AHG - Profitable Strategy for Struggling Traders

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Kid,

Couldn't agree more. A couple weeks ago i had a stretch of 12 out of 13 winning days. During that period my winning percentage was around 38%, but my avg. win/loss was about 2.7. I made on avg. about 11 points a day, a very respectable amount in my opinion. So, a lower winning percentage is good as long as you capitalize when you are right.





If you can accept a low win ratio, the next step is to let your winners run. My win ratio for the last two weeks is <40 %. I routinely get 3-4 losing trades in a row. And that doesn't phase me. I think I am the most consistently wrong trader in the room, but I have been doing just fine.
 
Quote from cirekindob:

Kid,

Couldn't agree more. A couple weeks ago i had a stretch of 12 out of 13 winning days. During that period my winning percentage was around 38%, but my avg. win/loss was about 2.7. I made on avg. about 11 points a day, a very respectable amount in my opinion. So, a lower winning percentage is good as long as you capitalize when you are right.





If you can accept a low win ratio, the next step is to let your winners run. My win ratio for the last two weeks is <40 %. I routinely get 3-4 losing trades in a row. And that doesn't phase me. I think I am the most consistently wrong trader in the room, but I have been doing just fine.
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Cire,

3:1 is my minimum r/w ratio I use on the anchor chart. My actually average winner/loser is just over 2.

Definitely not perfect, but just shows you how simple it can be.
 
cire, i respectfully have to argue that when you have a low win/loss ratio you have to deal with what you have more, meaning losses. Find a way to cut losses even shorter by scaling out for example, and don't mess with winners.

once you try to let winners run past a certain high probability point, your winner probability decreases too, so in fact you'll end up with an even crappier win/loss ratio.
 
Quote from alex.samant:

cire, i respectfully have to argue that when you have a low win/loss ratio you have to deal with what you have more, meaning losses. Find a way to cut losses even shorter by scaling out for example, and don't mess with winners.

once you try to let winners run past a certain high probability point, your winner probability decreases too, so in fact you'll end up with an even crappier win/loss ratio.
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The second part of my post should have quotes around it, as that was from Kid's post.

I have started realizing, there is a point in a trade where it can get to a point of diminishing returns. As you say, past a certain high probablility point. Do I want to risk the 10 points I am in the money, for another 2 points, when momentum looks like it's turning? Not really.

I'd like you to expand on the low win/loss ratio. I thought that a win/loss ratio of 2.7 was fairly high. Yes the winning percentage could be higher, but if you start trying to have more winners, you sacrfice bigger winners therefore lowering your win/loss ratio. There is an optimal point of winning percentage vs. win/loss ratio, but this will vary depending on trading style. I think every trader should strive for this optimal level for their individual trading style. I'm happy with my win/loss ratio, but I would like to increase my accuracy slightly.

Alex, please provide more insight if you can. Thanks.
 
Alex - I have one setup which is countertrend which has a 80-90% win ratio for a 1:1 target, sometimes more.

It happens 2-3 times a week at most at the time frame i look at.

I trade the NQ all in all out as I am currently simming and plan on going live with one contract.

My equities trading has a much higher win ratio because i scale out.

I believe both methods are valid, but depend on your psychology and your ability to tolerate losses. Like cire stated, at some point giving up 10 pts to hit an additional profit target of 2 pts isn't a good idea.

I do believe though that the market will forgive you for that type of occasional mistake.

Just some thoughts... I also would like to hear more from you.

I know anek's win ratio has been < 50% recently but his targets are 5 times his risk.
 
Quote from kidPWRtrader:

Alex - I have one setup which is countertrend which has a 80-90% win ratio for a 1:1 target, sometimes more.

It happens 2-3 times a week at most at the time frame i look at.

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what is it?

thanks
 
Quote from kidPWRtrader:

I would just like to take a moment to reflect on win ratio.
Don't be afraid to get stopped out. Every stop brings you one step closer to a home run trade.
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After reading so much crap lately in the forums it's truly a breath of fresh air to read intelligent comments, especially in my journal.

Anek
 
Quote from armoured saint:

what is it?

thanks
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Armoured saint,

I probably should not have mentioned the setup as it doesn't relate to this journal.

Here are the basics... I identify a big support/resistance area on the anchor chart with fib confluence. Once I identify this, I look for wedging action around these areas on a smaller time frame and I buy/sell the wedge pattern after it breaks up/down. It's completely countertrend, though. Think of it as Anek has described as going long/short at an obvious pivot on your anchor and expecting a reaction, but not necessarily a trend change.

You can PM me for more info as my main point wasn't regarding this setup.

Anek: Thank you... just taking bits and pieces from what you've taught and fitting it into other things I've learned myself. The credit is all yours...
 
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