There are also traders who add to losing positions either in a pairs trading or P2 type manor. P2 has discussed his ideas here and I've talked to another tradres who does something similar. He only adds intraday, only when his position is going against him, does not carry positions overnight, and is right >85% of the time. Many of the wins are small wins when he hits his profit target. After his second add-on he looks for break-even only trades. About 1-in-7 trades he hits his max stop loss for a position (calculated in advance as function of volatility after his 4th add-on) and it hurts. This position doesn't have a simple risk:reward calculation because of the nature of the add-on, but if you look at each complete trade, the avg. loss is much larger than avg. winner and this guy is mid six figures trader. I personally cannot trade this way, but it works for him.
Any guy making money using risk/reward ratio >1?
- Thread starter hermit_trader
- Start date
Mark 1,
by the results you post of your system it appears that your system works on bar patterns. If I'm right it's because your "Avg Bars Held 1.13 " gives it away.
Either way I'd be interested in hearing more about your system since I have programmed mine in WL and the results share *some* similiarities.
by the results you post of your system it appears that your system works on bar patterns. If I'm right it's because your "Avg Bars Held 1.13 " gives it away.
Either way I'd be interested in hearing more about your system since I have programmed mine in WL and the results share *some* similiarities.
http://hquotes.com/tradehard/simulator.html
80% wins, 1:3 ratio could potentially be profitable.
Not to say that it is any more profitable than other systems in the hands of the right trader.
Personally, my ES system gives me signals that moves in my favor by 1 point or more about 85% of the time. Now, the question is.. do I want to take this 1 point profit? Or do I want to hold it for 2 points? 5 points? Til my system gives me an exit signal ?
It's really up to your own personality as how to trade.
Do you want a small to medium gain 60 to 80% of the time ? Or are you a trend follower going for the big gain that will only happen 10% of the time?
Assuming both methods (taking small profits with high % win; and taking large profits with low % win) have a satisfactory positive expectation, you can trade both methods by utilizing multiple contracts. This is a valid way to smooth out your equity curve. Tweak the # of contracts in favor of your preferred method of trading (e.g. use 3 contracts with short-term scalp and 2 contracts for long-term method; or some other combo).
Tx for the link, Prox!
Very interesting to play with these curves
Very interesting to play with these curves
This thread was one of the reasons I asked about starting a scalping thread - Scalpers Progress.
Of course it can be done. I started my initial system at 1 point stop and .5 target. That was consistently 80% and better.
Last couple weeks (while posting) have been doing 1 to 1 due to the fact that I often left alot on the table. The % has gone down (last week was 65% and the week before was 78%, but both were profitable. There are a number of people like myself that would rather be 80% right, than be 30% right with big winners.
But to say it cannot be done is foolish.
Make 'em pretty, Chris
Of course it can be done. I started my initial system at 1 point stop and .5 target. That was consistently 80% and better.
Last couple weeks (while posting) have been doing 1 to 1 due to the fact that I often left alot on the table. The % has gone down (last week was 65% and the week before was 78%, but both were profitable. There are a number of people like myself that would rather be 80% right, than be 30% right with big winners.
But to say it cannot be done is foolish.
Make 'em pretty, Chris
