The transition to Futures trading

[Trembling Hand]

As to arriving at the expectations... it's really a chicken and egg problem. You can't make meaningfully expectations if you haven't traded, yet how does one start trading if he/she doesn't know what to expect? To me the only way around that is to give it a good go in a risk controlled manner, and let it unfold to see if there's meaningful reward at the end of it. That's how I started trading

Yep. It only takes the slightest bit of experience and imagination about what is possible. Then after that it is faith in your ability. Your ability to make a profit out of the opportunities.

Personally after 10 years of trading intraday I don't think there is anything more destructive to long term survival and indeed mental health for a short term trader than a % target based on a low to mid level capital base. When you start you should be doing a rough break even analysis to see what you need to survive and make sure your capital is adequate but % return for trading is a bogus concept.

You just have to have a look back at this thread a few pages to see what happened to Pav once he drew a target line on his P&L chart.

 

[skc]

Yep. It only takes the slightest bit of experience and imagination about what is possible. Then after that it is faith in your ability. Your ability to make a profit out of the opportunities.

Personally after 10 years of trading intraday I don't think there is anything more destructive to long term survival and indeed mental health for a short term trader than a % target based on a low to mid level capital base. When you start you should be doing a rough break even analysis to see what you need to survive and make sure your capital is adequate but % return for trading is a bogus concept.

Long time mate. How's it going?

 

[Trembling Hand]

Long time mate. How's it going?

Back into it after a long hol (6 months ). Not much changes though hey?

 

[fiftyeight]

I recently read Reminiscence of a Stock Operator, and there is an anecdote about how the market will never buy you a new a coat or pay a bill. But much more eloquently put.

It was one of the many lessons I took away from the book, and have changed the way I set my targets/goals

 

[minwa]

How is your track record so far? You don't have to get specific, but I am curious about how many years you have traded with this expectation and how many years of those was your expectation met? How many years in the future do you expect to be able to maintain that kind of posture successfully?

This is only 1.5th year of trading with this expectation. I only got consistently profitable in 2013. I don't mind specifics. Keep in mind it's not all intraday futures trading. I intraday trade ES, swing trade FX (GBPUSD only) & hold options positions over a few days.




Achieved it last year, this year currently on target.

Rebalancing funds in different methods my opinion is my key to reducing draw downs & is what I will expect will be able to maintain into the future succcessfully as market conditions change.

Do you feel the stress and risk (leverage risk especially) is worth it?

Yeah worth it. This is my career and I intend to make it "big", so my mindset will be different to a salaryman shifting into retirement who just wants some extra icing on their already established retirement fund. But I am relatively young and unencumbered with family burdens it also might be different if I had wife & kids that relies on me to feed them.

Personally I have stopped trading with margin (only leverage through buying puts/calls now) and pretty much do only long term investing now (and some hedging), with an expectation of 7-20% per annum total returns over the very long term. This takes up almost none of my time, is extremely low stress and comparatively low risk.

I used to do intraday FX but stopped that kind of thing a while back and felt extremely validated by my decision when the SNB removed the EUR peg and caused EURCHF to go bananas.

Absolutely nothing wrong with that - sounds great in fact that you find intraday is not your thing. Franc & Yen are the most manipulated majors in my opinion.

I calculate it only based on account equity like Minwa suggested.

You have some money. You could take it and start a bakery, or, invest it into an index fund, or trade it. To me they are all the same in the sense of "you have invested this money into a business".

The expected return on that money is what I'm specifically interested in.

I operate like Trader 3 and allocate an amount of capital to the business of trading leveraged products. I position size based on the allocated capital (and realized P&L). One benefit with using leveraged products is that I don't have to place all the business capital in the brokerage account. This reduces the pain when the broker goes out of business (happens too frequently). There's a higher probability that my broker will go out of business before I get a margin call.

The EOY P&L is expressed against the amount of capital allocated for the business of leveraged trading.

I agree with minwa's minimum expectation (risk 0.5%/T, 200T/yr at an expectancy of 0.3).

That's how I view it. It's calculated based on how much you invest into the business, whether you put only a bit in the trading account for margin, the capital is still set aside for trading purposes. The people who calculate % on margin will have wild draw downs, based on their margin. Personally prefence but I do it like if I was investing into a fund - how much money I send to them is what they deem as trading equity & return derived from that amount.

I guess what I am trying to say is, asking others what their % return was is meaningless unless you know the specifics behind it.

Yes... you can sort of use it to compare alternate actions, as well as assess performance over time if you apply the methodology consistently.

The specifics to me is drawdowns.

 

[VSntchr]

View attachment 62994
View attachment 62993

Nice work minwa, those equity curves are pretty.
Are those summary pages coming from your broker, or an external analysis program?

 

[CanOz]

Nice work minwa, those equity curves are pretty.
Are those summary pages coming from your broker, or an external analysis program?

Yeah totally echo that Mina, that's an enviable track record. Any prop shop would take that and give you some size...I'm sure you've already got a view on that.

Yes, also curious about the stats software as I'm looking for something I can dump into from NT.

Also curious how you execute your trades (Dom?) and of course who you execute through and the round turn cost if you don't mind.

 

[minwa]

Nice work minwa, those equity curves are pretty.
Are those summary pages coming from your broker, or an external analysis program?

Yeah totally echo that Mina, that's an enviable track record. Any prop shop would take that and give you some size...I'm sure you've already got a view on that.

Yes, also curious about the stats software as I'm looking for something I can dump into from NT.

Also curious how you execute your trades (Dom?) and of course who you execute through and the round turn cost if you don't mind.

Thanks guys, it's from Interactive Broker's "portfolio analyst" program (web-based) which is free for all account holders.

CanOz I'm assuming you're talking about the futures part, ES is around $3.00 something USD per contract after exchange fees. I was never into DOM, hurts my eyes. My ES & GBPUSD trading is time & price based. Mostly influenced by works of Larry Williams/George Angell/Tony Crabell. FX a former CitiBank trader showed me the ropes. Options is my own maths-based work on volatility/premium/time.

I stress again I credit fund rebalancing for the continued smoothness instead of just putting my money into the system that I think will be the highest performer. I'm usually proven wrong later. Perhaps confidence is a early sign of a system going into a hiccup. Or maybe it's just the very cyclical nature of the markets, ups & downs.

 

[>Apocalypto<]

Back into it after a long hol (6 months ). Not much changes though hey?

nice to see you're back TH..........

 

[>Apocalypto<]

Thanks guys, it's from Interactive Broker's "portfolio analyst" program (web-based) which is free for all account holders.

CanOz I'm assuming you're talking about the futures part, ES is around $3.00 something USD per contract after exchange fees. I was never into DOM, hurts my eyes. My ES & GBPUSD trading is time & price based. Mostly influenced by works of Larry Williams/George Angell/Tony Crabell. FX a former CitiBank trader showed me the ropes. Options is my own maths-based work on volatility/premium/time.

I stress again I credit fund rebalancing for the continued smoothness instead of just putting my money into the system that I think will be the highest performer. I'm usually proven wrong later. Perhaps confidence is a early sign of a system going into a hiccup. Or maybe it's just the very cyclical nature of the markets, ups & downs.

nice returns Minwa!

seeing and hearing things like this keep me pushing away....

agree on set % returns never do it as every day is different.

 

[CanOz]

nice to see you're back TH..........

Yep, echo that one as well. I've missed you on the bid TH...heck they all have!

 

[Trembling Hand]

Yep, echo that one as well. I've missed you on the bid TH...heck they all have!

LOL @ the DAX. I'll need another holiday after that!!!

 

[CanOz]

IMF jawboning. I was looking at my trading PC from iPad in bed when the news hit....thought there was a problem with the app for minute.....what a buzz kill.

 

[CanOz]

TH, Curious as to your thoughts on the obvious divergence between the HHI, HSI, XINA50 and the silly Shanghai contract? It's been a battle for the last few months between them all!

 

[Trembling Hand]

TH, Curious as to your thoughts on the obvious divergence between the HHI, HSI, XINA50 and the silly Shanghai contract? It's been a battle for the last few months between them all!

Ha NFI! I haven't looked at a honkers contract since November. Gone cold turkey. I'm playing the Euro game now. imp:

 

[>Apocalypto<]

Ha NFI! I haven't looked at a honkers contract since November. Gone cold turkey. I'm playing the Euro game now. imp:

Euro currency futures, Interest rates or Indexes TH?

 

[avion]

I do believe there are more rewarding opportunities on DAX than HSI (considering they seem to be two craziest indexes around as far as i know...) but understanding the beast is a challenge to put it modestly.

...

Sprechen Sie Deutsch Mein Herr!

Deutscher Aktienindex ist das besten!

 

[CanOz]

Ha NFI! I haven't looked at a honkers contract since November. Gone cold turkey. I'm playing the Euro game now. imp:

They haven't got you spreading Eurodollars have they?

 

[Trembling Hand]

They haven't got you spreading Eurodollars have they?

Nah just the DAX.

 

[CanOz]

Nah just the DAX.

Ah that explains why it went so bid until you went to bed!