David Hawkins

Started trading options June 22 2020 🤦 Switched to CFDs in 2021. No DMs I'm afraid. Tweets != financial advice

[David Hawkins @StockCuppa]

It's just a meme that conveys a sentiment. Don't take it literally.

Not all woman are "Karens," but when a woman is called one (non-literally), internet culture generally knows what's meant by that.

It's not meant to be used matter-of-factly. It's not funny at that point, and so serves no purpose as a meme.

A 15 yo could be called a boomer and people might laugh, because it's conveying a sentiment, right? It's not literal.

[David Hawkins @StockCuppa]

@BasilTheGreat Imagine if they couldn't afford representation...

[David Hawkins @StockCuppa]

@kieran__duff I could never make partials work. Always felt like my winners were half-size while my losers were full-size.

Not saying it can't be done. Just that it felt like I was punching myself in the gut 😅

[David Hawkins @StockCuppa]

Well, it depends on the conditions. Some years a good system with breakeven many months, other years that same system can do 8% in 2 weeks on very low risk.

The point is, if you want traders to risk low and also trade the challenge and funded exactly the same, then communicate that. Limit the trade size an account can trade so large orders are simply rejected at the time.

Why create the conditions for any of these arguments to happen in the first place? Don't show people the stars and give them the moon.

I'd argue it's because most people buy challenges because they have an inflated assumption of large returns that result from gambling.

If props communicated rules more clearly, then not as many people would buy challenges. Props need gamblers to pay the profitable traders.

Max 1% per trade on challenge, like funded? Okay, I don't have a problem with that. Just state it clearly. But they won't do that.

[David Hawkins @StockCuppa]

@Benleo The UK needs its own Reckless Ben

[David Hawkins @StockCuppa]

@PolitlcsUK Keir Starmer says the government will give the peasants an extra spoon of gruel for the World Cup.

[David Hawkins @StockCuppa]

How about just clearer rules?

The truth is, if you had to make 8% on funded accounts before payout, trading properly without gambling would mean very few payouts. People would be taking 6-12 months+ to make that.

Okay, so if that's the offer, start communicating it!

Don't beat about the bush with arguments that are open-to-interpretation. That's not a system, that's not a well-planned and well-run business. That's begging for disagreement and it wreaks of a half-baked program.

Challenges as they have been designed are a game, and 99% of traders now realise they don't trade the challenge the same as the funded.

If prop firms really wanted to measure trading ability, the priority would be in emphasizing the importance of trading the challenge *THE SAME* as the funded account.

But we all know that's not the business model.

I won't go on because no one will read it. Basically, I just think challenge rules should be made crystal-clear, and ideally with an explicit acknowledgment by props that challenges and fundeds should be traded differently, and that's normal. Or, if they should be traded the same, very clearly say that by introducing binary, black-and-white rules.

Don't say, "your position sizes are too large," just program the account so you can't take trades over a pre-defined size. Simple, and no drama, right? That would be the honest thing to do. Not to create cracks for traders to fall through, and then waft airy opinions on Twitter afterwards.

Right now, all these open-ended opinions coming out from accounts like yours are just making the industry look silly and unsophisticated.

If props don't draw the lines, regulators will.

[David Hawkins @StockCuppa]

The challenge phase is inherently gamified given the excessive target relative to typical funded withdrawals, especially through the lens of the original 30 day limit these challenge phases used to have.

We no longer have that limit, true, but I think it still guides expectations that people don't want to be running challenges for too long, and so increase risk accordingly.

I don't have a dog in this fight but you guys need to start being crystal-clear on challenge limits before regulations come and bite us all in the ass.

Ambiguity doesn't help traders. Yes, we all know that fundeds are traded differently from challenges; this isn't 2022/2023. We had to quickly start reading between the lines on fundeds, and then the 1% rule was introduced among most props, it seems.

Classic 2-phase challenges are still very flexible, which is great for the trader. But lack of clarity upfront just leads to time being wasted.

Telling people they're gambling on the challenge phase when you know they don't trade the same way on fundeds is just patronising and disingenuous.

Please, establish clearer guidelines as far as the challenge goes and you'll avoid needless drama like this 🙏

[David Hawkins @StockCuppa]

@RaAnkush @fundingpips @Khldfx @ronna256 @avikkfp Nice one Rakesh 💪

[David Hawkins @StockCuppa]

They didn't tell me all my time in algo trading would be spent fixing bugs 😭

Ngl, problem-solving outside the markets is actually hella fun compared to live trading. At least it is on demo 🤣

[David Hawkins @StockCuppa]

@ZenomTrader Nice find. I like the idea that simple models will be more resilient against edge decay. Must admit that it's something I think about a lot, especially with AI.

My model logic is simple so here's hoping the goal post won't keep moving 🤣

[Goshawk Trades @GoshawkTrades]

ex-jane street trader on where small traders can still find edge:

"are there going to be inefficiencies in the market, pockets in the pink sheets or something, where it's just not worth a large successful company's trader time to look? yes. those will always exist. and they'll get slowly competed away by mom-and-pop trading operations, or former jane street traders at home doing it for fun."

if you are looking for pure inefficiencies you have to go where there is less competition.

[David Hawkins @StockCuppa]

"AI is amazing at adding complexity. Your job is to resist it." 💯 https://t.co/wwaqOJMbhn @GoshawkTrades

[David Hawkins @StockCuppa]

Future of the prop space, some ideas:

- 1-phasers will increasingly subsidise payouts to the 2-phasers (if 2-phase sticks around). Owning to increased popularity/marketing of 1-phase. Assumes market continues to grow with new traders starting with 1-phase, never-before hearing about 2-phase.
- 2-phase (if not removed) will increasingly be disparaged by firms, or used as punch bags in 1-phase marketing fodder.
- New 1-phase program designs will create increasingly favourable conditions during the challenge (easier pass), but unfavourable conditions during the funded stage. This will create motivation for traders who are able to pass (as well as commitment to purchase more challenges vs traders who never pass). Increased house edge will become better hidden through this increasing disconnect between challenge and funded.

The single-most important variable will be available drawdown during challenge vs available drawdown during funded. The bigger the disconnect, the bigger the house edge.

[David Hawkins @StockCuppa]

It's quiet at the true top.

It's easy to over-estimate the competition in an industry like trading, especially the retail sector.

If I divided traders into 4 categories, how do you think it would divide?

1. The newbies (<2 years)
2. The fakers (1+ years, signals/course-sellers)
3. The complacent (5+ years with flattened growth. "Mature" traders and course sellers stuck with sunk-cost fallacy or imagined commitment to their followers.)
4. The pragmatists (5+ years, still learning, still humble, concerned with truth over effort)

I'm going to bet that we don't get 4 equal slices 😝

I'm nowhere near the true top, clearly. But I do know that every time I reach what I think is the top, I look up and there's another peak.

And my response to that isn't "I'm entitled to rest." It's "stay ready, then I ain't gotta ready. Life is movement. Let's move."

At every peak, we lose another cohort of traders when they see there's another level. When there's a new, buzzy pattern/indicator, when their edge decays, when a new regime becomes too volatile.

When the dissonance between what they thought was elite and what is, is so unbalanced that they have to quit or dig in their heels.

Laziness, entitlement and inflated expectations are what keeps it quiet at the top.

[David Hawkins @StockCuppa]

Trading with an EA adds at least one new responsibility discretionary traders don't have: checking everything worked as expected every day.

But that's just one thing.

Trading discretionary-style adds sooooo many new responsibilities that EA-traders don't need to spare a thought about. I keep realising there are more and more.

Take the broad topic of "trading psychology" (popular course-seller bloat): practically eliminated. And that's remarkable considering the book Trading in the Zone is practically a bible in our space.

Rule-following: practically eliminated.

Time-sensitive focus: practically eliminated.

The list goes on.

It feels like every day I'm realising the are more and more trading "skills" I've worked on over the last 6 years which were really just blowing smoke up my arse and moving books of shelves.

Every new thing I don't need now as an EA-trader is moving from the signal bin to the noise bin.

One of the biggest challenges most of us go through at some point is over-trading, right? I know I struggled with that. Practically eliminated.

Noisy backtest data? Practically eliminated (providing you avoid over-optimising and follow best practices for automated trading).

The issue I struggled with well after over-trading was an issue? Executing when 80% of my plan set up, but the market wasn't expected to move, or simply wasn't moving. Practically eliminated.

Rather than getting twitchy fingers, I can just screen for momentum and time so only the best trades are taken; far easier said than done when you've been staring at charts for 4 hours without taking a trade.

It's easy to not take a trade that looks nothing like your plan. But when it's 80% good, that FOMO creeps in. "It's good enough."

The EA never says, "it's good enough". And when you're not there to overrule it, it feels no regret about passing.