Monthly Archives: June 2015

Recent developments

Today I wanted to talk about my views on trading chatrooms, forums and groups. I personally believe they are the most discouraging places for a trader to participate in. In any of them that I have participated I have always been the most correct person with my calls. But people ignore when I am right and just focus on the times I am wrong. I usually get banned from them and everyone accusing me of sucking. The herd mentality is so obvious. Well look, 90% of traders lose. The losers tend to cluster onto groups, chatrooms and forums. So the rate of losers in them is even higher.

On another note, I have decided to quit discretionary trading. I know this is a big decision as I learned trading through discretionary trading. My Dukascopy contest results are completely based on discretionary trading. But now I have systematic methods that are much much more stable than discretionary trading. I may go back to discretionary trading someday in the future. I’ll admit I love it. But I just can’t handle the volatility in returns going from month to month. One month I’m up 4000 pips the next month down 4000 pips. I’m going through wild profits and wild drawdown months recently. My systems are more like a stable 500 pips a month. Also with systematic trading I just have to trade a few minutes a day if it is off dailies. Recently I have had some frustrating experiences with discretionary trading. The market has been behaving very odd. It just is no longer worth it to continue discretionary trading for now. I will admit there is a catch that discretionary trading can allow really massive profits and large executable size. It’s only worth discretionary trading if you have a pool of $100B+ and use 5:1 leverage cap. Something which I don’t have now.

From now on I am going to test new systems on my Dukascopy contest account to just get a stable 30% per month. Nothing fancy anymore. I’m looking at maintaing my outlier status in PnL and Pip points on the Dukascopy contest. Not looking to win the contest at all.

Study of Dukascopy Contest

I recently took a Statistics class at UCLA. It was one of the funnest college courses I took. Anywho, I have decided to apply some of the principals from my statistics class to my Dukascopy contest results. It’s clear from my studies that I am a massive outlier.

I’m going to have to admit. I don’t get anywhere near the amount of recognition that I should from my contest results. This is because the framers of the contest focus too much on monthly statistics and don’t look into the overall performance of a trader. It’s been obvious since 2011 to the public that I’m going to the top. In the time over the Dukascopy Contest I have achieved many things. Some including getting the most PnL, getting the most PnL unleveraged(pip points), getting my portfolio in the 99.9th percentile the most times.

Most people just look at my contest results as just random luck and think I don’t have any special skill in FX(let alone become the richest on the planet). Well that’s just cause they’re stupid with statistics. There has been a total of 5,000 people in the contest and no one has come close to my achievements in the contest history. I would argue from my results it is clear I have a skill in trading that comes in the 99.99th+ percentile. In particular my statistical studies were done using the Prize Leaders page to assess the top 1%. The chances of someone getting a compounded rate of return equivalent to mine is less than 1 in a billion.

1. I have won in the 99.9th Percentile 4 times

No one else has won in the 99.9th percentile more than once. The probability of scoring once in the 99.9th percentile out of  24(the amount I have tried) tries is 1 in 41. The probability of scoring in the 99.9th percentile 4 times out of 24 tries is 1 in 2.8 million.

2. I have the most accumulated PnL

I have the highest accumulated PnL in contest history at $3.8M. This puts me at 3.27 standard deviations(99.9th percentile) above the mean of 99th percentile of traders on the contest. This implies I’m in the 99.999th Percentile of traders(1 in 100,000).

3. I have the highest compounded rate of return on 10:1 leverage by a far margin

I think the most impressive statistics is computing the returns of traders based on if they were trading at 10:1 instead of the 100:1 on the contest. My returns come out at the top at 3300%+. This is an impressive 5.87 standard deviations above the mean of the 99th percentile. This implies I’m in the 99.9999999th+ percentile of traders(less than 1 in a billion).

I have attached data to review.

Dukascopy Contest Studies

Massive breakthroughs

I think it is seriously possible to average 20% a month. I just made a system that does this. The only problem is that it only works on a low executable size. Up to $2B. But still larger than 99% of the systems out there. I have made some massive breakthroughs in the last week.