Is a profit of 100% per year good enough?

[NickF]

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

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]

"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]

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]

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]

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]

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]

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]

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]

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]

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]

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

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]

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]

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

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]

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]

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]

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.

Cheers

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]

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]

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.

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.

3. 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

4. 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

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]

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]

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