Re: [amibroker] Has anybody made any money???

Mon, 19 Jun 2006 19:15:33 -0700

Yuki:
 
Of course, it is self-evident that nobody can get 100% every year otherwise he would own the whole world in less than 50 years starting with $100.
That's not the point. The point is when you are small, you should strive for high returns with reasonable drawdowns. Then when you get to a few millions or higher, you should diversify your investments/systems and get lower but steady returns. That's the goal for many individual traders if they don't want to manage other people's money.
As I read, many top traders were able to get 50-500% for 5-10 years when they started out. When you are big, it is hard to get high returns since your moving in/out of the market causes adverse price movements.
 
Richard Dennis didn't blow his own bankroll. He blew half of the fund he managed in 1987 because he violated his own principles which he taught to the turtles. He stopped managing fund for a few years until 1994, when he started Dennis Trading Group. He was and still is a very wealthy man.
 
Good trading,
 
- Mark
 
----- Original Message -----
From: Yuki Taga
To: Mark H
Sent: Monday, June 19, 2006 9:16 PM
Subject: Re: [amibroker] Has anybody made any money???

Hi Mark,

Glad to hear you don't bet the farm. ^_^

I was trading probably before the 'Wizard' writers were out of high
school.

And I believe Richard Dennis, whose successes were kind of the
inspiration for those books, eventually tapped out, as in blew the
whole bankroll. Pardon me if I have that wrong.

Nobody gets those returns consistently, and the basic reason behind
that statement being clearly true should be obvious: The geometrical
growth of the money would soon have such a successful trader with
such a large amount of capital that percentage return gets
progressively more and more difficult to keep in the stratosphere.
Eventually, position sizes become a problem because of market
liquidity. Or did you harken onto the grail? ^_-

Look at Warren Buffet's problem ... too much cash, not enough
qualifying opportunities. And he's not even a trader.

Of course, you could be talking un-compounded. But I still have
serious doubts about sustainability.

I stand by my statement that outsized returns, particularly the
super-jumbo outsized, require outsized risk. I haven't seen any
cases in which that risk didn't ultimately pose a problem. And I
also stand by my opinion that percentage returns in that league are
unsustainable. If they were not, a very few managers would be
managing most of the world's capital. But that is not the case.

Yuki

Tuesday, June 20, 2006, 9:36:27 AM, you wrote:

MH> Yuki:

MH> Thanks for your kind warning. However, you got it wrong. I am trading a strict mechanical system including position sizing algorithm. So "bet it all" is not applicable here. There were no big
bets and no big wins either. Just small bets and small wins/losses, and a lot of them. Since you stated "nobody gets those kind of returns", I would recommend that you read a few of those
wizards/hitters books to get some inspiration.
MH> Good trading,

MH> - Mark H

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