Comments on Proprietary Trader: Results 2Q09 : Still Struggling

Thanks Don. U have a good weekend too.

2009-07-05T12:37:22.761+08:00

Thanks Don. U have a good weekend too.

TS, Understood and points taken, esp about Disci...

2009-07-05T01:36:52.925+08:00

TS,

Understood and points taken, esp about Discipline. Actually, would not have expected anything else/otherwise from you/your methodology.
:)

Again, your posts+sharing will be very useful, if/when I do move away from being a 'screen jockey' (from your longer-term perspective!) and towards trading long term timeframes exclusively.
After all, opportunistic diversification is the whole point of LT trend-following...

Enjoy this long weekend.

Thanks,
Don

Don - I have however, decided to stop trading natu...

2009-07-03T09:33:42.729+08:00

Don - I have however, decided to stop trading natural gas because of the difficulty I have in charting it. The contract rolls monthly, exhibits large discontinuity in prices across contract months, and I just cant find a way to construct a nice big picture view of it.

Don - I think all of us at one time or other get i...

2009-07-03T09:28:21.877+08:00

Don - I think all of us at one time or other get into situations where we feel that we are just "suay" with certain markets eg like my Gold trades and repeated unsuccessful attempts to trade it this year. However, I think it's really all in the mind and down to discipline. So I would not abandon any market just because of a bad run of results in it .. if you believe that trading off charts work.

TS, Sometimes, all we can do is tread water and k...

2009-07-02T23:56:51.150+08:00

TS,

Sometimes, all we can do is tread water and keep our heads up. That is, make just enough to cover expenses (or to minimise losses/preserve capital); we have to take the 'lean' times just as much as when we capitalize on the out-sized gains of the 'fat' times -- the 'joseph' cycle is real in any timeframe.

In any case, a >20% (or ~4%, based on TNW) over 2 quarters for 'lean' times are still very credible results. Kudos to you.

A bit surprised at your relatively big loss in Eurodollar; I remembered/thought this trade as one held for quite a short period only.

I understand your rationale for trading such a wide range of markets (diversification, taking each trade on its own trend/technical merits etc) and I'm sure in previous good years the top returns may had been from other instruments (which justifies the diversification of course); but will you ever consider dropping a market based on previous large and continued losses in it ?
(ie. apart from adding/removing market instruments based on the primary criteria of liquidity+favourable trend price action)

Good trading and thanks as always for your sharing.

Don

TS, 20% + quarterly return is actually a great res...

2009-07-02T22:08:31.520+08:00

TS, 20% + quarterly return is actually a great result. And combined with long term (relative) consistency - many money managers would give an arm and a leg for such a result.
Look forward to reading your posts.

Pandu

Simple. T4L is my dream.

2009-07-02T13:45:58.110+08:00

Simple. T4L is my dream.

18 years of bank trading experience, impressive! P...

2009-07-02T13:32:00.199+08:00

18 years of bank trading experience, impressive! Prop trading, flow trading or market marker?

Why do you left the banks? If you are trading well, I am sure banks will reward you.

My risk appetite increase has not kept pace with e...

2009-07-02T11:59:46.202+08:00

My risk appetite increase has not kept pace with equity growth. At the end of the last 2 years, I have withdrawn funds from margin account to fund expenses as well as increase savings. So, definitely not exponential growth in trading size.

I have found that in T4L, it takes time to get used to bigger and bigger swings in daily P&L. Thus, growth in risk appetite is more of a linear function. To trade well, one has to be mentally unaffected by the P&L volatility. I find that difficult beyond a certain amount and expansion of that comfort zone has to be done gradually.

For me, the biggest difference between T4L and interbank trading is that I am playing with my own REAL money and it hurts when I have to suffer the consequences of stupid actions. In interbank, it was all just numbers to me, like keeping score in a computer game or playing with monopoly money.

I've noticed that the value of $1 invested is over...

2009-07-02T02:56:13.022+08:00

I've noticed that the value of $1 invested is over 7 times since you started T4L. Apart from the monthly 4~5% you say you need to cover for expenses, do you keep your profits in this T4L futures account or do you transfer them to your passive account? I am wondering if your trading size has grown exponentially since you began T4L. BTW, I really enjoy reading your blog. For someone thinking about pursuing T4L, it truly is inspirational. Thanks!

I was refering to that 25%, on that the return is ...

2009-07-02T02:02:28.533+08:00

I was refering to that 25%, on that the return is 21% for you now. Those gurus are not talking about net worth the discuton is general and its about returns over exposed capital not over net worth. But then again those gurus teah and talk and some of us are traders.

My risk capital is only 25% of Net Worth. The othe...

2009-07-01T22:23:21.588+08:00

My risk capital is only 25% of Net Worth. The other 75% is in low risk instruments. I need to divide the 21.5% by 4 = 5.3% to get overall return on NW. This 5.3% is the figure that should be compared to the 20% yoy that the experts recommend.

I do not feel brave enough to allocate more of my NW as risk capital. I need the risk free bit to fall back on in event of a trading disaster.

2Q09 qoq : +14.7% 2009 ytd : +21.5% Your results ...

2009-07-01T21:56:28.101+08:00

2Q09 qoq : +14.7%
2009 ytd : +21.5%

Your results and thinking is the same as mine, you`ve got 21% ytd and you say you are struggling while others even some gurus and some pshyholog gurus say that 20%/year is enough and a trader should not expect more. I would say that with the current capabilities of margin a trader should think of getting another job if he is not able to make more than 20%/year.

9 years big Swiss + 9 years big Dutch bank trading...

2009-07-01T14:23:44.599+08:00

9 years big Swiss + 9 years big Dutch bank trading interest rates prior to T4L.

Still looks pretty impressive to me. Have you work...

2009-07-01T12:00:57.112+08:00

Still looks pretty impressive to me. Have you worked as a broker or a trader in the financial sector before?