For small account, the scalability is not an issue because it's more unlikely it'll move the market.
It seems you miss the whole point of using market's money. Market's money is anti-martingle by nature which means you starts off just like any normal trading strategy. What this means is you don't try to make 10% per day at the first phase. As you have profit, you can risk more and more. Of course, "your profit" might get "wiped out" in which case you are back to your original capital which means you start small again just like any other strategy.
The striking difference only happens when the profit growth big. In this phase, profit growth is definitely bigger than 10% per day. This phase will make up for the first phase when you produce less that 10% per day.
The difference between market's money and highly leveraged trading is really about the total risk against your initial capital. It's more unlikely you'll blow up your account using market's money.
I did some tests about it few years back then and it basically breaks my jaw to think such result it's even possible with such little risk. Of course, there are certain prerequisites to use this in the first place.
Just my opinion, but this is thread should be put to bed, unless it's meant to be some kind of ironic combination of ideas put forth to provide levity for the serious trader. It's not only lame, but has the potential to be injurious to those new to trading and unaccustomed to proper money management .
Last edited by tigertrader; March 10th, 2011 at 08:26 PM.
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Using the markets money. I presume you are talking about making some profits and then using them to gamble recklessly right?
Or - in other words - make $1000 profit, then withdraw the original capital. Then put on a series of bets (mean reversion would keep you going longest) with small targets and insanely large stops. Or maybe sell credit spreads. Either way something where risk dwarfes reward which also equals a high win rate.
Either way - when you place bets like these, you are gambling and the laws of probability should give you a winning streak but also ensure that you will hand it all back.
Now - if I am wrong in my presumptions - why not spell out what you are doing and tell us how to implement your version of "using the markets money" in order to return 10% per day. Then we can properly analyze your methods and look at the probabilities.
I understand your issue but this is a forum.Why is everyone either 'bored' or asking for the thread to be closed?
No discussions = no forum.
People can choose not to participate. Personally, I think people will learn a lot if the "pro 10%ers" put forward their view on the types of system that could earn 10%, then we could look at the potential pitfalls.
Thus far all we have is "10% a day IS possible - and it will remain possible until you prove it isn't".
I hate to say this, but let's just put an end to this as this is getting pretty boring. Not many people pay respect to money management anyway so it's pointless to continue this discussion.
What? "That's not true, I believe money management is important". I hear you. Ask this to yourselves, how much time have you spent on your entry and exit rules vs how much you have spent to develop money management part? This fact should speak for itself. As for reference, expert believe trading consists of 60% psychology, 30% money management and 10% system. (money management is rated 3 times more important than system!)
Just believe what you want. If you don't believe 10% per day is not possible, then it's probably not possible for you. I know my own score and I'm pretty confident with my skill.
As much as I love to share, I'm just getting pretty irritated from being bashed everytime I decided to share something useful by people who don't even know what they are talking about. No offense though. Peace.
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I get it, you read Tharp, maybe even Ralph Vince. Probably neither one of them ever traded their own accounts successfully or managed money successfully. They are academicians whose only positive P&Ls are their book royalties.
Nevertheless, I am not arguing the importance of position sizing and expectancy or the role of MM in any trading system. What I am saying is that if you trade or manage a serious amount of capital, you cannot return 10% per day over any protracted period of time.
Show me an audited 2 year track record where a "substantial " amount of capital was traded/managed where these kind of returns were generated, and I will have $100 MM for you to manage the next week.
Last edited by tigertrader; March 11th, 2011 at 07:44 PM.
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