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Realistically Managed Accounts (By Reverse )

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Realistically Managed Accounts Discussion

Reverse
Aug 01 2011 at 18:01
8 posts
Hello,



I offer managed account services. It took about 5 years to perfect and come up with the current trading plan that I have now.
My monthly target return is NOT double digits %.


If you want double digits % return/month, I'm sorry but I can't offer this and this is why:

It would mean to take huge risks to attain double digits returns/month. The problem is that is not sustainable over the long term. Because even if I would be very careful about how I trade, the high leverage that I have to take in order to make double digits return/month would expose me to the so called 'fat tails' in the market.
We know that the market distribution is NOT Normal/Gaussian, in fact is the opposite, it exhibit many 'fat tails' and the next fat tail can be around the corner. This is why a robust Risk Management plan is required.

And yes, that ' x%risk / trade ' rule is nonsense. To preserve capital and in the same time have profits over the long term, it is mandatory to have a very complex risk management plan. Why? A complex one(once the errors eliminated from the model) take in consideration many more variables and helps the manager(me) to know what is the risk that I have on the market. Of course, we can't put faith 100% in this mathematical model to quantify the risk, instead I also use my experience as a 'Risk trader' to know when should I trust the math models and when not.



Why did I emphasized so much about risk? Because I see a lot of 'managers' here who think that they could provide double digits(over 10%) per month and if an investors invest with them, of course they will loose the investors money because over 10%/month is NOT sustainable over the long term. I guarantee 100% that is going to fail over the long term if double digits are wanted.


If you are investor who want realistically returns and want to discuss further, you can send me an email at the address below or go to my website.



Reverse
Aug 02 2011 at 08:55
8 posts
Result for July update on my website.

July: + 4.29% (after fee).

SIM
pip2cash
Aug 19 2011 at 07:47
423 posts
This is well said. Consistency over long term is the key point here.

Cheers,
SIM

Reverse
Aug 23 2011 at 20:47
8 posts
SIM,




Yes, you are right. We shouldn't focus too much over the short term, instead the focus should be over the long term.

Because the real distribution of returns are not shown in the short term. The real distribution appear over the long term.






.

me7062a
Aug 24 2011 at 20:28
6 posts
Hi Reverse,

I completely agree with you. I just found this page today, and the last 9 systems I've looked at on myfxbook were complete rubbish. Massive percentage gains, but a massive and unacceptable risk of ruin. Some even had negative pips, which means they are long term losers, guaranteed.

I came to fx from an online poker hobby, so thankfully I understand a lot about how short term gains are completely misleading, even if you have hundreds of trades (Poker is even more volatile than trading, and risk management is key to survival).

Oddly enough, the myfxbook analysis on 'risk of ruin' seems incredibly flawed.

More power to you, and thank you for posting an actually viable system with long term positive expected value.

me7062a

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