I can't sleep...
I've been nearly going crazy since the accident. I have to get better. I have to get back on my bike. I have to get out of this house and get a job. I have to finally get started with my Robotic Trading career with real money. Not to mention, My marriage is in trouble, but that's a long story that I'm not sure I'm going to explain any time soon, or at all.
March 11th was supposed to be my next appointment to go to the orthopedic place to have my heel looked at. They called the day before to tell me I had been bumped because they had an unforeseen surgery with someone and wouldn't be able to fit me in. Now the 18th is the reschedule... hopefully some good news, although at this point I can tell the bone is still open, because it swells when I let it down. It still hurts in a way that is obviously still broken. The plus side of no surgery is no added medical bills, the downside... a hell of a large gap for my bone to try and close up...
I'm still doing as much as I can that I was before. I'm still cleaning and organizing the house, doing laundry, dishes, taking out the trash, and actually driving to the store to grocery shop... all either on my hands and knees with the assistance of a backpack, or on crutches with awkwardly imbalanced weight on one side or the other.
My lack of mobility is seriously prison like, especially because I am not "Allowed" to ride the bike... But it's getting to that point where I'm going to start saying fuck it. I've already ridden it last month to go get it registered for the year and to go visit a friend in the nick of time... It's a hell of a lot easier than driving a manual transmission car....
I don't know what to say...
Well, I do have one thing to say: I'm still going to the gym consistently and eating healthy. I've fought hard to maintain my weight since the accident, I'm down only 3 lbs. Today has to be the 4th or 5th time someone has taken the time to tell me my work ethic at the gym in spite of my injury was "Inspiring". That made my day. I always work harder than anyone I see there. I push hard, but I know if there was a gun to my head to get a few more reps out I could muster it.
Did I ever mention I had the fucking "lunk alarm" go off on me for "Grunting" ?!?! Planet fitness is not a place that really wants you to kick ass and work hard unfortunately, they want to make money more than anything... And I understand that because they are a business, but they appeal to the lazy people who are never going to get anywhere, it brings in the most business... Hell... I can't believe they actually give out free pizza there...
Anyways, I worked my ass off as I usually do, but today I worked Triceps and Pecs really hard. It's the only time I leave the house... It's been so nice and sunny out these last few weeks (with a few exceptions) and I just can't crutch it everywhere... Pretty soon I'll be seeing baby ducklings running around :) That's always a treat.
A lot of difficult changes happening in my life soon it seems... I'll keep you posted.
Showing posts with label automated trading. Show all posts
Showing posts with label automated trading. Show all posts
Saturday, March 12, 2016
Tuesday, February 23, 2016
Feb Updates
Finally have the bike fixed up. I took some time today to polish the head light, clean the exhaust pipe and repaint some things that needed painted. On top of that, while I was fixing the bike out in a parking spot in front of the apartment, out of nowhere a red pickup truck with an older bearded guy pulled up and handed me a business card and told me "If you ever need any work done I work on sport bikes."
I thought to myself "What the hell is this guy doing here??"
Well, turns out he lives in this complex and was told he can no longer work on his bike on the complex property because he leaves a mess... My maintenance guy came running up telling me that this guy video taped me working on the bike and sent it in to the office. What an asshole. I always clean up after myself, and this lazy person who doesn't has to ruin it for me. Either way, if I want to wash my bike, I'm gonna do it. If I need work done on my bike, I'm going to do it...
As far as the trading goes, I have started running the portfolio on my high performance rig at the same time and have noticed that my older computer has internet problems that my rig doesn't have. I will probably be switching over to just this rig for trading the portfolio. Possibly spending some money to have a newer dedicated rig just for the trading portfolio... but we'll see. After expenses and everything in the last 7 months, I've got about $21,000 total to trade with. Spending on dental crap and all that necessities I have turned out to be more expensive than I wanted. There is a truck wash in town that is hiring between $12.50-$15.00/hr. That would easily enable me to put consistent capital into the business. That's all for now.
I thought to myself "What the hell is this guy doing here??"
Well, turns out he lives in this complex and was told he can no longer work on his bike on the complex property because he leaves a mess... My maintenance guy came running up telling me that this guy video taped me working on the bike and sent it in to the office. What an asshole. I always clean up after myself, and this lazy person who doesn't has to ruin it for me. Either way, if I want to wash my bike, I'm gonna do it. If I need work done on my bike, I'm going to do it...
As far as the trading goes, I have started running the portfolio on my high performance rig at the same time and have noticed that my older computer has internet problems that my rig doesn't have. I will probably be switching over to just this rig for trading the portfolio. Possibly spending some money to have a newer dedicated rig just for the trading portfolio... but we'll see. After expenses and everything in the last 7 months, I've got about $21,000 total to trade with. Spending on dental crap and all that necessities I have turned out to be more expensive than I wanted. There is a truck wash in town that is hiring between $12.50-$15.00/hr. That would easily enable me to put consistent capital into the business. That's all for now.
Monday, December 21, 2015
Flying Metal Tubes, Black Sholes and Pissing People Off.
Ok, so my flight was interesting. At the last second the departure gate was changed from gate D11 to C7 and my seat was changed from 13E to 7E. I swear that number is intrinsically woven into my life. I'm not superstitious, so to me it's really just a number, but I've had so many directly awesome things revolve around it.
So, later on in the evening after landing and getting the rental car, there was an error in google searching the hotel address. It routed me all the way out of the city and then I realized the hotel was actually very close to the rental car place. By the time I got back the Odometer was 3,777 miles LOL.
Anyways, I found myself later that night at a local bar sitting across the table from a guy who had already had way too much to drink and we had started talking about trading. The conversation started off interestingly enough, but at one point things turned and He straight up declared that it's mandatory that I know what the black sholes model is if I'm going to be trading.
A little back story though, when I told him I was getting into algorithmic trading he said he used to be a day trader, and that He "had a good run", but is now doing some "real estate thing". I have met several people in my years who have "Been" a trader at one point or another and I could tell by the way he spoke about his "Good run" that he more than likely got his ass handed to him like most people. The way he was so bitter in the conversation about trading was just more evidence. If you are actually successful in the worlds most amazing business, you don't just walk away from it after being one of the 5% that actually make a good profit. You don't go from the fully liquid equities market, to illiquid assets like real estate. And furthermore, you don't refer to trading as "Gambling" in a bitter demeanor, that really doesn't make your former success believable. (Although yes, I do consider trading a form of gambling, that doesn't mean there aren't self controlled professional gamblers that make a comfortable living at it.)
Anyways, when I told him I had heard of the Black Sholes model before but didn't ever take the time to learn what it was, his drunk eyes turned black (like that shark in Finding Nemo) and he hunched over the table and told me (As if I'd just spit on his mother's grave) "You have to know what the Black Sholes model is if you're going to trade. Period"
And that's when the conversation really turned sour on the inside, but I could tell he was trying hard not to let it spill over to the outside. I asked him what the Black Sholes model was, because I was partly pandering to his insistence and partly deeply curious about it. All he could say was basically "It's a formula for analyzing options to arrive at a stocks true value" and I knew right then and there it didn't apply to me. Why? Because he was talking specifically about stock options, and I don't have anything to do with that. I found it hilarious that he insisted I needed to know this, yet didn't actually explain to me what it was... He tried to explain what options were to me, because he must not have believed me when I told him I knew, and yet somehow I ended up finishing his sentences ;)
I am a pretty clear speaking man, so I told him what I truly thought. I told him that I think people that don't truly grasp trading tend to think religiously about a method; like there is only one way to make money and that if you aren't doing it their way you're going to fail, or that it just doesn't work. I told him that the age old CTFC warning of "Past results are not indicative of future performance" is total bullshit, and that all we have to go by in this world is past performance to mold our expectancy around. I told him I don't give a shit about the method, over the data, and that to me data is all that matters. He even tried to tell me that trading is a "Zero-Sum" game (Meaning that for every loser there is an equal winner) and I'm pretty sure I stepped on his feelings when I corrected him that it was a "Minus-Sum" game because of slippage and commissions, to which he laughed as if that somehow doesn't make it what it is. And yet one of peoples biggest concerns is trading costs...
Anyways, after a heated discussion about trading he ended with the usual "Well I wish you the best of luck" Which is really meant as "I can't wait to hear that you failed, because if I couldn't do it, I know you can't do it!"
Well... I don't need luck. I need a winning strategy backed up by loads of viable data, and the discipline to enact that strategy with immovable belief even in the face of inevitable draw down.
I'm not for one moment claiming I'm going to make it, but hell, in the six months I have been home I've already out-traded 95% of people simply by still having almost 100% of my capital. I've done leaps and bounds better than I have in the past. I've had the discipline to not tamper with my trading robot, and I've not taken any giant losses in my discretionary account like I have in the past.
I still have room to improve and always will. I don't think I'll ever permanently get "There" because growth is a constant battle and the road is circular. Habits are constantly in the making. And if at the end of the day I can't get profitable, I'll have to come to accept that. But for now, it's still too early to call it, and too early to give up, no matter who thinks I can't make it.
How can I honestly take someone's negativity personally when I know they are part of the masses who often never hold any disciplines that require the true hard work of inner development? Of course they are going to be negative, it's the easiest thing in the world to do. Especially when the best examples they get of human triumph are from the movies instead of their own lives? And when the truths they get about trading are from the twisted media and stories of failure from a "Friend of a friend who knew a guy".
So, later on in the evening after landing and getting the rental car, there was an error in google searching the hotel address. It routed me all the way out of the city and then I realized the hotel was actually very close to the rental car place. By the time I got back the Odometer was 3,777 miles LOL.
Anyways, I found myself later that night at a local bar sitting across the table from a guy who had already had way too much to drink and we had started talking about trading. The conversation started off interestingly enough, but at one point things turned and He straight up declared that it's mandatory that I know what the black sholes model is if I'm going to be trading.
A little back story though, when I told him I was getting into algorithmic trading he said he used to be a day trader, and that He "had a good run", but is now doing some "real estate thing". I have met several people in my years who have "Been" a trader at one point or another and I could tell by the way he spoke about his "Good run" that he more than likely got his ass handed to him like most people. The way he was so bitter in the conversation about trading was just more evidence. If you are actually successful in the worlds most amazing business, you don't just walk away from it after being one of the 5% that actually make a good profit. You don't go from the fully liquid equities market, to illiquid assets like real estate. And furthermore, you don't refer to trading as "Gambling" in a bitter demeanor, that really doesn't make your former success believable. (Although yes, I do consider trading a form of gambling, that doesn't mean there aren't self controlled professional gamblers that make a comfortable living at it.)
Anyways, when I told him I had heard of the Black Sholes model before but didn't ever take the time to learn what it was, his drunk eyes turned black (like that shark in Finding Nemo) and he hunched over the table and told me (As if I'd just spit on his mother's grave) "You have to know what the Black Sholes model is if you're going to trade. Period"
And that's when the conversation really turned sour on the inside, but I could tell he was trying hard not to let it spill over to the outside. I asked him what the Black Sholes model was, because I was partly pandering to his insistence and partly deeply curious about it. All he could say was basically "It's a formula for analyzing options to arrive at a stocks true value" and I knew right then and there it didn't apply to me. Why? Because he was talking specifically about stock options, and I don't have anything to do with that. I found it hilarious that he insisted I needed to know this, yet didn't actually explain to me what it was... He tried to explain what options were to me, because he must not have believed me when I told him I knew, and yet somehow I ended up finishing his sentences ;)
I am a pretty clear speaking man, so I told him what I truly thought. I told him that I think people that don't truly grasp trading tend to think religiously about a method; like there is only one way to make money and that if you aren't doing it their way you're going to fail, or that it just doesn't work. I told him that the age old CTFC warning of "Past results are not indicative of future performance" is total bullshit, and that all we have to go by in this world is past performance to mold our expectancy around. I told him I don't give a shit about the method, over the data, and that to me data is all that matters. He even tried to tell me that trading is a "Zero-Sum" game (Meaning that for every loser there is an equal winner) and I'm pretty sure I stepped on his feelings when I corrected him that it was a "Minus-Sum" game because of slippage and commissions, to which he laughed as if that somehow doesn't make it what it is. And yet one of peoples biggest concerns is trading costs...
Anyways, after a heated discussion about trading he ended with the usual "Well I wish you the best of luck" Which is really meant as "I can't wait to hear that you failed, because if I couldn't do it, I know you can't do it!"
Well... I don't need luck. I need a winning strategy backed up by loads of viable data, and the discipline to enact that strategy with immovable belief even in the face of inevitable draw down.
I'm not for one moment claiming I'm going to make it, but hell, in the six months I have been home I've already out-traded 95% of people simply by still having almost 100% of my capital. I've done leaps and bounds better than I have in the past. I've had the discipline to not tamper with my trading robot, and I've not taken any giant losses in my discretionary account like I have in the past.
I still have room to improve and always will. I don't think I'll ever permanently get "There" because growth is a constant battle and the road is circular. Habits are constantly in the making. And if at the end of the day I can't get profitable, I'll have to come to accept that. But for now, it's still too early to call it, and too early to give up, no matter who thinks I can't make it.
How can I honestly take someone's negativity personally when I know they are part of the masses who often never hold any disciplines that require the true hard work of inner development? Of course they are going to be negative, it's the easiest thing in the world to do. Especially when the best examples they get of human triumph are from the movies instead of their own lives? And when the truths they get about trading are from the twisted media and stories of failure from a "Friend of a friend who knew a guy".
Monday, November 16, 2015
November 16th About Failure
I've been in a slump for awhile now. And being in a slump is like being in bed and being too damn tired to get out... But, once you for whatever reason (Who knows, maybe someone special is coming over) muster the will, that action changes your energy and you are out of bed and almost always glad you found the will to do it.
I came to this blog, and to the end of trucking with an idea in mind, that I would be some kind of day trader with a successful plan that was proven through back testing. Also, that I would be ferociously bodybuilding every day and tracking my macros and shit... Well, one thing led to another and I just fell way way off the wagon.
Backtesting was a real bitch, but I managed to do that, and my results showed me that the profit of 2618 trading wasn't worth the time, but also, my forward testing kept having me miss trades because even on a 1HR chart, the best setups happened too fast and I was left out.
The gym was very difficult, but the eating right, preparing the food and then inputting it into a spreadsheet... that was horrendous. I was sleeping 10 hours a day, and still tired and unmotivated when I got to the computer to backtest.
What I've lacked this entire time was structure. And dammit... I want to make a go at simplifying my routine so I give myself a better chance of accomplishing something. What I have realized lately, is that I only do things diligently when I am truly passionate about them. The problem, or at least the case with me, is that my passions vary wildly and sporadically. The reality, is that I've never actually felt passionate about going to the gym, or eating or tracking it... It's always felt like a chore. But the reality is, when the going gets tough, the tough get going. That's what I have taped to my door and I see it every time I leave the house. But guess what... Tough, is difficult. Tough is doing shit when you don't have the passion for it, not when it's easy. On a side note, don't live by something that sounds good, live by it because it makes sense.
These are the affirmations that I have taped to the mirror in the bathroom... I used to say them every day and have them memorized. I don't think it did any good other than reasserting what my desires were every day, and somehow, guilting me into staying in line a bit more than I would have otherwise. But look at the bottom of that. "My circumstances do not alter my accountability". I've always tried to practice really thinking about things that come into my mind, especially if it's a cliché. And while that's not a cliché, because I idolized the person those words came from I allowed them to pass right by my critical thinking filter. "My circumstances do not alter my accountability." That sounds so noble and romantic doesn't it? But guess what, it's not reality. Just like instant love between two strangers in a Disney movie, there's more to it than that. I'd now venture to say that all accountability is at least in some way, but probably always circumstantial. I used to also have another saying under my other one on the door that said "The tougher the going, the faster the growing". Well, ideally yes, but realistically not so. Some times the going gets so tough, that the growing stops. I recently hurt my back at the gym. I bulged a disk a few days before Halloween and have been recovering ever since. I take responsibility for the injury. It was a combination of a little too much weight and a lot of bad form. The point is, that now the going has gotten even tougher and the only growing happening is my knowledge that going tougher, can be counter productive. And no, I wasn't so blind and dumb to think that I could just super-man it. I was adding what seemed to be a small amount of extra weight than I had just pretty easily lifted. You can't expect a guy with an injured back to go to the gym and stress that injury because of some goal, that's even more counter productive than the initial injury.
Don't get me wrong, I like the no excuses part of it all. If I'm lazy, which I have been, I will straight up say it. I haven't done what needs to be done to get the results that I wanted. Count me among the masses. At least I accept it all on my own. No one to blame but me. Resistance holds all of us back from our potential in different ways, and it is pushing through that resistance that separates people. I want to push through. I want to look back and say "I did it". I realized something today.
Most, if not all of the great accomplishments in my life, have been at the hands of a passionate me. I thought I was passionate about trading, but I think what may be more accurate about me and my life, is that I'm passionate about making the best decisions and actions, and also learning from the lessons I'm given through some of the worst decisions and actions. I imagined I could translate that into trading I guess, which, I can... but, it's not the smartest choice in my mind right now.
So what have I come to at this moment? That robotic trading is the best course of action for me. It frees up time, it makes money, it's there when I can't be. I still want to manually trade news releases, as I seem to do well when I follow my rules and I don't necessarily have a robot that will do that for me the way I like. I still want to practice stock trading, as I may find out there's something to that as well. Maybe, just maybe, what is building in me, is a small passion to follow through with body building in spite of my lack of passion for it.
So today. as soon as I post this blog, I am going to get shit straight and start over. I am not saying I will be successful, I don't want to be a hopeful bullshitter. I am saying, that I haven't accepted failure, because I'm not finished.
I came to this blog, and to the end of trucking with an idea in mind, that I would be some kind of day trader with a successful plan that was proven through back testing. Also, that I would be ferociously bodybuilding every day and tracking my macros and shit... Well, one thing led to another and I just fell way way off the wagon.
Backtesting was a real bitch, but I managed to do that, and my results showed me that the profit of 2618 trading wasn't worth the time, but also, my forward testing kept having me miss trades because even on a 1HR chart, the best setups happened too fast and I was left out.
The gym was very difficult, but the eating right, preparing the food and then inputting it into a spreadsheet... that was horrendous. I was sleeping 10 hours a day, and still tired and unmotivated when I got to the computer to backtest.
What I've lacked this entire time was structure. And dammit... I want to make a go at simplifying my routine so I give myself a better chance of accomplishing something. What I have realized lately, is that I only do things diligently when I am truly passionate about them. The problem, or at least the case with me, is that my passions vary wildly and sporadically. The reality, is that I've never actually felt passionate about going to the gym, or eating or tracking it... It's always felt like a chore. But the reality is, when the going gets tough, the tough get going. That's what I have taped to my door and I see it every time I leave the house. But guess what... Tough, is difficult. Tough is doing shit when you don't have the passion for it, not when it's easy. On a side note, don't live by something that sounds good, live by it because it makes sense.
Don't get me wrong, I like the no excuses part of it all. If I'm lazy, which I have been, I will straight up say it. I haven't done what needs to be done to get the results that I wanted. Count me among the masses. At least I accept it all on my own. No one to blame but me. Resistance holds all of us back from our potential in different ways, and it is pushing through that resistance that separates people. I want to push through. I want to look back and say "I did it". I realized something today.
Most, if not all of the great accomplishments in my life, have been at the hands of a passionate me. I thought I was passionate about trading, but I think what may be more accurate about me and my life, is that I'm passionate about making the best decisions and actions, and also learning from the lessons I'm given through some of the worst decisions and actions. I imagined I could translate that into trading I guess, which, I can... but, it's not the smartest choice in my mind right now.
So what have I come to at this moment? That robotic trading is the best course of action for me. It frees up time, it makes money, it's there when I can't be. I still want to manually trade news releases, as I seem to do well when I follow my rules and I don't necessarily have a robot that will do that for me the way I like. I still want to practice stock trading, as I may find out there's something to that as well. Maybe, just maybe, what is building in me, is a small passion to follow through with body building in spite of my lack of passion for it.
So today. as soon as I post this blog, I am going to get shit straight and start over. I am not saying I will be successful, I don't want to be a hopeful bullshitter. I am saying, that I haven't accepted failure, because I'm not finished.
Thursday, September 17, 2015
Stats for My Real World Trading
If anyone is interesting in watching the real world performance of my Mouse Trap trading robot and my real money discretionary trading, I have two small live accounts of $1,000 each.
I figured I might as well get started and see if that robot can catch all the moves it's supposed to before I go to any larger amounts. Also, trading for fake pennies everyday, although is good for instilling habits, I'd rather make real pennies for my time.
If I can make a steady consistent gain of 5%-10% with little drawdown I may increase my account size on the discretionary trading.
I figured I might as well get started and see if that robot can catch all the moves it's supposed to before I go to any larger amounts. Also, trading for fake pennies everyday, although is good for instilling habits, I'd rather make real pennies for my time.
If I can make a steady consistent gain of 5%-10% with little drawdown I may increase my account size on the discretionary trading.
Wednesday, June 10, 2015
Robotic trading on my last leg of truck driving
Quick update. I'm on the road again tomorrow more than likely, but I wanted to setup my robot and run it on a few different pairs at the same time to see how that goes while I'm on my final stretch of being a driver.
I know it is cramped and cluttered, but it's on my laptop and I don't have a lot of space with 4 charts up. I'll keep trying to manage these independent markets with a remote connection while on the road.
We'll see what happens!
We'll see what happens!
Sunday, April 26, 2015
Starting to finally feel positive about my ability to make money
In the space of the last few months I have teetered back and forth between feeling negatively and positively about my abilities and future performance in the trading world shortly ahead for me.
When I came across Tim Sykes's material I got a rush of inspiration. I ordered his DVD How to make Millions. I hated the idea of trading stocks, but thought to myself "If this is the way to make money, I need to overcome that and do this."
I began to feel negative about Forex trading due to Tim expressing his negativity about it. It really threw me off. So I put the majority of my efforts towards learning his methods of stock trading.
In the last few weeks I have had a lot of time to digest things and I have also come across a man named Jason Stapleton on YouTube. He is a professional Forex trader and has some really excellent free material. I mean top notch no bullshit instruction. Consuming his material with lots of focus centered me quite a bit and allowed me to focus on some things. Some things I had forgotten, and some things I hadn't yet realized. Here are my thoughts:
Tim does indeed have a pretty awesome strategy. It not only makes sense, but is most importantly available to pretty much anyone who can open an account and start trading. If you are disciplined and do as he says, I believe you will over time make money. The biggest benefit of Tim's strategy in my opinion, is that it is quite predictable. Shady companies that pay promoters to pump up the stock price always fail eventually. In all honesty however, I feel that is where the advantages of his methods fall short in contrast to trading Forex.
On what will seem like a total side note, a long time ago I purchased a Trading robot from Rob Booker called "the Mouse Trap". I became interested in it after hearing Rob and his friend Chris Davison talk about it in one of his very early podcasts. I purchased the robot and backtested it in Metatrader and sure enough, it would turn a $10,000 deposit into millions over a period of years. Upon Seeing those results I had decided to leave my desktop on at home with the robot running to see how it did with live trading. As the numbers suggested, it only won about 15% of the time. I let it run long enough to lose a lot and then one good winner brought it back to where I had started it. Shortly after that, I decided I wanted to have my computer on the road with me so I took it along. Being that I couldn't keep that computer connected to the internet 24/7 I no longer ran the mouse trap, and thus eventually forgot about it altogether and began later on focusing on using the other robot I bought from Rob, "the Box".
Anyways, watching Jason's videos happened to remind me of a very critical element in the trading world: Statistics. More importantly, statistics derived from back testing. You see, when a methodology has very strict rule based entries and exits, it's performance can be repeated again and again through back testing and also applied to "forward testing". That is where Tim's strategy fails. Yes he has a track record of profitability, but it's his track record. And his entries and exits are based more on guidelines than strict mechanical rules. His track record is a direct reflection of his personal experience, which is entirely unique to him.
With the mouse trap, each entry is rule based and uses no subjectivity whatsoever. I was reminded of this while watching Jason's video about what he calls "The 2618" trade. I won't get into the details, but in the two and half hour video he shows you the precise rules for entry and exit that leave no room for subjectivity. He then shows you exact statistics that system has produced over a 12 month period. That is what I needed.
I needed numbers. I needed results. Why? Well, in another video Jason made the point of exactly why I needed them. Statistics give us a basis for belief, which when built to a level of certainty causes us to take massive action. Massive action then produces massive results, which again feed our beliefs. I am a person that has always taken a level of high action when I believe in something fully. Remember the network marketing company I maxed out my credit cards to be a part of? I spent that $3,000 because I had a statistical number I believed in, and that was a very small number. They had found that only about 3% of people responded and that was enough to get me thinking massive and acting massive.
The fact that Tim only provides guidelines effectively hampers one's ability to gain concrete back-tested data to build certainty on. I have a few other points in mind that I wish to express as well.
Anytime Tim speaks about leverage, he always speaks negatively about it and usually attaches Forex trading along with it for a group scalding. What I need to say is that Tim is always reminding us that penny stocks are the only financial instrument he knows of that moves 50% in a day, which is why he tauts it as the best way to "get rich". The point I want to make is that the leverage in Forex allows the currency market to basically scale it's gains and losses to that of Tim's penny stock realm. With that said.. Yes, yes, leverage can be dangerous, but so can any financial instrument in the hands of the uninitiated.
As I digested Tim's material internally while simultaneously taking in Jason's material, it began to become clear to me what had happened in my heart and mind. The same thing that happens to all who lose their personal sovereignty at the words of a Guru: You begin to believe without question what you are told. Here is Tim, a very successful trader worth millions, showing you exactly how he made his millions, telling you with authority that Forex trading and using leverage will get you essentially nowhere but owing your broker money. A light bulb came on over my head. Tim spoke so negatively about Forex trading because all he ever heard about was people losing money. He had always been obsessed with Stocks and hated on Forex without experiencing it for himself. Had he been successful in Forex, he'd probably be hating on stocks just like I did before I took the time to understand how they work. It doesn't matter who you are, or how much you know about your specialty... Your authority only covers what you yourself are an expert at. As a truck driver I have come across people who only drive trucks, that sit there and try to convince me I can't do what I do on my street bike, even though I do it all the time. I can't tell you how many people I have come across that have spoken with authority about things I can't do, that I have already done successfully. I simply realized that Tim was no different than someone telling me I'm going to destroy the transmission in my bike because I don't shift with the clutch. They don't know shit about what I do or how it works, and unfortunately, neither does Tim. In fact, Tim mentions over and over again throughout his materials, his ignorance of the Forex market. I am not bashing Tim about any of this, just expressing what came to light in my mind about it all.
So, aside from the Leverage issue, There are some other comparison in which I am now starting to feel that penny stocks are not as great as I initially thought. There is a long list of issues that may make mechanical Forex trading look much better by the end of this.
First of all is the giant setback of what is called the Pattern Day Trader Rule, which restrict anyone who has less than $25,000 in their account to only 3 trades per 5 day rolling period. Which ultimately limits you to two trades unless you plan on holding that third position until you can legally exit it again... With Forex you are free to trade as many times as you want.
A large part of Tim's strategy when playing pump and dump stocks, is going short. Well, if you plan on shorting a penny stock, you first have to reserve shares to short otherwise you risk missing the trade altogether. Secondly, for any stock below $2.50 you still have to put up collateral for that stock as if it were $2.50 anyways. Want to short 10,000 shares of a $.10 stock? Although the value of that trade is only $1,000 you'll need to have $25,000 in your account just to put the trade on. In Forex you trade whatever your account will allow you. After that issue is the short stock restriction. If the stock falls 10% on the day you can't short the stock unless it upticks first. In Forex you can short at any time the market will fill your order. Lastly is liquidity. In penny stocks, a lot of the volatility produced comes from the fact that there are very few shares to trade at times. I won't go into numbers, but the shift from penny stocks to the Forex market is literally going from one of the least liquid instruments to the most liquid instrument on Earth. For those of you who don't understand liquidity, liquidity refers to the ease of which you can enter and exit a transaction. Real Estate is very illiquid, the majority of high priced stocks are very liquid, and the currency markets are the most liquid. The larger position you transact, the more liquid you want your market to be, otherwise you suffer what is called "Slippage". That is when the market's supply cannot meet your demand and the price changes out of your favor until enough supply is met to fulfill your demand. I could explain in depth but now is not the time.
I truly love what Tim does. I am not knocking it in anyway and I am in fact glad I purchased his DVD. It's taught me some valuable things and I can carry that over to other parts of my trading. Well worth every penny and if you love stock trading you should go buy it.
It however as I've mentioned previously, does not come with built in predictable metrics you can build belief upon. You must first adhere to guidelines as best you can until you produce enough results to analyze for yourself. This can take an enormous amount of time, an amount that can hold many back. I am sure if someone had the time and interest they could create a set of strict, non-subjective rules regarding Tim's system and go backtest it for solid statistics, but I don't think that will even enter the minds of the people he is reaching because he doesn't think or teach from that frame of mind at all. I think the belief generated in the minds of his students comes mainly from testimonials of other successful students. The ones who have applied serious study and application of what Tim teaches and made it personal for themselves as much as Tim has made it personal for himself. I have simply lost interest for the time being as I need more to go on that other people successes. I need numbers, and Tim has no way to provide them.
The Mouse Trap on the other hand... I just ran a backtest for the last 16 months and got real hard numbers. It lost a small percentage in that time, but in the last few years has made a significant return. But that is not what matters to me at the moment and it is certainly not why I wrote this post. What matters, is that I know what I have to do. I have to stick to numbers, because I am a person that needs belief to act. I had so much doubt in myself since the inception of this blog, even with the incredible success of the robot in the early posts. Yes, I was kinda building a database that I could look back on later, but it was based on random feelings. There were no objective rules in place that would make any of that duplicable, just a hunch that over the long term I would make money. I still have that hunch, but I don't want fucking hunches I want belief.
So when I get home and have legitimate time, I need to make rules that will allow success to be definable and repeatable with a system that fits my personality. I will explore Jason's offering of the 2618 trade and probably others he has for sale, but I'm most interested in producing numbers with my methods described in this blog. Preferably in a market with none of the restrictions that, to me, outweigh the benefits of an eventual outcome.
When I came across Tim Sykes's material I got a rush of inspiration. I ordered his DVD How to make Millions. I hated the idea of trading stocks, but thought to myself "If this is the way to make money, I need to overcome that and do this."
I began to feel negative about Forex trading due to Tim expressing his negativity about it. It really threw me off. So I put the majority of my efforts towards learning his methods of stock trading.
In the last few weeks I have had a lot of time to digest things and I have also come across a man named Jason Stapleton on YouTube. He is a professional Forex trader and has some really excellent free material. I mean top notch no bullshit instruction. Consuming his material with lots of focus centered me quite a bit and allowed me to focus on some things. Some things I had forgotten, and some things I hadn't yet realized. Here are my thoughts:
Tim does indeed have a pretty awesome strategy. It not only makes sense, but is most importantly available to pretty much anyone who can open an account and start trading. If you are disciplined and do as he says, I believe you will over time make money. The biggest benefit of Tim's strategy in my opinion, is that it is quite predictable. Shady companies that pay promoters to pump up the stock price always fail eventually. In all honesty however, I feel that is where the advantages of his methods fall short in contrast to trading Forex.
On what will seem like a total side note, a long time ago I purchased a Trading robot from Rob Booker called "the Mouse Trap". I became interested in it after hearing Rob and his friend Chris Davison talk about it in one of his very early podcasts. I purchased the robot and backtested it in Metatrader and sure enough, it would turn a $10,000 deposit into millions over a period of years. Upon Seeing those results I had decided to leave my desktop on at home with the robot running to see how it did with live trading. As the numbers suggested, it only won about 15% of the time. I let it run long enough to lose a lot and then one good winner brought it back to where I had started it. Shortly after that, I decided I wanted to have my computer on the road with me so I took it along. Being that I couldn't keep that computer connected to the internet 24/7 I no longer ran the mouse trap, and thus eventually forgot about it altogether and began later on focusing on using the other robot I bought from Rob, "the Box".
Anyways, watching Jason's videos happened to remind me of a very critical element in the trading world: Statistics. More importantly, statistics derived from back testing. You see, when a methodology has very strict rule based entries and exits, it's performance can be repeated again and again through back testing and also applied to "forward testing". That is where Tim's strategy fails. Yes he has a track record of profitability, but it's his track record. And his entries and exits are based more on guidelines than strict mechanical rules. His track record is a direct reflection of his personal experience, which is entirely unique to him.
With the mouse trap, each entry is rule based and uses no subjectivity whatsoever. I was reminded of this while watching Jason's video about what he calls "The 2618" trade. I won't get into the details, but in the two and half hour video he shows you the precise rules for entry and exit that leave no room for subjectivity. He then shows you exact statistics that system has produced over a 12 month period. That is what I needed.
I needed numbers. I needed results. Why? Well, in another video Jason made the point of exactly why I needed them. Statistics give us a basis for belief, which when built to a level of certainty causes us to take massive action. Massive action then produces massive results, which again feed our beliefs. I am a person that has always taken a level of high action when I believe in something fully. Remember the network marketing company I maxed out my credit cards to be a part of? I spent that $3,000 because I had a statistical number I believed in, and that was a very small number. They had found that only about 3% of people responded and that was enough to get me thinking massive and acting massive.
The fact that Tim only provides guidelines effectively hampers one's ability to gain concrete back-tested data to build certainty on. I have a few other points in mind that I wish to express as well.
Anytime Tim speaks about leverage, he always speaks negatively about it and usually attaches Forex trading along with it for a group scalding. What I need to say is that Tim is always reminding us that penny stocks are the only financial instrument he knows of that moves 50% in a day, which is why he tauts it as the best way to "get rich". The point I want to make is that the leverage in Forex allows the currency market to basically scale it's gains and losses to that of Tim's penny stock realm. With that said.. Yes, yes, leverage can be dangerous, but so can any financial instrument in the hands of the uninitiated.
As I digested Tim's material internally while simultaneously taking in Jason's material, it began to become clear to me what had happened in my heart and mind. The same thing that happens to all who lose their personal sovereignty at the words of a Guru: You begin to believe without question what you are told. Here is Tim, a very successful trader worth millions, showing you exactly how he made his millions, telling you with authority that Forex trading and using leverage will get you essentially nowhere but owing your broker money. A light bulb came on over my head. Tim spoke so negatively about Forex trading because all he ever heard about was people losing money. He had always been obsessed with Stocks and hated on Forex without experiencing it for himself. Had he been successful in Forex, he'd probably be hating on stocks just like I did before I took the time to understand how they work. It doesn't matter who you are, or how much you know about your specialty... Your authority only covers what you yourself are an expert at. As a truck driver I have come across people who only drive trucks, that sit there and try to convince me I can't do what I do on my street bike, even though I do it all the time. I can't tell you how many people I have come across that have spoken with authority about things I can't do, that I have already done successfully. I simply realized that Tim was no different than someone telling me I'm going to destroy the transmission in my bike because I don't shift with the clutch. They don't know shit about what I do or how it works, and unfortunately, neither does Tim. In fact, Tim mentions over and over again throughout his materials, his ignorance of the Forex market. I am not bashing Tim about any of this, just expressing what came to light in my mind about it all.
So, aside from the Leverage issue, There are some other comparison in which I am now starting to feel that penny stocks are not as great as I initially thought. There is a long list of issues that may make mechanical Forex trading look much better by the end of this.
First of all is the giant setback of what is called the Pattern Day Trader Rule, which restrict anyone who has less than $25,000 in their account to only 3 trades per 5 day rolling period. Which ultimately limits you to two trades unless you plan on holding that third position until you can legally exit it again... With Forex you are free to trade as many times as you want.
A large part of Tim's strategy when playing pump and dump stocks, is going short. Well, if you plan on shorting a penny stock, you first have to reserve shares to short otherwise you risk missing the trade altogether. Secondly, for any stock below $2.50 you still have to put up collateral for that stock as if it were $2.50 anyways. Want to short 10,000 shares of a $.10 stock? Although the value of that trade is only $1,000 you'll need to have $25,000 in your account just to put the trade on. In Forex you trade whatever your account will allow you. After that issue is the short stock restriction. If the stock falls 10% on the day you can't short the stock unless it upticks first. In Forex you can short at any time the market will fill your order. Lastly is liquidity. In penny stocks, a lot of the volatility produced comes from the fact that there are very few shares to trade at times. I won't go into numbers, but the shift from penny stocks to the Forex market is literally going from one of the least liquid instruments to the most liquid instrument on Earth. For those of you who don't understand liquidity, liquidity refers to the ease of which you can enter and exit a transaction. Real Estate is very illiquid, the majority of high priced stocks are very liquid, and the currency markets are the most liquid. The larger position you transact, the more liquid you want your market to be, otherwise you suffer what is called "Slippage". That is when the market's supply cannot meet your demand and the price changes out of your favor until enough supply is met to fulfill your demand. I could explain in depth but now is not the time.
I truly love what Tim does. I am not knocking it in anyway and I am in fact glad I purchased his DVD. It's taught me some valuable things and I can carry that over to other parts of my trading. Well worth every penny and if you love stock trading you should go buy it.
It however as I've mentioned previously, does not come with built in predictable metrics you can build belief upon. You must first adhere to guidelines as best you can until you produce enough results to analyze for yourself. This can take an enormous amount of time, an amount that can hold many back. I am sure if someone had the time and interest they could create a set of strict, non-subjective rules regarding Tim's system and go backtest it for solid statistics, but I don't think that will even enter the minds of the people he is reaching because he doesn't think or teach from that frame of mind at all. I think the belief generated in the minds of his students comes mainly from testimonials of other successful students. The ones who have applied serious study and application of what Tim teaches and made it personal for themselves as much as Tim has made it personal for himself. I have simply lost interest for the time being as I need more to go on that other people successes. I need numbers, and Tim has no way to provide them.
The Mouse Trap on the other hand... I just ran a backtest for the last 16 months and got real hard numbers. It lost a small percentage in that time, but in the last few years has made a significant return. But that is not what matters to me at the moment and it is certainly not why I wrote this post. What matters, is that I know what I have to do. I have to stick to numbers, because I am a person that needs belief to act. I had so much doubt in myself since the inception of this blog, even with the incredible success of the robot in the early posts. Yes, I was kinda building a database that I could look back on later, but it was based on random feelings. There were no objective rules in place that would make any of that duplicable, just a hunch that over the long term I would make money. I still have that hunch, but I don't want fucking hunches I want belief.
So when I get home and have legitimate time, I need to make rules that will allow success to be definable and repeatable with a system that fits my personality. I will explore Jason's offering of the 2618 trade and probably others he has for sale, but I'm most interested in producing numbers with my methods described in this blog. Preferably in a market with none of the restrictions that, to me, outweigh the benefits of an eventual outcome.
Monday, January 5, 2015
Some testing results
First, here are some sweet pics of the sunset in colorado I took today. Also, accidents from yesterday in Illinois and Nebraska
Fuckin sweet I know ;P
Ok, this was a real pain in the ass to do, but I went back through each trade that was made and implemented the martingale risk profile. Here is one minor detail I came to find out. Over the two month test period from January to February of 2013 the largest string of losses was 13 in a row. There is just no way to double your position size that many times so I had to make a rule. I could only have 5 losses and then I would start my position sizing over again. At my last size I would be trading $16/pip even though with a 10k account I could technically trade for about $40/pip after a string of losses that would need that size. Here is how my position sizing went.
-$10
-$20
-$40
-$80
-$160
-$10
etc...
I did get lucky and have a few strings finally win on the last trade before the reset for a win of +$240. If that had not happened and one more loss had occured, the results would be quite different I think. I will have to save my charts and make copies of them using different data points. That will be quite intensive because that guy who I emailed about updating the robot has basically ignored me. I don't have a clue what's going on with him.
Definitely make sure you download this chart so you can zoom in and see it. this is a comparison of the 289 trades during Jan and Feb of 2013. I wasn't super accurate with my placement of the box, but my goal was to place it at the start of each new daily bar and leave it the entire length of the day.
The top chart is with original static position sizes using $1/pip and the bottom one uses the martingale position sizing as mentioned above.
The area with the largest drawdowns are obviously the string of losses. Click HERE to download an html file of all the original trades from my Metatrader platform. There is also more interesting data in the file at the top. If it doesn't work let me know, but you should just be able to open in right up in your browser.
So... Although this strategy did end up at a 9% profit after 2 months, 289 trades is too small a sample size and too narrow a range of time for me to feel comfortable enough to put any stock in this just yet. I'd love to have at least a thousand trades, or run the numbers on a different position sizing method for the same trades. If I had a robot that could do it all for me it would be so much easier but damn... I am even willing to pay the guy and he just won't respond.
I'll keep you in the loop of any other data I happen to figure out. Until then I suppose I'll be hard at work.
-Francisco
Fuckin sweet I know ;P
Ok, this was a real pain in the ass to do, but I went back through each trade that was made and implemented the martingale risk profile. Here is one minor detail I came to find out. Over the two month test period from January to February of 2013 the largest string of losses was 13 in a row. There is just no way to double your position size that many times so I had to make a rule. I could only have 5 losses and then I would start my position sizing over again. At my last size I would be trading $16/pip even though with a 10k account I could technically trade for about $40/pip after a string of losses that would need that size. Here is how my position sizing went.
-$10
-$20
-$40
-$80
-$160
-$10
etc...
I did get lucky and have a few strings finally win on the last trade before the reset for a win of +$240. If that had not happened and one more loss had occured, the results would be quite different I think. I will have to save my charts and make copies of them using different data points. That will be quite intensive because that guy who I emailed about updating the robot has basically ignored me. I don't have a clue what's going on with him.
The top chart is with original static position sizes using $1/pip and the bottom one uses the martingale position sizing as mentioned above.
The area with the largest drawdowns are obviously the string of losses. Click HERE to download an html file of all the original trades from my Metatrader platform. There is also more interesting data in the file at the top. If it doesn't work let me know, but you should just be able to open in right up in your browser.
So... Although this strategy did end up at a 9% profit after 2 months, 289 trades is too small a sample size and too narrow a range of time for me to feel comfortable enough to put any stock in this just yet. I'd love to have at least a thousand trades, or run the numbers on a different position sizing method for the same trades. If I had a robot that could do it all for me it would be so much easier but damn... I am even willing to pay the guy and he just won't respond.
I'll keep you in the loop of any other data I happen to figure out. Until then I suppose I'll be hard at work.
-Francisco
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