3 to 1 win/loss ? Don't think so.

Quote from slapshot:

Personally, I shoot for 2 to 1 (intraday) with a 75% win rate - not quite there yet but I know it is possible.
More...
Good luck in that, man. The best winning streak I ever had saw about 7 out of 10 trades.
 
Quote from slapshot:



Personally, I shoot for 2 to 1 (intraday) with a 75% win rate - not quite there yet but I know it is possible.
More...

Aspiration and feasibility are often incompatible objectives... the union of aspiration and feasibility is often transient, particularly within the sphere of trading, where so much of the motivation for this game (at least for the newly initiated) is based on (unrealisable) aspiration or based on a 'hoped for' continuation of nothing more than a fortunate coincidence of aspiration and realized results ...
 
"A good technician gets it right maybe 60% of the time. And a great technician, maybe 61% of the time."

excellent quote, which is why I like the 3:1 ratio. If I am right 50% of the time and I have a

1:1 I lose money due to commissions,
at 2:1 I am working for peanuts,
at 3:1 I am getting ahead.

But to each his own.
 
Thanks for the posts so far. By the way, yes I meant risk to reward ratio.

TECH ANALYSIS: With your ES trading and that type of risk/reward and winning percentage (was it 42% ?) are you doing this with standard patterns or some type of system ?
 
Quote from tradersaavy:

I've been daytrading futures now for about 3 months and there seems to be one major problem. I can recognize patterns, but there does not seem to exist often enough, a pattern with a 3 to 1 win/loss. The stops seem to be too wide and they seldom move 3 times these wide stops. So, I've been going to a 1m time frame to find tighter stops and, of course now I'm stopped out all of the time because the stop is toooooo tight and then the pattern takes off back into a favorable direction. I'll post some charts in a short while, I just wanted to see if anyone was interested in this thought or had some charts to post to show me the light.
More...
tradersaavy:

Yes, that’s been my general observation as well. I don’t know what sort of patterns you follow or how you place your stops, so it’s difficult. When you say that you go to a 1-minute time frame to find a tighter stop, are you suggesting that you have spotted a tradable pattern on a larger scale (let’s say 10-minute frame) and then dropping down to a 1-minute chart to find a stop to reduce your risk? Or are you saying that you are simply going to a 1-minute chart to find your pattern AND your stop in that SAME time frame? Can you elaborate further?

Kermit
 
Kermit,

I trade very common patterns. 3 main ones that I am trying to perfect (as good as one can perfect a market). Horzontal breakouts, 1st or 2nd pullbacks after a reversal/breakout and reversals like doubletop/bottom or HeadandShoulder top/bottom. I trade from setups on 5m charts primarily, of course looking at Daily, 60m, 30m, 15m as well for support/resistance. When I mentioned that I go to a small time frame it is usually when I see a set up on the 5m. I then go underneath to see if there is a 1m setting up too. Then play the 1m set up with the 5m behind my back.

I should add that I do see a lot of, let's call it a 5 tick risk to 5 - 9 tick reward, types of follow through with these patterns. This has been observed by simply manually going back through 5m charts over a several month timeframe and counting. No back test software.
 
Mondo,

A 3:1 R/R and being right 50% of the time will make you some serious money. Though difficult, that's well within the realm of plausibility, and if you can pull off that combination with consistency you're doing just fine. However, that's a whole 'nother ballpark than the earlier suggestion by slapshot of a 2:1 R/R with a 75% W/L ratio. Yours will yield 3X the winning pts (shares) vs the losing pts (shares). That's quite a bit different, and much more realistic, than the 6X result of his combination.
 
Quote from tradersaavy:

I trade very common patterns. 3 main ones that I am trying to perfect (as good as one can perfect a market). Horzontal breakouts, 1st or 2nd pullbacks after a reversal/breakout and reversals like doubletop/bottom or HeadandShoulder top/bottom. I trade from setups on 5m charts primarily, of course looking at Daily, 60m, 30m, 15m as well for support/resistance. When I mentioned that I go to a small time frame it is usually when I see a set up on the 5m. I then go underneath to see if there is a 1m setting up too. Then play the 1m set up with the 5m behind my back.

I should add that I do see a lot of, let's call it a 5 tick risk to 5 - 9 tick reward, types of follow through with these patterns. This has been observed by simply manually going back through 5m charts over a several month timeframe and counting. No back test software. [/B]
More...

Hmmmm. My experience has been that if you spot a price pattern on a particular time frame to trade (in your case a 5-minute chart), it is also best to structure your stop in that same time frame. If you drop down to the 1-minute to find your stop, chances are good that you will be knocked around by “noise” at that lower level; which appears to be what is happening in your scenario. If you are able to find a valid pattern/setup on the 1-minute, which happens to be nestled within an overall larger visible pattern on the 5-minute, then place your stop relative to that 1-minute chart pattern while keeping an eye on the 5-minute. Otherwise, if the 5-minute chart pattern proves to be outside your risk/reward parameters, I would either pass up on it or take a reduced position instead.

Kermit
 
true magna I have never had a 75% win ratio, unless you are talking about 3 winners out of 4 trades. I consider that a hot streak and not to be counted on but just enjoyed while it lasts.
 
You must log in or register to reply here.
Back
Top