2012 THE YEAR IN REVIEW
Now that the year is done it is time to establish some goals for 2013 and also review 2012 to see what lessons can be learned.
First, my goals for 2013
1) Get our new web site up and running and make it as professional as possible and distinguish it from what others are doing.
2) Make at least a 100% return in every trading account I have - hopefully much more than that
3) Get completely clear mentally of the PFG debacle
4) Time the coming collapse correctly - it may not happen in 2013
5) Continue to be honest in spite of the pressure not to be by my competition
6) Continue to provide the best content I can in my daily blog entries which will shift to daily market commentary in the new web site.
Most of these are self explanatory, however there are some detailed explanations required for some of these items.
WEB SITE
The new web site is going to be a work in progress. We are attempting to build a frame work that allows us to branch into all sorts of things from videos to chat rooms to webinars. This is a lot of work but I do find the part of this that is very appealing to me is trying to help others succeed. Any suggestions are always welcome as long as they are not negative. I am not going to be as tolerant of negative emails as I have been. If your desire is to be a jerk you need to go elsewhere. For those of you who have talked to me on the phone you know I am a very nice person. One of my faults is trying to please everyone and that is part of the process of transitioning into a business. I cannot please everyone and will not try to anymore. If you choose to send negative messages over and over, those messages will just be ignored and you can go elsewhere. If you are upset with me because I did not respond within a few minutes telling you what symbol your data provider has for a particular market, step back and think about that for a moment.
The new web site is going to be a work in progress. We are attempting to build a frame work that allows us to branch into all sorts of things from videos to chat rooms to webinars. This is a lot of work but I do find the part of this that is very appealing to me is trying to help others succeed. Any suggestions are always welcome as long as they are not negative. I am not going to be as tolerant of negative emails as I have been. If your desire is to be a jerk you need to go elsewhere. For those of you who have talked to me on the phone you know I am a very nice person. One of my faults is trying to please everyone and that is part of the process of transitioning into a business. I cannot please everyone and will not try to anymore. If you choose to send negative messages over and over, those messages will just be ignored and you can go elsewhere. If you are upset with me because I did not respond within a few minutes telling you what symbol your data provider has for a particular market, step back and think about that for a moment.
The PFG situation has been a very taxing situation for me and a learning experience. Still to this day 5 months later I have tremendous internal anger over this. What is happening is that it is becoming focused in an entirely different direction, the bankruptcy process. My goal is to somehow affect some change to the system eventually where the system does not thrive on the victims. I find myself incredibly angry at the attorneys who thrive on victims. We have to somehow get the process changed so that there is skin in the game for the attorneys and they don't just make millions by stalling the process and getting their hourly rates along the way. I would love to start a company that can help bankruptcy victims and screw the attorneys but the irony is you need attorneys to set that up, so again they make money regardless of the outcome.
Net net,the goal is to somehow get back at the attorneys and I am not quite sure yet how to do that, but I set aside some thinking time every day to this end and hopefully eventually I will come up with something. I guess they area just gaming the system, but it seems that having your goal be to take money from victims of fraud should be something anyone with a conscience should have a hard time with. They are nothing more than predators and a bunch of cowards who feast off defenseless people. If they would just make a few regulatory changes a lot of this could be fixed, but there does not seem to be the political will to do it.
TRADING RETURNS
It is impossible to predetermine what your trading results will be in advance. Certainly 100% returns are a good accomplishment so I just throw that out as a benchmark. If I get there or beyond it will not be a stopping point. I just think you have to have something in mind going into a year just to keep you focused on what you are doing. I have different accounts trading different approaches, so this is going to vary from account to account. I remember a friend of mine many years ago bragging to me about a 300% return in a month and I ultimately found out that it was a betting account where he started with $5 and built it to $15 betting on forex movements. Obviously when it is only $10 which is not even enough for a decent bottle of wine, it does not matter that it is a 300% return. As your account balances get bigger the % returns will be smaller if you are using prudent money management. This goal of 100% is just a benchmark I am using that I should be able to beat if I trade well but time will tell.
TRADING RETURNS
It is impossible to predetermine what your trading results will be in advance. Certainly 100% returns are a good accomplishment so I just throw that out as a benchmark. If I get there or beyond it will not be a stopping point. I just think you have to have something in mind going into a year just to keep you focused on what you are doing. I have different accounts trading different approaches, so this is going to vary from account to account. I remember a friend of mine many years ago bragging to me about a 300% return in a month and I ultimately found out that it was a betting account where he started with $5 and built it to $15 betting on forex movements. Obviously when it is only $10 which is not even enough for a decent bottle of wine, it does not matter that it is a 300% return. As your account balances get bigger the % returns will be smaller if you are using prudent money management. This goal of 100% is just a benchmark I am using that I should be able to beat if I trade well but time will tell.
PFG
The single most important lesson that everyone should learn from PFG is Commodity firms (FCM's) are nowhere near safe places to have your money. At this point it is completely clear that you are on your own to protect your money. The regulators have made it clear they have no intention of doing anything to make your money safe in an FCM. You can speculate all you want about the reasoning but their actions say it all. Your money is at risk in an FCM, PERIOD, and it will be for the foreseeable future.
The single most important lesson that everyone should learn from PFG is Commodity firms (FCM's) are nowhere near safe places to have your money. At this point it is completely clear that you are on your own to protect your money. The regulators have made it clear they have no intention of doing anything to make your money safe in an FCM. You can speculate all you want about the reasoning but their actions say it all. Your money is at risk in an FCM, PERIOD, and it will be for the foreseeable future.
I think the best possible plan is a two pronged approach. First, put your money only in firms that have either a sweep into an FDIC or SIPC insured account. Second, even with that step being taken, a failure of a firm could result in a very long time before your get your money back. The first and best choice is to form a legitimate company in Canada and get their government insurance. If you can't do that only put money you can afford to have frozen for two years into an FCM. Even if an FCM has an insured account with FDIC or SIPC insurance, you could have to wait a very long time to get your money back. In bank failures it has been typical for it to be a minimum of 6 months before you get your money back that is insured by the FDIC. If we happen to get into another difficult period for the markets I am pretty sure we are going to see some FCM's go down. There firms often operate on very small margins and they don't have much wiggle room.
If your livelihood is trading like mine is, these are just the conditions at hand, and it falls upon us to be diligent. The final thing you should be doing is monitoring your firm or through ratings services. In both the MF and PFG cases, the ratings firms had both them rated very low before they blew up. Had I been monitoring that I would have likely transferred some of the money elsewhere and minimized the pain I have experienced.
I need to take some of the blame for trusting in the government statements they made where they stated after MF that all the other FCM's had been audited and were fine. You can almost never believe anything a CEO or government person says during a time of crisis. I should have moved some money the minute that lie was stated by the CFTC. Do not have all your eggs in one basket have it split in two pieces or more if possible. If you are just starting off that may not be feasible, but as soon as you build up to $50,000 split that in half. The days of a million dollar trading account at one firm are gone, it is too risky. You have to have significant money to make significant money, so it is likely we all are going to have to be doing a lot of wiring back and forth etc.. but that is a new cost of doing business. It is still a great business and a way to get free of all the day in day out BS so many people have to deal with.
THE COMING COLLAPSE
Although I am dead convinced the end game to what the Obama Administration is doing can only lead to one outcome, timing this wipe out is another matter. It is not imminent in spite of all the negative things that are happening. I don't see an immediate catalyst for this right now. It is something I will be covering in my Newsletter when I see this coming. It does appear the FED is going to be able to hold this off for the time being.
HONESTY
This is an easy category for me. The challenge for me is not to be too much of a loose cannon. I am opinionated and I am what I am. I do put money behind my opinions which I feel makes me different. I will never go down the road some companies do where they misrepresent their track records to try and get clients. I am not sure how some of these people get away with doing this without being arrested. It should be illegal to claim you made a huge gain on a market turning point you called when you were actually telling people the opposite at the time. I don't know why it isn't? Although it can be seen by reviewing my archives here that my market calls have been pretty good, I have blown some of them. I don't see why this should ever be misrepresented to people and how people who do that live with themselves.
BLOG GOING FORWARD
The Blog is going to be integrated into the web site once the design is complete. I think it will be much more professional in how it appears. I do not plan on any changes in terms of the content. However, I am planning on moving toward giving some different content on a daily basis to members at some point. First things first, the new site has to be launched which is probably going to take another month since the redesign is crawling at this point.
LESSONS FROM 2012
TRADING SERVICES
This has been a big learning curve for me this year. It has been a number of years since I last did this and things have changed. The good news is that there are a lot more people out there trading and looking to learn how to succeed doing so. The bad news is there are a lot of people misrepresenting reality. I will never forget that day I got that post card from one prominent newsletter writer that I know claiming to have picked the exact low in 2009 when in fact he told all his subs ( I was one at the time ) the whole way up to short the market and we were heading to 5500. For someone who is as straight forward as I am, blatant liars like this always shock me. I guess that is on me.
However, I am never going to do something like that which I suppose will keep my client base smaller, so be it. There are also some lessons I have learned about the services and what people can and can't use effectively. The signals are just that, signals. It is up to individuals to use them any way they see fit. There are varying levels of experience which does effect the products we introduce. I urge people to proceed slowly learning trading. This is a craft and it takes time no matter how bright or determined you are, you cannot force this. It can be a frustrating process but can also be very rewarding and that is why we all are at this to begin with.
We have seen the Bond System have a huge run up and it just had it's first losing month of the year. Some people have bailed out on it which I knew would happen. This is why I have state over and over and over ad nauseam, systems will have periods where they lose money. From the beginning of the year it is up over $30,000, which is hard to beat. What I suggest to people who might be considering this or any other system from anyone else for that matter, is the following.
Wait for a losing period to start trading it. Every time I have posted the big winning streak results in the blog new people have signed up, it has made me hesitant to post them. This is the wrong way to trade a system. With mechanical systems you need to begin with them if possible after they have had a loss or two. This system has been about 80% wins this year so that still means 20% of the trades have been losers. Losing trades do happen. It is the same idea as buying pullbacks in trends. One thing that can happen is the market or system can keep running and then you miss out on big runs, there is no perfect answer to everything.
I am starting an Auto Trade program through Robbins Trading with the Bond System in January. This is a setup where I have an account there and execute all the trades in it and followers automatically get the same trades done in their accounts. It is all electronic so when my account gets a fill so do the others that are linked to it. I am really happy the system is having a bad period now, because it is more likely it has a really good one coming. It may not it is just a probability, nothing is certain. History has shown that it rebounds nicely from bad periods so I am betting on that. I am practicing what I just preached.
If you are interesting in this call Ryan Spritz at Robbins Trading in Chicago, he is running this, 800-453-4444.
EMINI SYSTEM
Yes I do have an ES trading system. I know everyone loves to trade this market and as a result it is a very difficult market to trade. I am rolling this out at Robbins also like with the Bonds with an Auto Trade arrangement. It has to run for a few months first, so I put in $15k into an account to run the trades with and we will see how it does. Please proceed slowly with these types of things. Systems are systems, they are not the holy grail for trading. They are good tools and are valuable but they are one of the things I use not the only. My discretionary trading has always made me more money over time than my systems have. Let's see how the ES system does and once it has a record good, bad or otherwise, that is public, it will be discussed in the blog.
MARKET CALLS FROM 2012
Overall my calls were pretty good although I blew a few.
I stated how I did not feel the Bond Market was a bubble and that has proven correct thus far. The Bond Market held up very well most of the year. It could still be a bubble since timing the collapses of these is a very difficult proposition. I don't think we will see a meaningful Bond market decline until we see a real economic recovery take shape. The FED is going to keep short term rates low until we see real growth come back and that does not appear to be in the cards any time soon.
Mixed reviews on Gold but good short term calls. I am on record as stating this is a bubble and that this market is ultimately going all the way back down under $500 eventually. However, I also stated at the time that when we were in the $1500 area that if we held that level life was still good for Gold bugs and we did hold that level. That level still remains the key level so as long as we hold above that I think a trading range environment can still take place. If we break under $1500 you can turn out the lights here and all the experts will come out and say I told you so.
Stock Market - I got this mostly right for the balance of the year.
Yen - recent call for a low was incorrect
For those who want to go through more of them you can read the archives, it is time to look forward.
I think the way things look at this moment we are likely to see some more downside action for the most part in the next couple of months in stocks, currencies and a dollar rally.
HAPPY NEW YEAR and best wishes for a profitable new year!
If your livelihood is trading like mine is, these are just the conditions at hand, and it falls upon us to be diligent. The final thing you should be doing is monitoring your firm or through ratings services. In both the MF and PFG cases, the ratings firms had both them rated very low before they blew up. Had I been monitoring that I would have likely transferred some of the money elsewhere and minimized the pain I have experienced.
I need to take some of the blame for trusting in the government statements they made where they stated after MF that all the other FCM's had been audited and were fine. You can almost never believe anything a CEO or government person says during a time of crisis. I should have moved some money the minute that lie was stated by the CFTC. Do not have all your eggs in one basket have it split in two pieces or more if possible. If you are just starting off that may not be feasible, but as soon as you build up to $50,000 split that in half. The days of a million dollar trading account at one firm are gone, it is too risky. You have to have significant money to make significant money, so it is likely we all are going to have to be doing a lot of wiring back and forth etc.. but that is a new cost of doing business. It is still a great business and a way to get free of all the day in day out BS so many people have to deal with.
THE COMING COLLAPSE
Although I am dead convinced the end game to what the Obama Administration is doing can only lead to one outcome, timing this wipe out is another matter. It is not imminent in spite of all the negative things that are happening. I don't see an immediate catalyst for this right now. It is something I will be covering in my Newsletter when I see this coming. It does appear the FED is going to be able to hold this off for the time being.
HONESTY
This is an easy category for me. The challenge for me is not to be too much of a loose cannon. I am opinionated and I am what I am. I do put money behind my opinions which I feel makes me different. I will never go down the road some companies do where they misrepresent their track records to try and get clients. I am not sure how some of these people get away with doing this without being arrested. It should be illegal to claim you made a huge gain on a market turning point you called when you were actually telling people the opposite at the time. I don't know why it isn't? Although it can be seen by reviewing my archives here that my market calls have been pretty good, I have blown some of them. I don't see why this should ever be misrepresented to people and how people who do that live with themselves.
BLOG GOING FORWARD
The Blog is going to be integrated into the web site once the design is complete. I think it will be much more professional in how it appears. I do not plan on any changes in terms of the content. However, I am planning on moving toward giving some different content on a daily basis to members at some point. First things first, the new site has to be launched which is probably going to take another month since the redesign is crawling at this point.
LESSONS FROM 2012
TRADING SERVICES
This has been a big learning curve for me this year. It has been a number of years since I last did this and things have changed. The good news is that there are a lot more people out there trading and looking to learn how to succeed doing so. The bad news is there are a lot of people misrepresenting reality. I will never forget that day I got that post card from one prominent newsletter writer that I know claiming to have picked the exact low in 2009 when in fact he told all his subs ( I was one at the time ) the whole way up to short the market and we were heading to 5500. For someone who is as straight forward as I am, blatant liars like this always shock me. I guess that is on me.
However, I am never going to do something like that which I suppose will keep my client base smaller, so be it. There are also some lessons I have learned about the services and what people can and can't use effectively. The signals are just that, signals. It is up to individuals to use them any way they see fit. There are varying levels of experience which does effect the products we introduce. I urge people to proceed slowly learning trading. This is a craft and it takes time no matter how bright or determined you are, you cannot force this. It can be a frustrating process but can also be very rewarding and that is why we all are at this to begin with.
We have seen the Bond System have a huge run up and it just had it's first losing month of the year. Some people have bailed out on it which I knew would happen. This is why I have state over and over and over ad nauseam, systems will have periods where they lose money. From the beginning of the year it is up over $30,000, which is hard to beat. What I suggest to people who might be considering this or any other system from anyone else for that matter, is the following.
Wait for a losing period to start trading it. Every time I have posted the big winning streak results in the blog new people have signed up, it has made me hesitant to post them. This is the wrong way to trade a system. With mechanical systems you need to begin with them if possible after they have had a loss or two. This system has been about 80% wins this year so that still means 20% of the trades have been losers. Losing trades do happen. It is the same idea as buying pullbacks in trends. One thing that can happen is the market or system can keep running and then you miss out on big runs, there is no perfect answer to everything.
I am starting an Auto Trade program through Robbins Trading with the Bond System in January. This is a setup where I have an account there and execute all the trades in it and followers automatically get the same trades done in their accounts. It is all electronic so when my account gets a fill so do the others that are linked to it. I am really happy the system is having a bad period now, because it is more likely it has a really good one coming. It may not it is just a probability, nothing is certain. History has shown that it rebounds nicely from bad periods so I am betting on that. I am practicing what I just preached.
If you are interesting in this call Ryan Spritz at Robbins Trading in Chicago, he is running this, 800-453-4444.
EMINI SYSTEM
Yes I do have an ES trading system. I know everyone loves to trade this market and as a result it is a very difficult market to trade. I am rolling this out at Robbins also like with the Bonds with an Auto Trade arrangement. It has to run for a few months first, so I put in $15k into an account to run the trades with and we will see how it does. Please proceed slowly with these types of things. Systems are systems, they are not the holy grail for trading. They are good tools and are valuable but they are one of the things I use not the only. My discretionary trading has always made me more money over time than my systems have. Let's see how the ES system does and once it has a record good, bad or otherwise, that is public, it will be discussed in the blog.
MARKET CALLS FROM 2012
Overall my calls were pretty good although I blew a few.
I stated how I did not feel the Bond Market was a bubble and that has proven correct thus far. The Bond Market held up very well most of the year. It could still be a bubble since timing the collapses of these is a very difficult proposition. I don't think we will see a meaningful Bond market decline until we see a real economic recovery take shape. The FED is going to keep short term rates low until we see real growth come back and that does not appear to be in the cards any time soon.
Mixed reviews on Gold but good short term calls. I am on record as stating this is a bubble and that this market is ultimately going all the way back down under $500 eventually. However, I also stated at the time that when we were in the $1500 area that if we held that level life was still good for Gold bugs and we did hold that level. That level still remains the key level so as long as we hold above that I think a trading range environment can still take place. If we break under $1500 you can turn out the lights here and all the experts will come out and say I told you so.
Stock Market - I got this mostly right for the balance of the year.
Yen - recent call for a low was incorrect
For those who want to go through more of them you can read the archives, it is time to look forward.
I think the way things look at this moment we are likely to see some more downside action for the most part in the next couple of months in stocks, currencies and a dollar rally.
HAPPY NEW YEAR and best wishes for a profitable new year!
5 comments:
hi Chris,
It's thrilled to hear of 100%/year trading return. Have you achieved that kind of return before? Did you use more than the standard 2% risk per trade while trading that?
Thanks. Happy new year and hope we all get very good results in 2012!
TraderJ.
Yes I have using 2% risk
Chris...seeing your favorite movie is Trading Places...do you follow a turtle trading process?
crude oil?
Not sure how this relates? There is not anyone in Trading Places that uses any of the Turtle strategies. That movie is mostly about pit trading and Turtle strategies are 20 day high and low breakouts/breakdowns and the like.
Love that movie especially since my contest trophy from last year was presented in the pits
it is very unfortunate people spend more time selling products than actually trading. it is hard to compete with them, since they really need the money and must lie constantly to potential subs. then they write book, knowing their time is better well spent writing than trading. that speaks volumes. full disclosure usually works. show statements, and i wish people started to sue the fake snake oil salesmen on the web.
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