I trade one or two signals in a day. For trend traders 2 trades per day may be too much. For scalpers 2 may be too less.
70% success rate Index Options strategy
- Thread starter rajesheck
- Start date
I trade one or two signals in a day. For trend traders 2 trades per day may be too much. For scalpers 2 may be too less.
True success rate is the one which considers both the hit rate of target and the hit rate of stop loss.
I believe successful trading means "Protect your capital first... profits are results of responsible trading."
You're completely missing the point (as ever), Rajesh.
The rate of hitting the SL can be deduced from the win-rate. This adds nothing.
If you were ever to read a beginners' trading book (such as Van K Tharp's Trade Your Way to Financial Freedom, or Tushar S Chande's Beyond Technical Analysis, or Michael Harris's Profitability and Systematic Trading) you'd see plenty of explanations, with examples, of why it's easier, more productive and better, for most aspiring traders most of the time, to make money from methods with win-rates nearer 35% than 70%.
Win-rate in itself is only one part of the story.
What matters is expectancy.
Statistically speaking win rate is calculated after deducting the hit rate of stop loss.
I am talking from the trader's attitude point of view. An attitude of protective trading is needed in this unpredictable market. Such an attitude will help traders to focus on hit rate of stop loss which is necessary for successful trading.
Moreover trading is an art. Though numbers play crucial role here, attitude is more important than numbers.
In any Art, there is nothing right or wrong. Art is all about creativity and not about winning arguments. I am expressing my view points here, not arguing with anyone.
There are many unique and creative ways to trade. Momentum trading a simple technique, yet there is a lot more in it to learn from both technical and attitude perspectives.
It is very easy and quick to learn from simple things than complex ones.
This article explains how the attitude or mindset of an investor need to be:
http://www.investopedia.com/financial-edge/0210/rules-that-warren-buffett-lives-by.aspx
Remember, a trader is basically an investor who invests money in trading. Investing in trading strategies to say precisely. And the strategies reflect the trader's attitude or mindset.
An attitude of creativity is the seed of Art. Any artist protects his self expression first. A professional trader protects his money first. The creativity oozes from such a protective attitude.
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In my experience, "partial target" is the major challenge in low success rate strategies.
Let us see an example of 30% win rate strategy:
Out of 10 trades, 3 times price hits target, and 7 times hits stop loss.
To make minimal profit in such a strategy the target has to be at least 4 times the stop loss.
Now the challenges are...
1. With a multi fold target, it is likely that target may partially be attained.
2. If the first 5 to 7 trades hits stop loss then the following profit bookings may not be sufficient even to cover losses assuming that the targets are partially achieved.
3. If we have trailing stop loss, it reduces the chances of hitting the target.
4. If we don't have trailing stop loss, then it will eat even the partial profit.
Yet if the trader knows how to reduce the hit rate of stop loss AND trailing stop loss he can makes profits either it is 30% or 70% win rate strategy.
Yes, reducing the hit rate of stop loss refers to both the basic stop loss and the trailing stop loss.
Let us see an example of 30% win rate strategy:
Out of 10 trades, 3 times price hits target, and 7 times hits stop loss.
To make minimal profit in such a strategy the target has to be at least 4 times the stop loss.
Now the challenges are...
1. With a multi fold target, it is likely that target may partially be attained.
2. If the first 5 to 7 trades hits stop loss then the following profit bookings may not be sufficient even to cover losses assuming that the targets are partially achieved.
3. If we have trailing stop loss, it reduces the chances of hitting the target.
4. If we don't have trailing stop loss, then it will eat even the partial profit.
Yet if the trader knows how to reduce the hit rate of stop loss AND trailing stop loss he can makes profits either it is 30% or 70% win rate strategy.
Yes, reducing the hit rate of stop loss refers to both the basic stop loss and the trailing stop loss.
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The fundamental difference is...low win rate strategy works better if factors like EOD chart analysis, fundamental analysis, news and events, etc, are taken into consideration. On the other hand high win rate strategies works well by purely working on intraday chart analysis.
This differentiates them as two unique trading business. Both needs two distinct skillsets. Both of them may compliment each other. But the low and high win rate strategies are totally different approaches.
It is not important to analyse which approach is better. What is important is which one suits a trader. Because every trader is unique and his trading skills and preferences are also unique.
This differentiates them as two unique trading business. Both needs two distinct skillsets. Both of them may compliment each other. But the low and high win rate strategies are totally different approaches.
It is not important to analyse which approach is better. What is important is which one suits a trader. Because every trader is unique and his trading skills and preferences are also unique.
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Where on Earth do you get this entirely fictional, missing-the-point nonsense, from?! (Certainly not any of the standard beginners' trading textbooks I suggested above, or anything similar, which you've clearly never seen at all, because they all show it up for what it is.) Oh well ...
Another completely silly thread for me to unsubscribe from, anyway.
It makes whole difference if we see
1. Ourselves as unique individuals.
2. Our skills and styles are unique.
3. Our goals are unique.
4. Trading as an art than science.
5. Trading is a business, not a job.
6. Any business, including trading, is both a profession and an art.
7. Our level of success in any profession is directly proportionate to our level of interest in that profession.
8. Interest in the sense of passion in pursuing the profession.
9. Passion for learning not craving for earning.
10. Respect for money.
Please see this video of interview with Mark Douglas, a pioneer in trading coaching.
1. Ourselves as unique individuals.
2. Our skills and styles are unique.
3. Our goals are unique.
4. Trading as an art than science.
5. Trading is a business, not a job.
6. Any business, including trading, is both a profession and an art.
7. Our level of success in any profession is directly proportionate to our level of interest in that profession.
8. Interest in the sense of passion in pursuing the profession.
9. Passion for learning not craving for earning.
10. Respect for money.
Please see this video of interview with Mark Douglas, a pioneer in trading coaching.
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ok
About time you stopped preaching like a brahmin , what is your actual real profitability?
Are you suffereing from Dunning Kruger effect?