Wednesday, February 29, 2012


Here is a good definition of irony:

I am showing the whole world my real money contest account.  To date, I am down about 21%, and that includes a whopping 49% drawdown.  Whole lot of stinking going on.

Yet, I don't show you the net aggregate performance of all my accounts.  THAT is ironic, since overall I am on a pace to outdo my 2011 performance, which was a near triple digit percentage return year.

I suppose it is just as well.  If I showed my overall performance, and hid the contest results, I'd probably be winning the contest, but losing money overall!

Please keep the comments and questions coming.  Thanks for reading.

Monday, February 27, 2012

Don't Forget to Read Comments

I moderate the comments to this blog, so all the junk is filtered out.  All that is left are excellent questions and observations.

There were a bunch of top notch, insightful questions asked recently, and I have answered each one.  I guarantee it is worth your while to read them.

Please keep comments and questions coming!

Saturday, February 25, 2012

Still Flip Floppin'

My equity seems to be flirting with the $10,000 mark, which is what I started with.

The 5th place trader in the contest is at 45%, so I am quite far from catching these guys anytime soon.  So, I'll just stay the course, and follow the plan.

6 open trades currently: 1 big loser, 1 small loser, 2 right around breakeven, 1 good profit, and 1 really good profit.

If you have any questions about trading, just post them in the comments section.  I promise to answer in a future blog post.

Thanks for reading!

Wednesday, February 22, 2012

Where I'd Be - Fixed Sizing

A earlier comment from Honza asked: "Is it possible to show "converted" results without position sizing or to be more precise - with fixed sizing (single contract or least possible no. of contracts)?"

Right now, I am roughly +$500 for the year.  This is with aggressive position sizing - adding on to profitable positions quite a bit, and sometimes opening with 2x the baseline number of contracts.  Most of the time, I am close to being margined out (ie, I can't add any more positions).  Again, I do this just for the contest account - I do NOT recommend doing this in your accounts.

Interestingly, if I had done nothing but single contract position sizing with the 15 trades I have taken thus far (10 closed, 5 still open), I'd be up around $2975 right now.

That means my position sizing has thus far cost me almost $2500.

This is intriguing, since many people just look at entries and exits as being important.  They certainly are important, but so is position sizing and trade management.

This is one reason I caution clients to not include position sizing in their baseline strategy results.  Position sizing can obscure or even eliminate whatever edge your entries and exits might provide.  So, I recommend calculating strategy performance for 1 contract always, then later on applying position sizing.

I'll revisit this as time goes on, but for now, fixed position sizing is winning.

As always, comments and questions are encouraged.


The up and down and up motion of the equity curve is making me dizzy...

The plan for this week is to exit 1 trade tomorrow, and possibly look to add on to winning positions, if equity keeps moving up.  I'm a little flexible on the timing of adding positions, as some of this is dictated by margin requirements.

In my "normal" (non-contest) accounts, I have zero flexibility built in - I do exactly what the tested, proven strategies tell me to do.  This, I found, is the best way to reduce my trading stress level.

Monday, February 20, 2012

Trader and Actress

Since it is a US holiday today, there is no equity curve today.  Instead, here is an interesting tidbit about the trading contest I am in...

Most of you know legendary trader Larry Williams turned $10,000 into over $1.1 million in this contest back in 1987.  Pretty amazing.

What most people do not know is that a few years later, in 1997, he taught his daughter Michelle how to trade.  She entered the contest when she was only 17, and turned $10K into $100K.  Oh and by the way, her real career is Hollywood starlet -  she was nominated for an Oscar a few year ago.  Here is her story...

Saturday, February 18, 2012

Caution - Car Wreck Ahead!

It is funny.  Just when things seem to be moving in the right direction, along comes a WHUMP - that is the sound of the market smacking me around after a period of good days.  That sort of thing seems to happen a lot...

An equity crash like this is why I always caution friends and family when they say "I want some of that action!"  Usually all they see is the 50% per year annual returns I've had the past 3 years.  What they don't see are the drawdowns and equity whips.  And emotionally, many people would justifiably find these type of equity crashes hard to handle.  I totally understand why.

Anyhow, I'm back in negative territory for the contest.  But, like always, I'll stick with the plan, since the performance, while bad at -15%, is still within expectations.

Comments are welcome!

Wednesday, February 15, 2012

Equity Curve, 2/15/2012

Still bouncing around, but hopefully moving up.

I did add on to one profitable trade today.  Currently in 5 trades, profitable in 4 of them.  I will enter another new trade tomorrow - should have entered it today but could not get a decent fill.

As always, questions/comments are welcome.

General Info

Since a lot more people have started looking at this, I thought I'd add a few general comments...

I do not post here everyday with updates.

I will post when something interesting occurs in my equity curve, or the contest.  I will try at a minimum for once a week posts.

I usually post around midnight, since that is when I get the official equity number on my daily statement.

I will also post when I get a question or comment.

You can sign up to either follow this blog, or to get e-mailed when I make a new post.  That way you won't miss out on the action!

Someone asked how often I trade.  For this account, which is a different system/strategy than other non-contest accounts I have, I have made 14 "base" trades this year so far.  I am currently still in 5 of them.  They last from a week to a few months, unless I get stopped out.

When I say "base" that is the initial position.  Subject to available margin, and profitability of the position, I may add to the position.  I may also peel off contracts if I run into margin trouble (I am usually close to pushing margin limits, BECAUSE THIS IS A CONTEST.  I do not do this for regular accounts, and I do not recommend you do it either!).  I do not count this adding/taking off contracts in the 14 "base" number.

More than a test of entries, my approach may be more of a test of how well aggressively adding to winners does.  My first attempt doing so resulted in a nearly 50% drawdown!

Please feel free to ask questions or make comments.  Even if you think it is a "dumb" question, just ask.  The only "dumb" question is the one you don't ask.

And trust me, right now I am asking some really basic questions about stocks and scanners in the Tradestation forum right now (my handle is kevinkdog).  I don't know stocks, and have never worked with them like I do with futures, so I ask newbie questions there. I'm a little embarrased at first, but it is the best way to learn!


Contest Standings:

Monday, February 13, 2012

Back In Positive Territory

I have no idea what tomorrow will bring, but at least for today I am back into positive territory.

I've gotten quite a few questions, and your comments and questions are always welcome.  Here are some answers:

No, I do not trade my other accounts like this one.  This one is based on "high reward, high risk."

No, this is not the same strategy I won the contest with in 2006.

No, I do not offer this strategy to the public via signals or system sales.

Yes, this is real money I am trading with.

Happy Trading!

Saturday, February 11, 2012

Comments and Questions - Welcome

As you watch my journey during this year long trading contest, I encourage you to comment, ask questions, etc.

I can't give specific details about what I am trading, but I can provide general info about my strategy, and some specifics about my money management and position sizing.

Thanks in advance for your comments!

P.S. You can also be notified via e-mail when I post something new.  Just look for the "Follow by e-mail" link.

Friday, February 10, 2012

Close To Breakeven

Getting closer to breakeven for the year, but still way behind the Leaderboard...

Someone on Twitter commented that my 50% drawdown must have been due to emotions, because of that huge drop.

Actually, I've been sticking to the plan the whole year.  The problem is that the plan calls for aggressive position sizing - something I do not attempt in my other trading accounts.  To win the contest, I really have to swing for the fences, when it is appropriate.  So, early in January, I was up a lot, and a took a big swing.  I missed, but left myself in a position to recover.

And that is what I continue to try to do...

Monday, February 6, 2012

Someone asked: With such a huge drawdown, why didn't you quit?

Yes, the mid January drawdown was bad, and I do have a drawdown % threshold, based on the method I am trading, and the way I am trading this contest.  Everyone should have a "quitting" point in mind, whether it is based on drawdown, or based on something else.

Until I get to that drawdown point, I stick to my trading plan!

Current contest standings:

Wednesday, February 1, 2012

Big Drawdown After 1 Month

Well, here are my results after 1 month.  Big whopping drawdown - I piled on to winning positions too aggressively, and got burnt.

This contest is a marathon though, not a sprint.  Plenty of time to come back.