Thread by @theBuoyantMan

The aggressive compounding experiment is officially a failure. 😅

As in, I have reached the point of no return/ruin, at about -83% drawdown.

This was due to two predominant mistakes.

The first mistake: for the first 10 odd trades upto like 50% drawdown, I was executing the stoplosses wrongly.

I discovered this only on that big drop one day where bnf went 300+ points in 5m when my system hadn't exited.

Bugs. 😑

Had it not been for that bug, I would still be around 45 to 50% drawdown range.

Second major mistake was oversleeping on that one day and missing that 400point trade.

That would have compensated current losses. That didn't happen. So losses that followed aggravated drawdown.

What I have learnt in this very short lived experiment:

1. Everyone can replicate Madan's experiment with a decent system. But timing and proper position sizing is very very important.

2. Aggressive position sizing will almost always promise risk of ruin. If your timing is good, you will grow your account early on to get conservative and minimise that risk. If you're not lucky with timing, it will be similar to my case.

3. No matter what you do in trading, you can succeed with even a half decent system if you have rock solid money, risk, and position management.

You will fail even if you have a super impressive system, but trade with high risk, very poor position and risk management.

I ll go and drink some water to drown my sorrow.

And then add capital again and start compounding it conservatively.

The main takeaway is that, execution matters a lot more than we give weightage to.

This is an undeniable truth.

Positional also - you may be able to get away with one or two execution related mistakes here and there. But intraday - no escape.