely to fully appreciate until they trade a real market with real money!


----------



## NickF (10 May 2014)

cynic said:


> On the night in question the circuit breakers triggered causing a premature exchange closure. Nothing but nothing would allow me to exit my open positions until the exchange reopened the following day!!!
> 
> These are the sorts of realities that demo/game traders are unlikely to fully appreciate until they trade a real market with real money!




Yes, that's something really to be kept in mind! 
I just found some good information which claims the Value Line strategy offers very good returns and as presented on the web site http://www.valueline.com/About/Ranking_System.aspx, the returns of the good stocks, as indicated by the method, reached gains of over 30% per year. I wonder if anybody here applies such a strategy, it appears to be excellent - and from the book of Victor Neiderhoffer, Practical Speculation, there are real people who became multimillionaires by applying this strategy. And it seems we don't need to subscribe to any sites for the information, we should be able to pick the good stocks by ourselves.

The more I read all kind of books, the more I wonder how come we aren't all millionaires? Or, maybe I should speak just for myself? 

Nick


----------



## ROE (10 May 2014)

NickF said:


> After all, we all know trading is more profitable in the years ending in 5, especially compared to the years ending in 0 or 7.
> 
> Cheers,
> Nick




Is this some kind of new magic?  because 5 usually lead to hi five where the other number dont rhyme as good ?

Heroes to zero
and seven sound like the seven deadly sins


----------



## DeepState (10 May 2014)

NickF said:


> Yes, that's something really to be kept in mind!
> I just found some good information which claims the Value Line strategy offers very good returns and as presented on the web site http://www.valueline.com/About/Ranking_System.aspx, the returns of the good stocks, as indicated by the method, reached gains of over 30% per year. I wonder if anybody here applies such a strategy, it appears to be excellent - and from the book of Victor Neiderhoffer, Practical Speculation, there are real people who became multimillionaires by applying this strategy. And it seems we don't need to subscribe to any sites for the information, we should be able to pick the good stocks by ourselves.
> 
> The more I read all kind of books, the more I wonder how come we aren't all millionaires? Or, maybe I should speak just for myself?
> ...




Just randomly throwing darts to pick stocks, a strategy called NASA Monkey, also delivered portfolio returns over 30% in a given year over the last twenty years.  It can be applied to Australian stocks or global stocks in developed or emerging markets.  You can use the NASA Monkey method to build concentrated or diverse portfolios.  All of these yielded returns which reached in excess of 30% in any year in the history of the strategy.  As did doing nothing but buying an index ETF or index fund from Vanguard.

Do you actually know what happened to Neiderhoffer?  Not to say he is stupid or anything like it, because he is not.

You probably should speak for yourself on the books thing.  Here's a true story:

In the hamlet of NASA where there were 1,024 NASA Monkeys, the King called all able bodied citizens to a tournament.  Each was given a coin.  It was sudden death.  The king said "toss!" and all loyal subjects tossed.  Anyone who got heads moved on to the next round.  Any who "Failed" were eliminated and watched the tournament from the trees, sometime hurling excrement at the remaining participants.  After maybe ten rounds, a monkey won the tournament, throwing 10 heads in a row.  A total freak event.  A one in a thousand.  

This monkey was renamed Prince NASA Monkey after receiving a peerage.  The rest of the citizens in the hamlet basked in his glory, stunned by his ability to toss 10x Heads in a row when none others could.  The King gave him land, a mansion, horses and a fair (for a monkey) maiden as a wife. Amazon got in touch after hearing about his fame via Twitter.  They offered the Prince a book deal.  A few months later, a new book hit the shelf called "Coin Toss Momentum - A path to riches".  It was a best seller as it promised the prospect of doubling your profit at each step.  The author had done so, so others clearly could too.  Strangely, those who bought the book and tried it out largely failed to repeat the outcome although about one in a thousand did manage to. Furthermore one reader even got 12x in a row and got interviewed on Today on NBC, hailed as the next Prince.  But he went on to set up a $1 bn hedge fund where the cry of "Get me my f%$cking banana" could be heard across the trading floor at regular intervals.  

Every trader was honed to flick coins in every method possible.  Left, right, on the elbow, bounce of the foot, spinning on nose.  These were Rock Stars. Strangely the performance of BananaCoin Asset Management was pretty average over the long term although it had spikes of great performance and poor performance along the way.  Nonetheless, even when the fund shut after an unlucky streak - including a bout of market closure for circuit breaking where $110 million was toasted - he went on to write "Education of a Coin Tosser" which became a best seller.


----------



## NickF (10 May 2014)

DeepState said:


> Just randomly throwing darts to pick stocks, a strategy called NASA Monkey, also delivered portfolio returns over 30% in a given year over the last twenty years.  It can be applied to Australian stocks or global stocks in developed or emerging markets.  You can use the NASA Monkey method to build concentrated or diverse portfolios.  All of these yielded returns which reached in excess of 30% in any year in the history of the strategy.  As did doing nothing but buying an index ETF or index fund from Vanguard.
> 
> Do you actually know what happened to Neiderhoffer?  Not to say he is stupid or anything like it, because he is not.
> 
> ...




True story? That sounds really interesting! Never heard of a book written by a monkey before! And how did he manage to throw so many heads in a row? That requires some serious skill! So, where can I buy this book? 

I've heard about Neiderhoffer going bust about three times. I still consider he knows a lot more than myself in the field and there is something good to learn from him and he probably lost more than I'll ever earn  After all, he is one of the monkey who lost after nine successful coin throws in a row 

About the value line - maybe somebody already put this to test - at the moment I believe there is much more chance a strategy that proved to be successful 95% in the last 30 years to continue to be successful, than a strategy where it's enough to test for one year of past data and it already fails.

Nick


----------



## NickF (10 May 2014)

ROE said:


> Is this some kind of new magic?  because 5 usually lead to hi five where the other number dont rhyme as good ?
> 
> Heroes to zero
> and seven sound like the seven deadly sins




ROE, don't laugh please! I read it in a book, so it must be true!


----------



## NickF (10 May 2014)

NickF said:


> ROE, don't laugh please! I read it in a book, so it must be true!




I decided to check if what I read applied to the Australian stocks, so I loaded All Ordinaries from 1984 (earliest it could be downloaded from Yahoo Finance).

Found out the following: the market lost money in 1987, 1990, 1992, 1994, ended flat in 2000, lost money in 2002, 2008, 2010, 2011. So far, for the last three decades never made money in a year ending in zero 
So far, 2014 appears to be a pretty slow year...

Nick


----------



## DeepState (10 May 2014)

NickF said:


> I decided to check if what I read applied to the Australian stocks, so I loaded All Ordinaries from 1984 (earliest it could be downloaded from Yahoo Finance).
> 
> Found out the following: the market lost money in 1987, 1990, 1992, 1994, ended flat in 2000, lost money in 2002, 2008, 2010, 2011. So far, for the last three decades never made money in a year ending in zero
> So far, 2014 appears to be a pretty slow year...
> ...




Crikey...I thought you were kidding.

So, let me get this straight.  You look at a length of time in the past.  Each year ends in a number 0-9.  These are classified in terms of returns.  Amazingly, the returns to each year end are different.  And, as a result, some do better than average and some do worse.  And then...there is a stock picking system based on that which assumes the past outcome can be extrapolated?  That years ending in 5 will produce better returns than those ending in 0 or 7? BTW, I've checked the stats from S&P500 from 1954 to present day and can tell you that there is absolutely nothing meaningful in it.  It's just another form of combat training the NASA monkeys do.

By the way, I thought I'd hide the identity of the author and the winning book by giving them fictitious characterisations.  But your raising the 5,0 and 7 year observation (which is factually correct in terms of actual outcomes, as one NASA monkey won the tournament and a bunch got wiped out in the first round of the tournament) means that you have probably read the book.  To your credit, it was in an advanced chapter.

Neiderhoffer has probably forgotten more than most of us will ever know.  It is admirable that you are prepared to look at failure and learn from it. Yes, he did throw 9 heads and his tail got blown off into the 12th dimension with the next throw.  If you think there is skill in creating a situation where you can engineer this type of outcome....well, you probably need to read his book again.

As for Value Line, they were definitely on to something in the early years.  But eventually the market figures it out.  Their charts don't show anything for transactions costs for a process which rebalances weekly for a process that targets 6 monthly outcomes. Such a process would churn the portfolio like a kitchen cake mixer.  Nor does it allow for the frictions of tax.  In any case, the efficacy of the key strategy - Timeliness, which can be seen by subtracting the top group return from the bottom group return has turned meaningfully negative since 2000.  That's a time period of 14 complete years.  Given the strategy commenced from the late 1960s, that's a fare sample that has not shown promise and is consistent with strategy erosion. That's the most recent third of the data set.  Any comparison to the S&P500 should be aware that the construction universe is much larger and thus contains a massive small capitalistation bias and is a big driver.

Overall, welcome to the market.  Whilst some the people on the thread and I may disagree with your conclusions/assertions you are definitely prepared to put yourself out there and see what happens, probably learning a little at a time.   Good on you. I hope it works out.


----------



## luutzu (11 May 2014)

NickF said:


> I decided to check if what I read applied to the Australian stocks, so I loaded All Ordinaries from 1984 (earliest it could be downloaded from Yahoo Finance).
> 
> Found out the following: the market lost money in 1987, 1990, 1992, 1994, ended flat in 2000, lost money in 2002, 2008, 2010, 2011. So far, for the last three decades never made money in a year ending in zero
> So far, 2014 appears to be a pretty slow year...
> ...




Nick, are you pulling our legs man. 

Even if those were true, it's the general market that's rising, not any particular stock you are going to pick.

So if you believe that system, then buy the index, not any dozens of stocks... and if a couple dozen trades, you will need to hold onto them for at least the entire year.


----------



## NickF (11 May 2014)

luutzu said:


> Nick, are you pulling our legs man.
> 
> Even if those were true, it's the general market that's rising, not any particular stock you are going to pick.
> 
> So if you believe that system, then buy the index, not any dozens of stocks... and if a couple dozen trades, you will need to hold onto them for at least the entire year.




I wouldn't say I am pulling your legs. I consider this rather to be food for thought. Some people in the past published studies based on the last digit of the year and its statistical significance to the outcome in the market. At that time, it probably appeared to have some statistical significance. I don't know if anybody tried to take advantage of this and if they made any money in case they did.
If you ask me if I'd rather start (long) trading in a good year or a bad year, I would prefer (especially for my moral) a good year. Probably the real answer would be "start trading as soon as possible, it's about the time in the market, not the timing in the market", provided one has a strategy they are pretty confident with - well, as confident as you can be with the stock market.
And I read somewhere in this forum a saying, that a high tide is raising both small boats and big boats - even if you only pick a few shares out of the lot, you probably have better of making more (or losing less) in a good year, compared to a bad year. Just look at 2007-2008 - no matter what you bought in a bad year, you probably ended up losing quite a lot. And even a small statistically significant improvement in a chance should not to be dismissed - I would rather make a profit of 0.1% instead of losing 0.1%. 
There are also more studies, based with what happens when a stock drops x weeks, than raises, etc. Even if they are not (anymore) correct, I think this method of questioning if something gives good results is correct.

Nick


----------



## NickF (11 May 2014)

DeepState said:


> Crikey...I thought you were kidding.
> 
> Overall, welcome to the market.  Whilst some the people on the thread and I may disagree with your conclusions/assertions you are definitely prepared to put yourself out there and see what happens, probably learning a little at a time.   Good on you. I hope it works out.




Thank you DeepState for the comments, they are sensible.

I am in the knowledge accumulation phase - I try to learn and sometimes I make a splash in the forums, while having some fun.
On a serious note - I was most impressed with two of the books of Nick Radge - one was a free e-book, the other one I purchased the e-version. I open wide eyes when I saw that his mechanical strategy of picking stocks actually does show a profit for my chosen portfolio and other portfolios that I picked at random from USA.
I didn't read the books, I just browsed through them - however, I plan to read them carefully, because they are dealing with matters that I'm interested in in a manner that is to my way of thinking.
I am also interested in the turtle traders - system also praised by Nick Radge. Havent got the book yet. I understand Dennis Richard in the end lost heaps of money - so apparently he either deviated from his method, or the market got smarter (after many years).
I read about the theory that the market gets smart quick enough and if a method makes money, it won't make money for too long. I expect this to happen more frequently in the future, with all the smart people and the exponential increase in computing power - but there is probably some hope left for the small fish in the sea. After all, when a perfect system will be invented, there won't be any ripples in the share market - but I think I am quite safe to say that will never happen.

Just a question - is your nickname a statement or an aspiration? 

Nick


----------



## pinkboy (11 May 2014)

As 'Retired' is past tense, I'd say 'DeepState' is a statement. 

pinkboy


----------



## NickF (11 May 2014)

pinkboy said:


> As 'Retired' is past tense, I'd say 'DeepState' is a statement.
> 
> pinkboy




Are you chasing me, pinkboy? 
If he indeed managed to retire young, I will listen more carefully to what he has to say.
If I follow his advice, maybe I will have the chance to retire, some day...


----------



## pinkboy (11 May 2014)

Don't flatter yourself. Actually I'm holding back being relatively new to the forum because your posts would be easy to troll! 


I press the 'New Post' icon and reply to whatever is up at the time. 

RY has some good posts recently. I have been following those who give good, structured and evidence backed 'advice'. 

Your best bet to retiring is to have an end goal, and work backwards from there. Simply saying 'I want to retire' is far too vague. Retire on what income? Retire but working/volunteering part time? Retiring travelling the world on a permanent holiday?  With the end gold in place , work back X years I need this much income and X years I need this much Unencumbered assets etc. Put your strategy in place, and work at it. You might need to be flexible at times, but you will know as you go along whats working and what not. 

Happy investing. 

pinkboy


----------



## NickF (11 May 2014)

pinkboy said:


> Don't flatter yourself. Actually I'm holding back being relatively new to the forum because your posts would be easy to troll!
> 
> I press the 'New Post' icon and reply to whatever is up at the time.
> 
> ...




I want to retire and travel the world. Some wise people say that most of us dream small and we reach our goal. Better dream really big and even if we only get half way through our goal, we'll still be better off than in the first place 

Who is RY? Looked up in the forum list for somebody named RY and could not find one. Could you please point me to him? I also want to learn.

Nick


----------



## pinkboy (11 May 2014)

Might want to work on a few IQ points before getting into pips and ticks.....

pinkboy


----------



## NickF (11 May 2014)

pinkboy said:


> Might want to work on a few IQ points before getting into pips and ticks.....
> 
> pinkboy




But Warren Buffet told me I don't need any more IQ points than I already have in order to be a successful trader. Do you imply he lied to me?

Nick


----------



## NickF (11 May 2014)

pinkboy said:


> Might want to work on a few IQ points before getting into pips and ticks.....
> 
> pinkboy




Ugh, I finally got it! RY is DeepState  Who said there is no hope for the less bright of us?

Some extremely rich guy was giving the following test to check the people who wanted to work for him:

OTTFW 

and was asking them to tell what follows next. If those guys gave the right answer too soon, he would not hire them, because they were too smart. If they took too long to answer or were giving the wrong answer, he wasn't hiring them, because they were too stupid to work for him 

Nick


----------



## DeepState (11 May 2014)

NickF said:


> But Warren Buffet told me I don't need any more IQ points than I already have in order to be a successful trader. Do you imply he lied to me?
> 
> Nick




He lied, or you have a faulty recollection.  It could be both.  Buffett said you don't need more than 130 IQ points to invest successfully.  Beyond that, trade it in for temperament.


----------



## DeepState (11 May 2014)

NickF said:


> Are you chasing me, pinkboy?
> If he indeed managed to retire young, I will listen more carefully to what he has to say.
> If I follow his advice, maybe I will have the chance to retire, some day...




I dinged the bell shortly after my 40th birthday. In line with my BS plan at 21 yrs when we were sitting around daydreaming about what the future would bring for us.

Everybody has a chance to retire (well).  It's a question of probability.  At the moment, I'd back the NASA monkeys will produce superior results relative to the stuff you are posting up.  I'm actually not kidding.

You might benefit from just taking a course on introductory investments.  It will give structure to your thinking.  You can ultimately discard everything that was taught, but the process of arguing against the prevailing orthodoxy will kick the daylights out of learning from a hotch-potch collection of books and dumping snippets from supposed oracles or surfing the net. No-one here is saying you need a PhD. Ultimately you'll need to enter the market to learn and hone your beliefs.

Take the time to at least get some basics.  You are asking to be killed at the moment.  Personally, I don't know you and, like others, would be very pleased to relieve you of some money legally via the market....if you want to step in.  But don't do it until you are fit - or you'll just be one of those fodder WWF wrestlers they used to send in to match up against Randy "Macho Man" Savage and just get pile driven into the canvas whilst he waltzes off with Elizabeth.   Damn he was good. RIP.


----------



## burglar (11 May 2014)

How harsh do you need to be to prevent newbies losing money?


----------



## pinkboy (11 May 2014)

burglar said:


> How harsh do you need to be to prevent newbies losing money?




It depends. If they are willing to accept some harsh criticisms then you can shoot straight. Problem is some newbies are a little bit precious and get scared away from the forum and the whole game due to being what they feel 'degraded'. Gotta find that balance. Everyone's psychy is different, and add the extra emotion attached to 'money', and you have a plethora of personality types to cater for. 

pinkboy


----------



## NickF (11 May 2014)

DeepState said:


> He lied, or you have a faulty recollection.  It could be both.  Buffett said you don't need more than 130 IQ points to invest successfully.  Beyond that, trade it in for temperament.




"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."

So, I understand that my IQ of 70 is good enough to beat at the market the guy with IQ of 160 if I apply well my knowledge in the market.


----------



## NickF (11 May 2014)

Damn RY, you are eroding my hopes of starting a hedge fund with my relatives and friends money...
I don't know how you figured me out so well, so soon, it's true my mind is quite random most of the times. I think it's my high IQ, which sees too many opportunities... Luckily my memory is poor, so they compensate each other...
Thanks for the advice.

Nick




DeepState said:


> I dinged the bell shortly after my 40th birthday. In line with my BS plan at 21 yrs when we were sitting around daydreaming about what the future would bring for us.
> 
> Everybody has a chance to retire (well).  It's a question of probability.  At the moment, I'd back the NASA monkeys will produce superior results relative to the stuff you are posting up.  I'm actually not kidding.
> 
> ...


----------



## pinkboy (11 May 2014)

DeepState said:


> I dinged the bell shortly after my 40th birthday. In line with my BS plan at 21 yrs when we were sitting around daydreaming about what the future would bring for us.
> 
> Everybody has a chance to retire (well).  It's a question of probability.  At the moment, I'd back the NASA monkeys will produce superior results relative to the stuff you are posting up.  I'm actually not kidding.




Pretty sage advice here. I'm not sure how old you are NickF, but it's never too early to start daydreaming about retiring, but you have to look to more conventional ways to get there balancing cash flow and growth. 

I was 21 as well BS dreaming about getting to my end goal of retiring. At 22 I started my current business and it has served me very well. I'm 31, and I'm nearly ready to ring the bell as well. And I can assure you, my IQ is not high (I'm a thinner-sniffing spray painter), and I've probably lost a few points along the way with my life/business/family demands over that period. I'm just glad I still have all the hair on my head. 

So maybe look not to think outside the box with your investing until you can afford to lose that cash. That way there's no problem if you lose it, but if it pays off all good and well. 

pinkboy


----------



## NickF (11 May 2014)

Give it to me, all what you can, I can handle much more than that 
My skin is tough, like a Rhinoceros'. As long as I lean something along the way.
I advance the quickest in my learning from kicks in the ass 

Nick



pinkboy said:


> It depends. If they are willing to accept some harsh criticisms then you can shoot straight. Problem is some newbies are a little bit precious and get scared away from the forum and the whole game due to being what they feel 'degraded'. Gotta find that balance. Everyone's psychy is different, and add the extra emotion attached to 'money', and you have a plethora of personality types to cater for.
> 
> pinkboy


----------



## NickF (11 May 2014)

pinkboy said:


> Pretty sage advice here. I'm not sure how old you are NickF, but it's never too early to start daydreaming about retiring, but you have to look to more conventional ways to get there balancing cash flow and growth.
> 
> I was 21 as well BS dreaming about getting to my end goal of retiring. At 22 I started my current business and it has served me very well. I'm 31, and I'm nearly ready to ring the bell as well. And I can assure you, my IQ is not high (I'm a thinner-sniffing spray painter), and I've probably lost a few points along the way with my life/business/family demands over that period. I'm just glad I still have all the hair on my head.
> 
> ...




I'm 46, but I'm aware I can learn from anybody from 5yo upwards 

As they say, a wise man leans more from a stupid question than a stupid man from a wise answer 

PS - what's that a BS plan? The only BS I know doesn't seem to fit well in the context...

I think I read some of your posts, I remember about that painting business of yours.

Nick


----------



## DeepState (11 May 2014)

NickF said:


> "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."
> 
> So, I understand that my IQ of 70 is good enough to beat at the market the guy with IQ of 160 if I apply well my knowledge in the market.




Actually, he said that you could sell your IQ points above the 120-130 mark.  But he said you need at least 'ordinary' intelligence.  Your score of 70 is into the retardation realms.

But you knew that already.  NickF these posts have been sensational to fish us out and an outstanding parody. I love it.  Pure rocking comedic genius.  Glad you are here. Your IQ is obviously considerably higher than 70.

Mate, how long have you actually been investing for?  Because it is considerably longer than your 'wife'.


----------



## NickF (11 May 2014)

DeepState said:


> Actually, he said that you could sell your IQ points above the 120-130 mark.  But he said you need at least 'ordinary' intelligence.  Your score of 70 is into the retardation realms.
> 
> But you knew that already.  NickF these posts have been sensational to fish us out and an outstanding parody. I love it.  Pure rocking comedic genius.  Glad you are here. Your IQ is obviously considerably higher than 70.
> 
> Mate, how long have you actually been investing for?  Because it is considerably longer than your 'wife'.




RY,

I wrote somewhere on the forum a bit about my experience in the share market. I arrived in Australia in 98 from Eastern Europe. Got a job on Central Coast in 99, where my boss and some friends of his were playing the share market, probably not making more than losing. I started playing as well with little money, like $1000-2000. Since then, I probably made a total of about 10 transactions, all but one before 2004. I only traded little money, because I did not want to risk too much and anyway, I did not have much to spare. Unfortunately for me, I was shortsighted and didn't really focus on learning the skills to make money in the market. All what I learnt is that it is quite difficult to sleep at night while being in red and not knowing what will happen with the money next day. Luckily I don't consider myself to be a gambler, so I was able to stop making bad transactions at will. I've done some of the common beginner errors - getting too soon out after making a tiny profit, not cutting the loss soon enough, not having even idea about risk management or portfolio diversification - anyway I would have not been able to diversify at that time - and I still can't. I only had one big win, a 40% increase from Friday to Monday when I traded some smaller stock after I identified progressive growth in volume and price over the last week, and this was just pure luck. Nobody can probably say that any one trade going up or down is due to skill and not luck. And probably my total losses from back then are less than $1000. At that time I was not married. Last time I lost money when I placed that $8500 in the market around 2008, after I thought the market reached the bottom. I was watching the news and every day CBA was growing a few percent and I wanted to awaken the interest of my wife in the sharemarket - I wanted to prove her that in a few days I can make an earning in the share market as big as the interest rate for a whole year - no need to tell me I was foolish  She is very conservative and has (had) a pronounced risk aversion. I think she was right - at that time we were renting and saving money for buying a house. All I wanted was her to start looking into the share market, to learn. While I hope my IQ is somewhere above 120 (weight averaging a wide range of results, between 100 and 140+), usually she scores around 15 points above me, if we try together some tests. Anyway, her great quality is that she can fully apply herself when she gets involved in a field and she likes learning. What I wrote in my first post is sort of true, excepting the blown out of proportion statements and extrapolations based on little facts. While, as people say, the fact she got in a top 50 place could be pure luck and probably is (she may drop significantly in a few days or weeks), it's sort of in line with her capacity of applying herself and getting high marks. At the moment she is not working, preparing for an accounting diploma. Since 2006 I live and work in Sydney. We managed to fully pay the house we purchased in Western Sydney and have a bit of savings. She got interested in the share market after I told her about the ASX game and since I was the instigator, I am willing to let her try her luck in the future, trading with a loss of one or two thousands, as long as she will use a strict stop loss. I am confident that if she loses money, it will be a lot more painful for her than for me and she will either get out of it completely (which I hope not), or decide she needs to learn a lot more before going back again. At the moment she appears to be at the stage where she believes in her Supertrader ability and she does not even want to listen to my advice for her to read more - she does not want her way to get influenced by knowledge that's already out there 
From an optimal point of view, I believe that considering the amount of savings we have, the ideal situation is for both of us continue working (at least until getting something around a few hundred thousands), otherwise she would have to be more than a genius to make close enough to the minimum wage using our savings. I don't expect to be able to retire sooner than others, but I still have some hope left.
Again I praise the information I get from Nick Radge, even his last set of emails "Earn a second income" clearly shows the advantage of having a full job and doing invesments aside. I wish I had discovered him earlier.
At this moment, I am aware about my limited knowledge and I try to put more time in reading. I believe I have some discernment about picking he right information from the lots I read - I may be wrong, but the more I read, the more I learn to sort good from bad. At the moment I tend to give the highest chances to a mechanical trading method - I trust more backtesting followed by some paper trading, than using our emotionally affected decisions. 
 I wish I could follow your advice about taking a course. Between me and my wife, she'd probably benefit more from it, because she'd be more serious about it. We are in a decent position from a financial point of view (no debt and some savings) and it's a good time for us to consider the share market, for the future. 
I am open to advice and I am open to having my opinions changed.

Cheers,
Nick


----------



## McLovin (11 May 2014)

DeepState said:


> Actually, he said that you could sell your IQ points above the 120-130 mark.  But he said you need at least 'ordinary' intelligence.  Your score of 70 is into the retardation realms.
> 
> But you knew that already.  NickF these posts have been sensational to fish us out and an outstanding parody. I love it.  Pure rocking comedic genius.  Glad you are here. Your IQ is obviously considerably higher than 70.
> 
> Mate, how long have you actually been investing for?  Because it is considerably longer than your 'wife'.




You're new here. It's pretty common. 

The old RTA learner test was designed so that someone with an IQ above 80 could pass. I'd say if you can type cogently on an IBB (even without having learnt about paragraphs) your IQ is north of 80.


----------



## NickF (11 May 2014)

pinkboy said:


> Pretty sage advice here. I'm not sure how old you are NickF, but it's never too early to start daydreaming about retiring, but you have to look to more conventional ways to get there balancing cash flow and growth.
> 
> I'm 31, and I'm nearly ready to ring the bell as well. And I can assure you, my IQ is not high (I'm a thinner-sniffing spray painter), and I've probably lost a few points along the way with my life/business/family demands over that period.
> pinkboy




Nice to hear that and I wish you good luck with your plans.
I wish I could emulate your success pinkboy, but I am really skeptical that thinner sniffing will help me advance in my endeavour of being successful in the share market or retiring early.

Nick


----------



## NickF (11 May 2014)

McLovin said:


> You're new here. It's pretty common.
> 
> The old RTA learner test was designed so that someone with an IQ above 80 could pass. I'd say if you can type cogently on an IBB (even without having learnt about paragraphs) your IQ is north of 80.




Bloody hell, you're the second person within last week to criticize me for the lack of paragraphs.
I am so deep, people need to dilute the information I provide, since it's too concentrated.

I will use more blank lines from now. Thanks for pointing that out.

Nick


----------



## DeepState (11 May 2014)

NickF said:


> RY,
> 
> Cheers,
> Nick




Hi Nick

It's great to know a little more of the story and it's a wonderful one.  I was very impressed by the way you were posting ridiculous ideas and then, masterfully, producing half truths and deliberate 'mistakes'.  It requires a reasonable knowledge of things and the behavior of forum posters to have done that.  I was very impressed.  I had fun.  Thanks.  If you want, we can keep playing the game and I'll slag you off with force and similes. Abbott and Costello. You can always know it comes with humour underneath and hopefully something useful too.  And the viewers might be entertained.

Your idea of producing some method to remove the emotional side is admirable if you feel that a non-systematic process will unhinge you.  Your staging to go from a backtest through to paper and then real with a stop is a great set of steps.  With your mention of Nick Radge and some other things, I only suggest that you do not place too much weight on a backtest.  If you do 100 of them 5 will be sensational.  The same result could be produced by my NASA monkeys (code for random noise).  You might wish to add another screen which checks for economic rationale.  Figure out why this result is a reflection of reality and likely to be an ongoing source of success.  That Value Line stuff (good find) was rocket science in its day and had a lot of economic rationale behind it.  What's the next one?  It is probably too much to ask to actually get into the accounts and check that this rationale actually passed into fundamentals, but checking for plausible economic rationale is more important than a back test.  I was a fund manager in a massive shop which did this sort of thing amongst others.  We would not hesitate to override a crap backtest if we saw strong economic rationale for a strategy.  

Keep it coming you Rhino.


----------



## NickF (12 May 2014)

DeepState said:


> Hi Nick
> 
> It's great to know a little more of the story and it's a wonderful one.  I was very impressed by the way you were posting ridiculous ideas and then, masterfully, producing half truths and deliberate 'mistakes'.  It requires a reasonable knowledge of things and the behavior of forum posters to have done that.  I was very impressed.  I had fun.  Thanks.  If you want, we can keep playing the game and I'll slag you off with force and similes. Abbott and Costello. You can always know it comes with humour underneath and hopefully something useful too.  And the viewers might be entertained.
> 
> Keep it coming you Rhino.




Thanks RY,

It's nice to know you have a lot of experience in the field and you're willing to help the "Average Joe".
I am aware I leave myself open to ridicule and risk have others laugh at myself.
I don't mind it. In the past I got hurt on some forums, but I should have been more open minded. 
After all, I asked for trouble and I should have not been so surprised for getting it 
Also, if I'm biting back at others, it's just a game, so don't get offended.

One question - I find Amibroker a great software. But so far I don't know if the software is able to deal with financial data of companies - PE Ratio, etc. Can it? It would be interesting to be able to backtest depending on some of these financial parameters.

Nick


----------



## minwa (12 May 2014)

DeepState said:


> I dinged the bell shortly after my 40th birthday. In line with my BS plan at 21 yrs when we were sitting around daydreaming about what the future would bring for us.




I found that fascinating...that you reached target at/very near what you planned. 

I met a couple who gave themselves 5 years to reach X level of income through internet business, they ended up doing a lot but not achieving much in the first 4.5 years, the last 0.5 years they did the "work" they had to do and reached their goal by 5 years mark..

I sat (setted ?) some goals when I was 19 for when I am 25, I am now 23 and on target to reach those goals by 25.

RY, I wonder what could've have happened to you if you planned retirement at age 35 or 30, instead of 40. Would you have subconsciously worked harder/smarter to reach that goal as well ? Still, I am sure you are very happy financially where you are, and I congratulate you for that.


----------



## DeepState (12 May 2014)

minwa said:


> RY, I wonder what could've have happened to you if you planned retirement at age 35 or 30, instead of 40. Would you have subconsciously worked harder/smarter to reach that goal as well ? Still, I am sure you are very happy financially where you are, and I congratulate you for that.




Hi Minwa

I worked as hard as I could and did it as smartly as I could the whole time.  In reality, I passed most of the types of financial goals mentioned in this forum, $1m etc, by around 28 and just kept going because we tend to be highly driven at that sort of age, although exceptions do occur. 

There was no particular monetary target. 'More' was the right number. By 40 it just turned out that we had more than we would likely ever use. So the aim to retire at 40 was totally BS, in my case.  It was the kind of crap a bunch of young, ambitious, kids in Uni would say because we were cocky, strutting and full or ourselves.  I could not have done anything more to achieve whatever I did at 30 or 35 and stay within my comfort zone.  The monetary rewards just came out as they did.

Nonetheless, without an aim and a plan, I tend to do nothing. Although plans will change, your underlying aims might not.  All the best with achieving yours.

Cheers


----------



## NickF (13 May 2014)

NickF said:


> Ugh, I finally got it! RY is DeepState  Who said there is no hope for the less bright of us?
> 
> Some extremely rich guy was giving the following test to check the people who wanted to work for him:
> 
> ...




I am sorry for causing confusion, I made a mistake in the above post. The rich guy I mentioned was Onassis and the test he was using was something like OTTFFS (not OTTFW). 

I also suspect I should have used compensated my self-evaluated IQ score for the well known male ego bias, which adds around 10 IQ points to the real score. Some of us believe to be brighter than we really are 

At least, I am trying to use what I learnt (using paragraphs in posts, that is). By the way, RY, applying the George Constanza strategy in Forex seems to work well. I already halved my losses 

Nick


----------



## DeepState (13 May 2014)

NickF said:


> By the way, RY, applying the George Constanza strategy in Forex seems to work well. I already halved my losses
> 
> Nick




Whatever it takes Nick!


----------



## DeepState (13 May 2014)

NickF said:


> Thanks RY,
> 
> It's nice to know you have a lot of experience in the field and you're willing to help the "Average Joe".
> I am aware I leave myself open to ridicule and risk have others laugh at myself.
> ...




Hi Nick

You know, I admire you. Almost as much as my herd of NASA monkeys. In this industry, I have found, it's not the smartest or hardest working who succeed.  They tend to be perfectionists in a field where there is no such thing as perfection.  Instead, the winners (at least in equities and FX) tend to be those who can figure out why the market thinks what it thinks - even if it is utterly stupid - and those who can handle enormous damage to themselves from ridicule, losses and self-doubt. They just keep coming back as if nothing happened without bothering to dust themselves off. Being half rhino puts you at a great advantage.  In fixed income structuring, you need to be a rocket scientist's rocket scientist as well though.

I cannot help you with Amibroker.  Not that I don't want to.  I just don't use it.  Lots of others on this site seem to though.  Perhaps you can whack a search in and see what comes up or start a thread?

Let me know if there is something else I can help you with.

Cheers


----------



## NickF (14 May 2014)

DeepState said:


> Whatever it takes Nick!




Hmm, the George Constanza strategy appears to have lost its edge. It doesn't take long for a successful strategy to wear out, especially if it's widely publicized!

Nick


----------



## DeepState (14 May 2014)

NickF said:


> Hmm, the George Constanza strategy appears to have lost its edge. It doesn't take long for a successful strategy to wear out, especially if it's widely publicized!
> 
> Nick




Did you lose the faith and revert back to Normal George instead of Opposite George?  "Act as if" Nick!!


----------



## NickF (14 May 2014)

DeepState said:


> Hi Nick
> I cannot help you with Amibroker.  Not that I don't want to.  I just don't use it.  Lots of others on this site seem to though.  Perhaps you can whack a search in and see what comes up or start a thread?
> 
> Let me know if there is something else I can help you with.
> ...




No worries RY, the answer was just a click away, using google. They offer the possibility to download the financial info and it can also be used in scripts, using the function GetFnData.
Do you use any software to monitor the shares prices?

By the way, I am not sure you discussed about your strategy somewhere on the forum, probably you did, but I don't know where.
Are you still trading? Do you trade long term, short term? Do you go both long and short?
In case you do, what is your definition for a successful year, profit-wise? How about a bad year, are you still on positive or go under? What are the selection criteria that brought success to you? More financial orientated or more TA, or a combination of both? For long, do you have a predefined stop loss and sell point, or how do you decide when to sell at a loss or when to take the profit?
Sorry if I'm being too nosy 

Nick


----------



## NickF (14 May 2014)

DeepState said:


> Did you lose the faith and revert back to Normal George instead of Opposite George?  "Act as if" Nick!!



I am playing in my Forex virtual account and I am just placing buy and sell orders, with very little analysis. Which is probably the worst thing I can do - there are no useful conclusions from this activity and it's just time wasting. 

I am trying to set a stop loss smaller than my target profit, but sometimes the price gets close to my target and then goes back and eventually it reaches my stop loss point, and then I regret for not having set a more achievable target, or at least moved the stop loss point. I should focus more to try a strategy and be more patient, wait for a moment in time where the chart talks to me. 

I read an interview from Nick Radge, with a successful Forex trader, who said he goes into a trade setting a stop loss at -33 pips and sells for a profit only if price reaches at least 130 pips or so. He has a success rate of only 25%, but he is profitable overall and a transaction takes on average less than 10 days.

I think I should focus on finding a strategy that gives good results in backtesting and then try it. If the strategy fails badly in backtesting, there is not much point to spend time trying it in practice. The best way to get rich is quick 

I am not really a fan of Forex, I consider it (even) more unpredictable than the share market. Besides, my gain would be somebody else's loss, more than the share market. However, I can use it live when I come back from work and I can check if there are such things as resistance and support levels and get a feel for charts and learn a bit of theory about candlesticks - not convinced if they are useful or not, I've read both pro and against them.
And I'll also get a bit of knowledge about Forex.

Nick


----------



## DeepState (15 May 2014)

NickF said:


> 1. I am playing in my Forex virtual account and I am just placing buy and sell orders, with very little analysis. Which is probably the worst thing I can do - there are no useful conclusions from this activity and it's just time wasting.
> 
> 2. I am trying to set a stop loss smaller than my target profit, but sometimes the price gets close to my target and then goes back and eventually it reaches my stop loss point, and then I regret for not having set a more achievable target, or at least moved the stop loss point. I should focus more to try a strategy and be more patient, wait for a moment in time where the chart talks to me.
> 
> ...




Hi Nick

1. You must know that doing so produces zero edge less expenses and spread.  Your expected profit from flipping coins like this is zero...and then you pay for the privilege.

2. All these rules don't convert lack of prediction into sustainably positive outcomes.  Setting stops and profit points does not make money.  Insight does.  All this stop and limit stuff does is change the distribution of the way you get random returns.  Do you get lots of small losses and a few big wins?  Or do you get 50/50 and wins/losses roughly equally distributed?  In the end, without an edge, they end up at the same point....zero less expenses.

If Nick Radge made money sustainably, he did so because he had an insight. All the rest is just risk management and 'bending the distribution'. Alternatives to this include:
- He was bloody lucky.  A NASA Monkey who can write books...I have a couple myself.
- He made money by market making, but writes books and trains people on technical trading because that sells books and gets people along to his training company;
- He's just making it up.

His book keeps getting mentioned as some sort of bible in this place.  I guess I better read it and see if he has any mojo.  I have worked with a ton of very successful investors...only one of the massive bunch used anything like the stuff talked about in this place.  He was a fixed income guy and he used Bollinger Bands.  I have never seen anyone including our dealers use support/resistance, flags, candle sticks,... although some stops are used in an aggregate portfolio sense. I'd never heard of anything like a 20% Flipper or Grail for example.

3.  Getting rich quick is better than getting there slowly.  The point, though, is to get rich at all.
"I've been rich and I've been poor.  Rich is better" - Sophie Tucker.

4. FOREX is generally regarded as the toughest market to make money in.  Even though there are hedgers and central banks in there who are not profit motivated, it's not as if they intend to lose money either and their presence does not actually make it easier to garner profit.  But their accessibility via the CFD guys and futures brokers and small spreads make them attractive for retail speculators. Retail participation in the market has risen and is around 3% of the market now. 

Cheers


----------



## minwa (15 May 2014)

DeepState said:


> His book keeps getting mentioned as some sort of bible in this place.  I guess I better read it and see if he has any mojo.  I have worked with a ton of very successful investors...only one of the massive bunch used anything like the stuff talked about in this place.  He was a fixed income guy and he used Bollinger Bands.  I have never seen anyone including our dealers use support/resistance, flags, candle sticks,... although some stops are used in an aggregate portfolio sense. I'd never heard of anything like a 20% Flipper or Grail for example.




He seems like a good marketer, however I cannot find any results from any of his systems. I treat him like all other vendors until he provides some audited results..


----------



## NickF (15 May 2014)

minwa said:


> He seems like a good marketer, however I cannot find any results from any of his systems. I treat him like all other vendors until he provides some audited results..




Hi Minwa,

Do you use Amibroker? Do you do backtesting? Do you have any system which you can backtest and it gives positive results when you run it for, let's say 10 years in various markets, without changing any parameters (US, AU).

It is true that I'm a beginner and have little experience, but until I've heard of him, I didn't know about any Technical Analysis  systems that return in backtesting a good 10...25% per annum. 
It's true that I have not used the system, not even to pick stocks for the ASX game - the system finds stocks quite rarely and its profits are generated in a matter of months sometimes - so I find the system improper for the game, which lasts three months.

I don't know if anybody checked the system in real world and if it works, but so far, this is the system I have the highest confidence in. I understand it is similar with the system used by the turtle traders, but much simpler. It has a strict strategy and it performs reasonably well without changing any parameters when going in different markets. Here is a screenshot of performance in for ASX (stocks from the game). I slightly modified the formulas, but I rather added some extra restrictive conditions (minimum liquidity and minimum volume).

The screenshot is a backtest between 01/01/2000 to 01/05/2010. If I run it until 01/05/2014, it indicates a total equity of $640500.




Cheers,
Nick


----------



## NickF (15 May 2014)

DeepState said:


> Hi Nick
> 
> 1. You must know that doing so produces zero edge less expenses and spread.  Your expected profit from flipping coins like this is zero...and then you pay for the privilege.
> 
> ...




Thank you RY for all the comments.

Nick


----------



## minwa (16 May 2014)

NickF said:


> Hi Minwa,
> 
> Do you use Amibroker? Do you do backtesting? Do you have any system which you can backtest and it gives positive results when you run it for, let's say 10 years in various markets, without changing any parameters (US, AU).
> 
> ...




Hey Nick thanks for posting that. 

That system is not really robust, you can clearly it just follows the general share market. Overlay the equity with SPX or XJO and you can see the correlation. 2000 to about 2003 it was pretty much breakeven while shares were in bear market. Then it just followed shares great bull market until 2008 bear market where the equity just falls with the bear market. 

Back tests ignores the trader psychology fact, would you have kept trading after 2000-2003, a period of THREE years where you made some equity gains then lost it back and it just chopped around breakeven. I believe you will need real faith to keep trading such a system for 3 years not making anything before it can realize its potential in the bull market. Drawdown of 31% is pretty high too, you will also need real faith to trade through that. Easy for back test as in hindsight you can see it recovered with the bull market. What if the bull market didn't come in stocks ? Would you have the patience to trade through the drawdown for a few more years ?

You can see why I don't like theoretical back test. I don't use Amibroker or code systems as I don't use indicators and my psychology cannot be coded into a back test, I know I personally cannot stand trade such a system where draw down (to me sideways equity is also draw down) periods are that long. 

I posted my real accounts trading results for this year and last year in other threads you can look that up. To me real results and theoretical back test are very different things. I'm sure any vendor still trades or at least traded any systems they sell with real money, if they cannot share their results then that shoots up red flags and will definitely not be getting my money. If they don't back the system by putting their own money to the system to trade it themselves, I will not trade it even if they gave me the system for free.


----------



## Wysiwyg (16 May 2014)

minwa said:


> Back tests ignores the trader psychology fact, would you have kept trading after 2000-2003, a period of THREE years where you made some equity gains then lost it back and it just chopped around breakeven.
> 
> You can see why I don't like theoretical back test. I don't use Amibroker or code systems as I don't use indicators and my psychology cannot be coded into a back test, I know I personally cannot stand trade such a system where draw down (to me sideways equity is also draw down) periods are that long.



Yes that is the reality of these backtests, especially so far back in time when survivorship bias really kicks in. I backtest and forward test for two years or less from present time for some semblance of a possible real outcome. The result data doesn't have the big returns and mountainous equity charts but we want to compile systems that are at least a guide to possible positive outcomes and I believe the closer to present time test reduces the falsity of survivorship. No dream weaving necessary.


----------



## NickF (16 May 2014)

minwa said:


> Hey Nick thanks for posting that.
> 
> That system is not really robust, you can clearly it just follows the general share market. Overlay the equity with SPX or XJO and you can see the correlation. 2000 to about 2003 it was pretty much breakeven while shares were in bear market. Then it just followed shares great bull market until 2008 bear market where the equity just falls with the bear market.
> 
> ...




Hi Minwa,

Thanks for sharing your opinion about the system, you offered me a fresh view on it. There is obviously a correlation between the performance of the market and the performance of the system. I would be surprised not to see a correlation between a strong year and good returns (especially for long trading).

Your comments about psychology of the trader are indeed critical for the success or failure of the system. Richard Dennis said to his students that he could post in the newspaper his proven, successful trading method (and all people who used it strictly back then, apparently made like 80% pa). And despite this, probably nobody would have used it, because they would have not trusted the method.

You're right about the drawdown, which is most likely unacceptably high to most people and probably a way should be found to avoid such a high drawdown, even if it will probably impact significantly the overall profit. As it is, the method shows an average of 21% pa. 

Of course, some people have their own systems, which are net superior to this one. Probably nothing can beat a good brain. But there are also many other people who lose more money than they put in and this can happen for years and years, if they use a bad method or no method. So, considering this is a simple method and does not require any research, I still like it. Of course, if I find something better, I will go for that.

About big drawdowns - my superannuation fund dropped about 35% during the GFC, if I remember correctly. I calculated back then, it should increase like 50% in order to get back to the funds I had earlier. And I was wondering, how come the experts at the helm of the fund did not do anything to avoid such a big drowdown. I was explained that their strategy is to keep the money in for the long term, no matter what happens, because long term, there is always a profit to be made. Even I could probably do better than that, by buying 20 good stocks. I saw about two months ago an interview with a guy who publishes yearly a book about good stocks in Australia and he described how his system picks the stocks, based on strict requirements - every year there are about 100 stocks that come up and they outperform the XAO, XJO, etc.

I will definitely look to see your posted results, I am very interested to see what your performance is.

Cheers,
Nick


----------



## NickF (17 May 2014)

DeepState said:


> 4. FOREX is generally regarded as the toughest market to make money in.  Even though there are hedgers and central banks in there who are not profit motivated, it's not as if they intend to lose money either and their presence does not actually make it easier to garner profit.  But their accessibility via the CFD guys and futures brokers and small spreads make them attractive for retail speculators. Retail participation in the market has risen and is around 3% of the market now.
> Cheers




Hi RY,

I applied all kind or random strategies, based on guessing and luck and so far I was able to come back in black in my virtual Forex account. I am usually playing with small amounts, around 10k. When I had higher losses, I was more aggressive, tried with 100k, but I lost quite a bit really fast. I'll see if I manage to keep my trades up - it doesn't matter if the profit it's small, I'm just curious if I can show some consistency. I started my Forex account  on 04/05/2014 and up to today, I've done 98 trades. Some of them were automated trades, which didn't go too well. On other trades, I wanted to do some things and ended up doing something else because I didn't know how the software works. 

Arguably, I am still not an expert at Forex - but I am proud I discovered all by myself that XAU means gold, after I noticed the symbol XAG 
I am yet to discover what CHF means, I wreckon is some sort of Chinese Franc...

Cheers,
Nick


----------



## DJG (17 May 2014)

CHF = Swiss Franc


----------



## NickF (17 May 2014)

DJG said:


> CHF = Swiss Franc




Thank you Dangaff,

Now I have all the information I need to become a successful Forex trader. 

Nick


----------



## CanOz (19 May 2014)

How about we discuss the 20% Flipper?... happy to post some equity curves or stats from this. Its been quite successful since released, it is a long only trend following system. Seems pretty robust to me.


----------



## CanOz (19 May 2014)

I have a report from Nick on the US Power Setups, done on Stator showing closed trade results. I'm not going to post it as i don't have permission. But anyone can ask Nick for trade reports. The last time i was on collective2 the Flipper and the stats were there.

The subscription to the US power setups costs me like 20 bucks a months, i get FX futures and equities. There are no secrets in the stuff, its not a holy grail and the returns are just solid profits OVER TIME. Sounds like you've been burned Minwa? Did you get into a draw-down or something? I can understand that you'd be upset, so was my wife when another managed account we have went into drawdown, it happens....


----------



## craft (19 May 2014)

CanOz said:


> How about we discuss the 20% Flipper?... happy to post some equity curves or stats from this. Its been quite successful since released, it is a long only trend following system. Seems pretty robust to me.




What will _cause_ it to be profitable in the future?


----------



## CanOz (19 May 2014)

craft said:


> What will _cause_ it to be profitable in the future?




The logic behind it is very robust and its not curve fit. Its pretty simple, for an equity to become a multibagger it must first increase 20% in value. If it has done this after a 20% decline in value it must be a strong stock. Throw in an index filter and some exit logic and it becomes a very robust trend following system for End of Day trading. Most of Nick's systems are based on very simple logic that stands the test of time. Its tests well over all the data i have (20 years+) and its also walked forward very well for the last two years. Nothing wrong with that.

Now lets think of what might cause it to be less than ideal or unprofitable? 
-no trend (think ASX recently)
-no growth in small caps
-range bound for years


----------



## Joe Blow (19 May 2014)

DeepState has decided to withdraw his two earlier two posts in this thread. Unfortunately, this has created a cascade effect that has resulted in the removal of almost all subsequent posts, as each post in turn quoted a previous post that was removed for quoting another removed post.

However, please note that all content has simply been removed from view, and if anyone would like a copy of the content of any of their removed posts I am more than happy to supply it.


----------



## minwa (19 May 2014)

CanOz said:


> I have a report from Nick on the US Power Setups, done on Stator showing closed trade results. I'm not going to post it as i don't have permission. But anyone can ask Nick for trade reports. The last time i was on collective2 the Flipper and the stats were there.
> 
> The subscription to the US power setups costs me like 20 bucks a months, i get FX futures and equities. There are no secrets in the stuff, its not a holy grail and the returns are just solid profits OVER TIME. *Sounds like you've been burned Minwa? Did you get into a draw-down or something? I can understand that you'd be upset, so was my wife when another managed account we have went into drawdown, it happens....*




What does my trading have to do with Radge ? You're sounding like Alvin in the Kertcher thread. Sounds like someone cannot face facts I have posted and started personal insults ?

More than happy to trade live with you, you can trade Radge's system I will post my trades. I can back my system with $300k.


----------



## CanOz (19 May 2014)

minwa said:


> What does my trading have to do with Radge ? You're sounding like Alvin in the Kertcher thread. Sounds like someone cannot face facts I have posted and started personal insults ?




Personal insults?



> More than happy to trade live with you, you can trade Radge's system I will post my trades. I can back my system with $300k.




I only trade the power setups and as I've said on another thread i've cleaned out my accounts in case we need to pay cash for the property we bought....so sorry will have to decline the trading challenge. Maybe in a few years time Minwa

but....



> What does my trading have to do with Radge ?




and then...



> More than happy to trade live with you




What the?


----------



## minwa (19 May 2014)

So you conclude I am in a draw down when that has nothing to do with this discussion ?

I've asked before and I will ask it again, 

1. Why is his audited results not publicly available ? You mention you saw it on collective2 and have it personally but why can I not easily find it ? So if anyone wants his results they have to go through you to get it ? If you're going to sell something at least back it up with results. 
2. Closing his hedge fund down due to "regulatory increases" is exactly something Kertcher would use for his fund. Did he hide his collective2 results due to "regulatory concerns" ?? 
3. He markets heavily through internet marketing campaigns based on emotional selling, Google Adwords. 

So instead of responding to all that you ask if I am in a draw down, as if that has something to do with this ? You also said something about Radge's lawyers chasing people. Right...


----------



## banco (19 May 2014)

CanOz said:


> The logic behind it is very robust and its not curve fit. Its pretty simple, for an equity to become a multibagger it must first increase 20% in value. If it has done this after a 20% decline in value it must be a strong stock. Throw in an index filter and some exit logic and it becomes a very robust trend following system for End of Day trading. Most of Nick's systems are based on very simple logic that stands the test of time. Its tests well over all the data i have (20 years+) and its also walked forward very well for the last two years. Nothing wrong with that.
> 
> Now lets think of what might cause it to be less than ideal or unprofitable?
> -no trend (think ASX recently)
> ...




His systems only seem to work in a raging bull market (admittedly you can say that about many systems).


----------



## CanOz (19 May 2014)

> 1. Why is his audited results not publicly available ? You mention you saw it on collective2 and have it personally but why can I not easily find it ? So if anyone wants his results they have to go through you to get it ? If you're going to sell something at least back it up with results.




Just write to Nick and ask for the closed trade results. I don't know if he'll give them to you or not, but i know all the members get access to these when you request it. By the way, who else offer audited results? 




> 2. Closing his hedge fund down due to "regulatory increases" is exactly something Kertcher would use for his fund. Did he hide his collective2 results due to "regulatory concerns" ??



 Nick is well respected in the Australian Trading community, including the AATA, you can hardly compare him to this other guy...




> 3. He markets heavily through internet marketing campaigns based on emotional selling, Google Adwords.




So does Jigsaw Trading, are they bad too? 



> So instead of responding to all that you ask if I am in a draw down, as if that has something to do with this ? You also said something about Radge's lawyers chasing people. Right...




You seem to have a grudge Minwa, that was my feeling. My point was that one needs to consider things carefully when you start to try and drag someones name through the mud, Joe gets in enough trouble here as it is.


----------



## DeepState (19 May 2014)

CanOz said:


> ... for an equity to become a multibagger it must first increase 20% in value. If it has done this after a 20% decline in value it must be a strong stock. Throw in an index filter and some exit logic and it becomes a very robust trend following system for End of Day trading.




Back from self-imposed exile after a period of cleansing and celibacy.

Hi CanOz, what do an index filter and exit logic look like?  This is the second time I've come across the flipper so I'm actually curious about it.

Hope things are cool with you, btw.

Cheers

RY


----------



## minwa (19 May 2014)

I have a grudge ? Read the thread first, NickF brought him up not me. I simply analysed what I thought of him based on what is available. All the response I got was "I will be sued" or "you shall not slander him" without anything further to be added to respond to my points made. 

If we were to use your logic then all the people slamming Alvin/Kertcher on Kertcher's thread are in the "wrong" too ? Why do you not stand up for them. Simply because you dismiss Platinum Pursuits as I dismiss Radge (and Kertcher). You think everyone on that thread have a grudge for Kertcher ?

I thought this was a forum for discussion. Quote me on one post where I have not presented any information and simply slandered him. 

This is turning into a joke, this will be the last post I make on this thread on Radge, releasing my err "draw down grudge". Anyone going through this can make up their own mind. 

Still more than happy for you to trade the Power setups live on paper. You don't have to commit funds and more people can be informed of Radge's systems in forward testing.


----------



## DeepState (19 May 2014)

banco said:


> His systems only seem to work in a raging bull market (admittedly you can say that about many systems).




So the question becomes...how do you know you will be in one as you trade?  You need evidence that you are in one first...and then it takes evidence to realize you are either still in one or the regime has switched.  So you actually need at least three things for this to work:  Identify a trend...the trend needs to continue...and for you to remain of the belief that the trend is continuing.  Any link that fails there knocks the trade out.

I think the best benchmark is buy-hold for the strategy period.  That helps to break out the difference between trend identification (have you successfully identified a trend?) and whether the strategy is actually adding any value (measured in any way you like...absolute, MDD, etc..) to the simplest decision rule available.


----------



## CanOz (19 May 2014)

minwa said:


> I have a grudge ? Read the thread first, NickF brought him up not me. I simply analysed what I thought of him based on what is available. All the response I got was "I will be sued" or "you shall not slander him" without anything further to be added to respond to my points made.
> 
> If we were to use your logic then all the people slamming Alvin/Kertcher on Kertcher's thread are in the "wrong" too ? Why do you not stand up for them. Simply because you dismiss Platinum Pursuits as I dismiss Radge (and Kertcher). You think everyone on that thread have a grudge for Kertcher ?
> 
> ...




I stand up for Nick because I've known him nearly a decade....I would do the same for you, or anyone else of integrity that I've know that long.

I don't know Daniel, if i knew him i would stand up for him as well if he had the integrity that i know Nick to have.

I'm not interested in any trading contests, I start a real job in two weeks.


----------



## CanOz (19 May 2014)

banco said:


> His systems only seem to work in a raging bull market (admittedly you can say that about many systems).




Yes Banco, the 20% Flipper is a trend following system. They only perform well when there are trends and you need to be trading the system when it turns on and starts to follow the trend.

Nick also has a mean reversion type system as well but i am not familiar with it.

It doesn't matter what system you have, you have to trade it for it to capture whatever edge you have.


----------



## CanOz (19 May 2014)

DeepState said:


> Back from self-imposed exile after a period of cleansing and celibacy.
> 
> Hi CanOz, what do an index filter and exit logic look like?  This is the second time I've come across the flipper so I'm actually curious about it.
> 
> ...




Hi RY, the index filter is just based on a moving average of the underlying index. There are a couple of different exit strats available depending on which version you have. The exits are very simple and maintain their robustness.


----------



## NickF (19 May 2014)

I am a bit pissed off with Forex because, although advertised as a 24/7 market, I can't trade (virtually) in the weekend, when I have a bit more time than during the week. My attempted trade, placed carefully on Friday night was blatantly disregarded! I shorted the currency, the price dropped to my limit early on Saturday and, because it was weekend, nothing happened! All the work I put my random selection has been wasted... Just look at the surgical precision of my limit!

Nick


----------



## DeepState (19 May 2014)

NickF said:


> I am a bit pissed off with Forex because, although advertised as a 24/7 market, I can't trade (virtually) in the weekend, when I have a bit more time than during the week. My attempted trade, placed carefully on Friday night was blatantly disregarded! I shorted the currency, the price dropped to my limit early on Saturday and, because it was weekend, nothing happened! All the work I put my random selection has been wasted... Just look at the surgical precision of my limit!
> 
> Nick
> 
> View attachment 58029




Your CFD provider might have shut its engine before the market officially closed for the week.  They do this to avoid attempting to hedge the trade whilst liquidity is thinner as happens in the last hour of the New York session.  Similarly, they open for business after Australia actually starts trading on Monday for the same reasons.  

Consider yourself lucky that you have come across this operational wrinkle that has highlighted that CFDs are just a window into the actual market and is not actually the market.

Since this is play time, we can dream that you are an A-tier client of mine despite infecting me with foot-in-mouthitis. I am happy to help you out on this occasion and offer you a swap contract to take your position at the limit price.  We'll chuck the P&L into the errors account this time on the understanding that you will remain a good client of RYFX.  The paperwork will be with you shortly.  We'll route the hedge trade through to Citadel to hammer it out via HFT algo.

You owe me a bottle...would you mind tickling Libor up a touch please.


----------



## TheUnknown (19 May 2014)

Radge is a tipster........search and you will find better tipsters, I was subscribed and no longer subscribed his ASX power set up returns are a complete joke.....similar to Alvins mates returns.

Radge sells books, does tv shows and it's usually safer way to make money then being in the market live,however if you really are an ACE trader.........you don't need that crap you make your cash from the market and subscribers,after all in my eyes the only people that have the right to write a book or be praised are the ones like buffett and co.

But selling books pays the bills.

Just before I quit the US power set ups the first 3 months of 2014 was in a drawdown almost gave back all profits from 2013.


----------



## NickF (19 May 2014)

DeepState said:


> Your CFD provider might have shut its engine before the market officially closed for the week.  They do this to avoid attempting to hedge the trade whilst liquidity is thinner as happens in the last hour of the New York session.  Similarly, they open for business after Australia actually starts trading on Monday for the same reasons.
> 
> Consider yourself lucky that you have come across this operational wrinkle that has highlighted that CFDs are just a window into the actual market and is not actually the market.
> 
> ...




RY,

I'm sorry for causing you to go over board with the comments earlier. 
What would determine you to help me with a bad position? Just because what I perceive a large loss in short term may be perfectly acceptable for longer term and for good customer relations accept a small loss for your business?
How can I tickle Libor up?

Nick


----------



## NickF (19 May 2014)

TheUnknown said:


> Radge is a tipster........search and you will find better tipsters, I was subscribed and no longer subscribed his ASX power set up returns are a complete joke.....similar to Alvins mates returns.
> 
> Radge sells books, does tv shows and it's usually safer way to make money then being in the market live,however if you really are an ACE trader.........you don't need that crap you make your cash from the market and subscribers,after all in my eyes the only people that have the right to write a book or be praised are the ones like buffett and co.
> 
> ...




If I was wiser I would always speak only about the qualities of a person and not their defects. If I had nothing good to say, I would refrain myself from comments. But I'm not...

Nick


----------



## NickF (19 May 2014)

TheUnknown said:


> Radge is a tipster........search and you will find better tipsters, I was subscribed and no longer subscribed his ASX power set up returns are a complete joke.....similar to Alvins mates returns.
> 
> Radge sells books, does tv shows and it's usually safer way to make money then being in the market live,however if you really are an ACE trader.........you don't need that crap you make your cash from the market and subscribers,after all in my eyes the only people that have the right to write a book or be praised are the ones like buffett and co.
> 
> ...




I bought Nick Radge's book and I found it pleasant to read and exciting. Many years ago I bought some other trading books. I found them boring. Maybe he is not right on some topics, but I don't think he wrote the book purely to make money on it, without believing what he wrote.

Nick


----------



## TheUnknown (19 May 2014)

NickF said:


> If I was wiser I would always speak only about the qualities of a person and not their defects. If I had nothing good to say, I would refrain myself from comments. But I'm not...
> 
> Nick




you are already very wise 100% returns and all.

buffets dreaming...


----------



## DeepState (19 May 2014)

NickF said:


> RY,
> 
> I'm sorry for causing you to go over board with the comments earlier.
> What would determine you to help me with a bad position? Just because what I perceive a large loss in short term may be perfectly acceptable for longer term and for good customer relations accept a small loss for your business?
> ...




Had to send myself into exile to repent.  But I'm better for it and more appreciative of the simple things in life.

Brokers help their clients out when in a fix. Then we go out to lunch and drink all afternoon. That's what brokers do....if there is a benefit to it.  In this case, your commissions to RYFX are such that we are happy to relieve you of the USD 5 yard position and take it onto our books at your limit price.  We confirmed that your order was placed and understand that this is a slip due to operational matters.  RYFX is appreciative of your relationship with us and regards this as a gesture of thanks.

In turn, it would be helpful if you were to regard your received rate of funding for LIBOR as 0.2% during the survey submission.  However, you should only submit what you think is appropriate to you.  We are only stating that it  would be helpful to us in the eventuality that LIBOR were to rise to 0.2%.  Should we find that LIBOR has moved closer to our desired rate, we would be pleased to extend a gift to you in the form of an all expenses paid trip to Monaco for the weekend. You can bring your wife, or a 'friend', to accompany you. Thanks for your understanding.

I trust the swap terms and paperwork are in order.

RY


----------



## NickF (19 May 2014)

TheUnknown said:


> you are already very wise 100% returns and all.
> 
> buffets dreaming...




No, that was my wife 
I have to keep silent about the matter, if I don't want to sleep in the garrage 

Nick


----------



## NickF (19 May 2014)

DeepState said:


> Had to send myself into exile to repent.  But I'm better for it and more appreciative of the simple things in life.
> 
> Brokers help their clients out when in a fix. Then we go out to lunch and drink all afternoon. That's what brokers do....if there is a benefit to it.  In this case, your commissions to RYFX are such that we are happy to relieve you of the USD 5 yard position and take it onto our books at your limit price.  We confirmed that your order was placed and understand that this is a slip due to operational matters.  RYFX is appreciative of your relationship with us and regards this as a gesture of thanks.
> 
> ...




I understand now, part of it. 

I am still unsure how can I influence LIBOR to change their rates...

Nick


----------



## DeepState (19 May 2014)

NickF said:


> I bought [a] book and I found it pleasant to read and exciting. Many years ago I bought some other trading books. I found them boring. Maybe [this book] is not right on some topics, but I don't think [the author] wrote the book purely to make money on it, without believing what [they] wrote.
> 
> Nick




What do *you* believe now? Why?


----------



## NickF (19 May 2014)

DeepState said:


> What do *you* believe now? Why?



I believe he wrote the book in good faith.
I would not write a book if I did not believe (at the time) in what I write. 
Later, I may change my mind, if new information becomes available.

Second reason, I like the way you react... :

Third, it is not fair to him to criticize him, without possibility to defend his view.

Nick


----------



## DeepState (19 May 2014)

NickF said:


> I believe he wrote the book in good faith.
> I would not write a book if I did not believe (at the time) in what I write.
> Later, I may change my mind, if new information becomes available.
> 
> Nick




I'm actually not referring to the integrity of the author or any authors who may write on advice or matters presented as fact. For the purposes of trading, whether they believe what they wrote is pretty irrelevant.  Ultimately you want whatever works.  

Instead, I am asking what you believe about trading now having added to your knowledge as a result of reading an additional book. Additionally, if you wish, I am curious as to how you came to those beliefs.  All of us have beliefs and the vast majority are inaccurate representations of whatever is real.  I am not exempt.

You seem excited about this, which seems to imply you've come across things that were interesting to you from a trading perspective.  I was wondering what they might be.


----------



## NickF (19 May 2014)

DeepState said:


> I'm actually not referring to the integrity of the author or any authors who may write on advice or matters presented as fact. For the purposes of trading, whether they believe what they wrote is pretty irrelevant.  Ultimately you want whatever works.
> 
> Instead, I am asking what you believe about trading now having added to your knowledge as a result of reading an additional book. Additionally, if you wish, I am curious as to how you came to those beliefs.  All of us have beliefs and the vast majority are inaccurate representations of whatever is real.  I am not exempt.
> 
> You seem excited about this, which seems to imply you've come across things that were interesting to you from a trading perspective.  I was wondering what they might be.




I am sorry, RY. I still haven't read the whole book. My latest comment was not based on a piece of new information, which changed my mind from what you told me. It was more of a recollection of the excitement I had when I started reading the book 

I know, I disappoint you again. You are not the first one, you won't be the last one 

Nick


----------



## qldfrog (19 May 2014)

Hi RY,
not sure about NickF but for me:
I enjoyed the unholy Grail.
Was my introduction to trend following/TA;
reenforced the notion of risk mitigation, use of stop loss, stopping looser, letting winner run, etc etc;
so good there;

When applied for a year with real hard won dollars
and after refining my parameters and heavy backtesting to "ensure' it would work: not so good;actually bad!

the recent variability /jitter make me buy/sell far too frequently; my win/loss ratio went down (more losers than when i was selecting  stock with "guts"
I entered the market just before a small down trend, had to sell at a small loss most of my initial portfolio and then buy back far too late as I was waiting for my MA to reach its trigger value
in short a nice loss in a market going up....
I believe this is mainly due to the jittery situation we  have had lately which did not fit well with my parameters optimised on the last 20years or so;
--
I wanted strict rules, a nice black/white tool-> did not happen;
do i regret buying the book, no!
I have a good feeling about nick and would be happy sharing a cuppa with him.
just my 2c experience


----------



## DeepState (19 May 2014)

qldfrog said:


> Hi RY,
> not sure about NickF but for me:
> I enjoyed the unholy Grail.
> Was my introduction to trend following/TA;
> ...




I think it's super important to manage risk.  Without a doubt.  Most of my thinking and efforts in investment are to mitigate losses and to size positions and exposures in a way that achieves desired outcomes.  Further, it is important not to underestimate the psychological strain that trading/investment puts a person under.  Certain [unnamed] books and authors have referred to this feature and they are correct in doing so.  Any place you can ascertain more expertise on these two areas is to be valued.

Many TA techniques that I have read about in ASF and in other places produce strategies that either work in trending or reverting markets.  The task is to discover which market you are in and, if trend-based, which way the trend will point.  You were stung applying a trend based system to a reverting market.  Making trading profit is exceedingly hard. Prop traders are amongst the highest paid people around.  In making the attempt to produce systems to do so, many overlays and parameters are available to systems of any invention.  Some mix of these will always work for any market condition or any stock or group of stocks.  The problem is with parameter instability.  If trading with no edge, these parameters will float around all over the place and produce a poor outcome.  If you are able to discern whether you are in a trend or not it is instructive to know whether your strategy beats a pure buy/sell-hold.  

In my view, fine tuning strategies with overlays is an indication of overfit if not accompanied with strong economic rationale.  A trend indicator for markets as an overlay, for example, will show great result/backtests in a market which produces trends.  Yet, if you look back further than 20 years, choppy markets existed and there is no reason to believe that such conditions will not come to the fore again.  These can last a decade or more.  The 1990s and 2000s were driven partly by a hyper credit bubble which is now deflating.  This is a potential trend breaker for a market trend following system - for example.

Any source of learning, whether you agree or not offers an opportunity to enhance your abilities.  I'm glad you found value in your reading and feel warmly towards the author.


----------



## minwa (20 May 2014)

To me it is more about defining the time frame than trend following vs mean reversion. Anyone who makes a profit has to follow a trend - for that specific time frame. When you buy on retracements on an "up trending" stock, you are buying after the short term down trend has reversed and the short term up trend has shifted up, within a longer/intermediate term up trend. Breakout momentum trading is a form of trend following just as "mean reversion" trades is another form of trend following.

If you don't follow the trend for the timeframe you're trading, you're simply not following where the price is going and will not make profits.


----------



## NickF (22 May 2014)

DeepState said:


> You seem excited about this, which seems to imply you've come across things that were interesting to you from a trading perspective.  I was wondering what they might be.



I'm doing virtual trades on Forex based loosely on setting stops smaller than limits. I'm attempting to grow a bit every day, which is not as easy as it may appear...
Where there are big jumps, I placed bids of $100000, instead of the usual $10000. The demo account gives a very high leverage, I think 1:100. I usually choose my bids based on the candlebars set to 1 minute, which is sometimes a bit shortsighted...
So far I've been lucky, I'm curious to see how long my luck lasts.

Nick


----------



## Wysiwyg (3 August 2014)

DeepState said:


> Hi Minwa
> 
> I worked as hard as I could and did it as smartly as I could the whole time.  In reality, I passed most of the types of financial goals mentioned in this forum, $1m etc, by around 28 and just kept going because we tend to be highly driven at that sort of age, although exceptions do occur.



Hello. I am intrigued. Your experiences are unique. Would I be accurate in assuming you excelled at taking money out of the financial markets _like very few people know how to_? Other questions if you would be so kind? In the beginning did you borrow to take large positions or was an accumulated hefty salary the stepping stone to large position trading? Were fundamentals the analysis of success? I appreciate an individuals time is precious so a brief reply or none at all is understandable.


----------



## DeepState (3 August 2014)

Wysiwyg said:


> Hello. I am intrigued. Your experiences are unique.
> 
> 1.  Would I be accurate in assuming you excelled at taking money out of the financial markets _like very few people know how to_?
> 
> ...




Hi

Everyone walks their own journey.  Mine is just one.  Yours is unique too.

1. We did some pretty funky stuff that the insto market liked.  It was very leading edge in areas and was copied by others eventually.  Our original clients still seek my advice now. In a number of  cases, they still use products which my former team play a role in managing or which are connected to the organisation that we were/are part of. It's gratifying when you can know you did it right. 

We used other methods that were also cutting edge at the time.  The idea was mostly to acknowledge that our edge in a single stock was tiny.  We did things cross-sectionally.  That is, one stock vs another. Pair/cluster trading en masse. This is a type of approach that might be called statistical arbitrage. It worked.  I also held broader responsibilities.

2. I accumulated by personal exertion in the first instance.  This sounds bad...but it wasn't worth my time to manage our own assets when I was working.  Plumber's house has leaking taps etc..  My family portfolio consisted of a pile of TDs which my wife rolled, a stack of stock which formed part of my compensation and whatever was placed into super.   I never looked at it when the statements came in.  Given the company I worked for was a rather large financial entity, the stock was essentially a mutual fund into the world market.  With leverage.  My salary was a levered play on my ability to generate returns.  In that way, I suppose, I was a levered investor.  It really felt that way too as I don't think I felt I would definitely have a job at the end of a year in all except 2 years.  We were always on the line.

Institutional funds management has a bad name in terms of just being asset gathers etc.  The reality, which I experienced anyway, was that benchmark hugging guaranteed loss of the client.  They can run your portfolio through risk systems (or their advisers can) and see what is going on.  If you don't do well, your business shutters in just a few years.  The typical period of assessment is just 3 years. If something goes wrong, that period can be shortened to tomorrow.

I am not a punter.  I would hazard to guess that I would be around the bottom 10% in terms of risk appetite in this forum.  I do not take monster positions. That gold position, which I think you must be referring to, will be a fractional exposure when completed.  90% of forum participants would not get out of bed in the morning to make that kind of adjustment, proportionately. Those that do might just have nothing particular to do that day/minute. They might be large dollar positions, but my objective is really to add a margin to inflation which is like saying our wealth should grow in-line with GDP.  We don't spend our income.  We have means, but we're just not that kind of people.  If you looked at me, you'd see nothing at all. So this will lead to an increasing multiple of expenditure.  It will eventually be passed along - I hope.  I am also Slowly Walking the Road to (more) Riches, like Ryan C.  I'm just taking a slightly different path because I have some more latitude available.

Leverage does form part of this, but this is because the risk management processes I use are targets towards dollar wins and losses.  Then the positions are taken to respect those limits and this allows for some leverage (It's around 0-10% net, but can be much larger 'gross notional') in effective exposure terms. I don't actually borrow money from a bank.  It occurs because my proportional holdings in the relatively high volatility class of equities is surprisingly low compared to what might be regarded as normal by the general populace. So I lever a bit to utilise the risk budget.

3. For me, everything boils down to fundamentals and risk management/deployment.  Even if some the techniques I use do not explicitly include fundamentals in their formulation, it is there before the code was written or the general shape of a decision was made.  There must be an economically coherent reason why something should work and this must be backed by solid reasoning/evidence that it has worked, with the conditions still prevailing in which it can.  The FX thing previously posted is just one such idea.  The reasons it works are visible.  You can check that the conditions are actually present.  You can risk manage it.  I do not play at the casino until I have confirmed I am the house.  In this house, I can count cards too.  There are many games on offer.  I don't need to play them all.  There are more than I am not good at than which I can make a fist of.


My wife is still my Head of Investment.  She is still too big to fail...


How about you?  What's your approach/development been?


----------



## Wysiwyg (3 August 2014)

DeepState said:


> Hi
> Everyone walks their own journey.  Mine is just one.  Yours is unique too.
> How about you?  What's your approach/development been?



Thank you. Well I am from the other side of the track so to speak and feel hopeless, slightly envious, even intimidated  by your presence in regard to financial market knowledge, experience and success. You made it where I am still trying. In the past I have extracted a years earnings in physical work terms from the stock market in a few months and made a thousand dollars an hour on other trades, only to give it all back plus more. I lost more often because I lacked experience, matter of fact I didn't know what I didn't know, particularly risk management and strategy. Big swings up (for me anyway) bigger swings down. My experience gathering has cost over 100 thousand dollars since 2006. Gave up in 2012 to focus on first home purchase.

I am going down the price and volume analysis road because repetition is evident in charts. Am spending much spare time on signal creation with a final discretionary execution style. Manage risk with position size/loss control.  I play very small nowadays while I gain experiences, trial and error strategies and build a bankroll to participate on a scale that will supplement my day job.

Thank you again for sharing your experiences and yes, everyone makes their own way.


----------



## skc (3 August 2014)

DeepState said:


> There must be an economically coherent reason why something should work and this must be backed by solid reasoning/evidence that it has worked, with the conditions still prevailing in which it can.




One of the wisest things ever posted. It applies to trading and investing. Commonsense + logic are the foundation to success. The rest are just enablers imo.




DeepState said:


> My wife is still my Head of Investment.  She is still too big to fail...




The least wise thing ever posted... calling your wife too big! She's in complete rage after reading the word _big _and didn't finish reading the rest of that sentence.


----------

