You made 275k in one year and you're worried about 25k loss the next year. You mean your account went down 300k, giving back previous years gain plus 25k? A 10% drawdown is normal. Something doesn't add up.
What exactly will you do for the next 6 months to determine if in fact you can make it as you did before... 1) You backtested your trade method and it has a positive expectancy for the current & most recent market years ? 2) You've been simulating trading and the results are simular to your backtest results...both positive ? Those piker years when you made "a little money" each of those years...is your personal situation the same today will you be doing the same trading routine that you did before in your piker years ? wrbtrader
Yeah you're right I admit that it doesn't add up. I just had an extreme difficult time dealing with losses over the course of a year. It's different. I was mentally shot. Infact there was a day I made more than my entire losses of the following year causing me to quit. It was my best day to that date. I don't remember the day but I do remember what happened. The sec banned short selling. So that meant that any buy moc order would have little resistance on the way up. Naturally I got long 1 million dollars(my limit at the time) worth of various stocks at 3 40 with an order to sell on close. I made 35 k in 20 minutes. Prudential comes to mind. It gapped up 5 or 6 points at the close. Had 1000 shares or somewhere there. That day alone was greater than the entire loss of next year. But somehow my mind couldn't rationalize that. It was the consistent 500 dollar losses day in and day out that are away at me to the point I broke down.
I am for the first time trying to educate myself through literature on trading. I have not done any back testing as of yet but am jottting down some ideas. I was never much of a technical trader although I was a good tape reader early 2000s. That became impossible with hfts taking over. Everything was fake and the micro moves became too fast for me to comprehend. I'm going to try and figure out ways to get some other edge. I was never that great a chart reader.
To answer the last part of your question. I'm thinking of putting up 25k at a prop firm .I will absolutely not rely on past methods that worked because I realise as I always have that market is dynamic. What works today may not work tomorrow. This is especially true for so called "methods" I see posted on es. The essence of the market is that when there is a large majority on a side or a method, that side will lose.
You made 275k in 2009 and lost 25k in 2010 and quit? Sorry but I don't believe a single word you are saying. Makes zero logical sense.
line up your ducks: 1.) low latency internet with good speed, meaning number of hops and ping times are important as speed. 2.) clearing cost, platform, right market, equipment, psyche, environment, planning etc. all need perfection. 3.) with most all the ducks in a row lined up all that is left is an edge with sound well thought out money mgt.
It is better to think in terms of percentages than money, especially if you more use to not having many losses. I changed in 2010 from concentrating on making most profits but jagged equity curve to working on least drawdown, this allows one to feel more confident to add size plus equity curve is smoother. Good luck. We all have different psychology sides to us, so say his worst downdraws were 5% and then it gets to 5 times that, wouldn't you be feeling something is majorly wrong? And not adapting to volatility can be huge concern, some that have never had turmoil in their trading might start blaming others as reasons why of their losing when it comes down to lack of knowledge due to occurrences they had not seen yet. I always laugh when traders say the "markets are acting weird", once you in the game decades, you have seen it all.