A 70k bet that I can't make a 50% gain in 2009

Geez,an important question since I am still struggling with tests I perform to find the best trade management for my system and my market.

When you were setting your system,did you first set the reward/ risk ratio to 2:1 and then find out that your w/l ratio was about 50%,or the opposite? I mean,when someone elaborates a trading system,it has,among other things,to define clearly which trade is a "win trade".
Your definition is that a winning trade is the trade that gets to the 2:1 profit target,right? any other trade that never gets to the target,but returns to the stop iloss is a losing trade,right? I believe that you rarely move your stop.So,the 50% w/l ratio is just a statistical outcome,or it varies depending on the stock you are trading?
 
Quote from AA48:

Geez,an important question since I am still struggling with tests I perform to find the best trade management for my system and my market.

When you were setting your system,did you first set the reward/ risk ratio to 2:1 and then find out that your w/l ratio was about 50%,or the opposite? I mean,when someone elaborates a trading system,it has,among other things,to define clearly which trade is a "win trade".
Your definition is that a winning trade is the trade that gets to the 2:1 profit target,right? any other trade that never gets to the target,but returns to the stop iloss is a losing trade,right? I believe that you rarely move your stop.So,the 50% w/l ratio is just a statistical outcome,or it varies depending on the stock you are trading?
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AA48,
When I first started out trading I would shoot for 3:1. My commissions were $9.95 each way. Like most rookies, I did not really do the math behind trading, I just saw a trade and took it. I was breaking even to making just alittle bit of money, but alot of my trades were working in my favor(moving to my target) only to turn against me. I started messing around with the numbers to see how far I had to let trades go to be profitable on a 40% win avg. As I got better I realized 50% (and alitttle higher) was attainable, so I recalculated my ratio to 2:1 (actually 1.8 to1). It is something you just have to tweak alittle to fit in to your commission plan and one that can keep you profitable at the low range of your avg. If you noticed, I trade better in a moving market compared to a basing market. When the market based from january to march I made money, but not as much as I have made in the past month as the market and stocks have begun to move. Your system has to be able to "trend lower" so to speak...basically work in all market conditions. If I did trade at 40%, I would still be (very slightly) profitable. My trading plan says if I fall below 40%. stop and re-evaluate the market. Maybe it's doing something different then I think or see it doing.
Hope that helps -G
 
Ok. I am in the office and have to run back home to prepare for the open....
Here is RIMM short from yesterday..a pictue perfect short per my pattern setups. I will go into detail about it more later, but I wanted to get the chart posted first.
 

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Geez, nice chart. It shows the high at 13:40, then a lower high, and then the ultimate short entry signal - an even lower high that leaves a red shooting star (or F/U candle as my friend likes to say).

The other short signal you can see is that the series of lower highs keeps bouncing off a stable support level, forming a bear flag.

At this point SPY also left a shooting star and was overbought.

Finally, on most days there's profit-taking that starts around 2:30 p.m.

I call these the "Moon in the Seventh House, Jupiter Aligned With Mars" trades. Basically, you have confluence from all sides and the probability of a successful trade is very high.
 
Tues Watchlist:

LONGS: BIDU CTSH JRCC WFMI SBUX
SHORTS:BIIB GRMN

Gap list not showing too much, may have to wait until past 10:00 to get a good feel fortoday.
 
Quote from geez:

5/12/09:

10:47 1000 FAS BUY 9.80
STOP 9.60
TGT 10.20
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It's interesting as I just took a LONG shot at FAZ. It was showing support around 5.45 (resistance at 906 of sp500 ) so I placed a tighter stop.

10:50 200 FAZ BUY 5.45
STOP 5.38
TGT 5.65
 
Quote from TraderSU:

It's interesting as I just took a LONG shot at FAZ. It was showing support around 5.45 (resistance at 906 of sp500 ) so I placed a tighter stop.

10:50 200 FAZ BUY 5.45
STOP 5.38
TGT 5.65
More...

Just donated some more money to the market (tighter stop and possibly wrong setup). It is going to be good learning on setup criteria for FAS/FAZ.
 
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