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So what's your answer? We want a number.

Could you outline your thinking here? Thanks.

Here's a new puzzle for you optimal sizers. Here's the scenario: There is a 35% chance that you win 20% of your bet ; There is a 25% chance that you lose 15% of your bet ;; There is a 20% chance that you win 12% of your bet ; There is a 15% chance that you lose 6% of...

One final word from me in this thread. I started this thread in a spirit of generosity. Nobody knew what I knew. Nobody knew I knew it. I thought and still think it is a momentous discovery. Apparently few here agree with me. No way of knowing for sure. The OP has received exactly one like...

I gave a gift to ET. The intelligent will know what to do with it. The unintelligent will bitch and whine because I didn't top it with whipped cream and sprinkles. You think I give a rat's ass because some whiney noob troll can't figure out what to do with the formula? Keep dreaming. On ignore.

The lazy shall remain uninformed.

System Achievement Score (SAS) SAS == 4*k*max[ 0, E ]*PF*min[ 1, N/1000 ] , where k is the Kelly fraction aka the solution to the optimal geometric growth equation (see below), E is the expectation (%/100), PF is the profit factor (see below), N is the number of trades in the performance...

"A theory should be made as simple as possible but no simpler." -- Albert Einstein The simplest theory Einstein could find to explain the cosmos was General Relativity, which most scientists would agree is not simple compared to most other scientific theories. Putting simplicity first in...

For purely binary outcomes there is no risk of bankupcy. It is only when multiple-outcome scenarios are "condensed" to the binary case that bankrupcy becomes an issue, because the estimated Kelly fraction is almost always oversized. For multiple-outcome scenarios, you'll get a better Kelly...

The expected value is gain per unit bet. Same for both strats. The Kelly fraction tells how many units to bet. Clearly strategy A is superior.

Expected value: E(A) = 0.6(+1) + 0.4(-1) = 0.2 E(B) = 0.4(+2) + 0.6(-1) = 0.2 Kelly fraction: K(A) = 0.6/|-1| - 0.4/1 = 0.2 K(B) = 0.4/|-1| - 0.6/2 = 0.1 A is clearly superior.

Of course. I get out when my indicator shows that the current trend has disappeared or reversed. Aside from the fact that my indicator doesn't work that way, there's the fact that pullbacks and reversals occur in the same direction: opposite to the current trend. The difference is that one is...

Nowhere did I suggest that anyone should search for absolute certainty. Quite the opposite. No one can trade with hindsight, hence there is no absolute certainty in trading. Forgive me for not belaboring the obvious.

But that's the whole rub, innit? The only way to know for absolute certain whether a move is a pullback or a reversal is with hindsight. In the case of a pullback, if you hesitate to buy because you fear it might be a reversal, you've lost your opportunity to buy the dip. In the case of a...

Are there really 50+ different types of pullbacks or just some neurotic obsessed with minutiae? Seriously, which is more likely? Reminds me of David Aronson and his "6400 different trading rules" which turned out to be four different rules spread over 6400 different parameter sets.

The difference between zero and one trillion is "mere points". Doesn't matter. Even if she called the top within 0.5%, it happens. If someone makes enough predictions, a few are bound to be close. But a few great predictions (or a few great trades) does not a great career make.

Fortunately for indicatorists, that ain't the case. I don't give a crap about pullbacks until they make the trend disappear. Then I'm out and waiting for the next trend, which may be a reversal or a continuation. Doesn't matter. All that matters is trend or no trend. Trade the trend. Which...

OK roadmap isn't the right analogy. But there are explorer maps over territory that hasn't been fully surveyed and recorded. An explorer map has unknown areas, dead ends and yet to be discovered hazards. Not unlike a trading plan that can't possibly predict the future perfectly but is the best...

If your trading plan has a winrate of only 50% then you need a better trading plan. And they do exist.

I love when he consults one of his chartists, especially "the Fibonacci queen". TA can work but not the dreck Cramer dredges up. Except in his well-chosen examples.