Aggressive Trading Systems, Stupid Fund Allocators & using acct balance as stop loss!
they do nothing
In my opinion many fund dont do anything !
That pseudoExperts dont take care of your money, if market goes up or down that is only your own problem.
I have seen that many funds did not go off from the shares markets when shares started to go down.
They dont loose your money to protect you, they do nothing !
I came across a number of trading systems that are designed to achieve high returns in a very short period of time but with large maxDD too.
There are some fund allocators with, in my opinion, very stupid mentality of selecting traders using these systems with the belief of allowing some of their accounts to blow up but still remain profitable if only 1/2 of the surviving ones achieve more than 100% a month.
Please share your thoughts on this approach. i.e using your account balance as a stop loss.
There is this idea from ET forum which would be nice if someone could program an EA based on it and share it here or with me.
Risk 1K to make 1.5 mil:
Traditional pyramiding on your initial position tells you to adds to your position in smaller and smaller increments. But look what happens when I add to a position in a Fibonacci sequence on the ES every 20 points along with a Stop placed at 20 points below the last purchase:
Qty, Price, Avg Price, Stop, Profit
1, 1400, 1400, 1380, ($1,000)
1, 1420, 1410, 1400, ($1,000)
2, 1440, 1425, 1420, ($1,000)
3, 1460, 1440, 1440, 0
5, 1480, 1456.67, 1460, $2,000
8, 1500, 1474, 1480, $6,000
13, 1520, 1492.12, 1500, $13,000
21, 1540, 1510.74, 1520, $25,000
34, 1560, 1529.77, 1540, $45,000
55, 1580, 1549.09, 1560, $78,000
89, 1600, 1568.62, 1580, $132,000
144, 1620, 1588.30, 1600, $220,000
233, 1640, 1608.08, 1620, $363,000
377, 1660, 1627.93, 1640, $595,000
610, 1680, 1647.83, 1660, $971,000
987, 1700, 1667.77, 1680, $1,580,000
Possibly a lot of these blown up hedge funds had similar ideas and simply traded it with other people's money and collected big fees until it blew out...Good luck with that.
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I came across a number of trading systems that are designed to achieve high returns in a very short period of time but with large maxDD too.
There are some fund allocators with, in my opinion, very stupid mentality of selecting traders using these systems with the belief of allowing some of their accounts to blow up but still remain profitable if only 1/2 of the surviving ones achieve more than 100% a month.
Please share your thoughts on this approach. i.e using your account balance as a stop loss.
There is this idea from ET forum which would be nice if someone could program an EA based on it and share it here or with me.
Risk 1K to make 1.5 mil:
Traditional pyramiding on your initial position tells you to adds to your position in smaller and smaller increments. But look what happens when I add to a position in a Fibonacci sequence on the ES every 20 points along with a Stop placed at 20 points below the last purchase:
Qty, Price, Avg Price, Stop, Profit
1, 1400, 1400, 1380, ($1,000)
1, 1420, 1410, 1400, ($1,000)
2, 1440, 1425, 1420, ($1,000)
3, 1460, 1440, 1440, 0
5, 1480, 1456.67, 1460, $2,000
8, 1500, 1474, 1480, $6,000
13, 1520, 1492.12, 1500, $13,000
21, 1540, 1510.74, 1520, $25,000
34, 1560, 1529.77, 1540, $45,000
55, 1580, 1549.09, 1560, $78,000
89, 1600, 1568.62, 1580, $132,000
144, 1620, 1588.30, 1600, $220,000
233, 1640, 1608.08, 1620, $363,000
377, 1660, 1627.93, 1640, $595,000
610, 1680, 1647.83, 1660, $971,000
987, 1700, 1667.77, 1680, $1,580,000
Possibly a lot of these blown up hedge funds had similar ideas and simply traded it with other people's money and collected big fees until it blew out...