Quote from Algo_Design_Kid:
You are clueless sometimes ABC.
We already explained what you are incorrectly assuming when you say you are making 400-500/day with $50,000 starting capital. You are not incorporating risk of ruin in your models.
Well, if fibs are as magical as everyone thinks they are, then there is no risk of ruin
Please read a book or take someone's advice, one day you will look back at this thread and realize how foolish you really were. I can promise you that.
I used to have an entire bookcase full of trading books from when I was learning, but I've sold most of them because they were worthless. A few of them had some advice that gets quoted all over every trading forum, like "don't let a winner turn into a loser" and "learn to control your emotions," but none of that is really helpful if you think about it.
The rest were full of like Dr. Elder saying "look here's my Force Index indicator I created, and look how well it works on these cherry picked charts!!!!!"
Or a bunch of after the fact the fact trendlines. Hey, what about all those
other trendlines you
could have drawn that
wouldn't have worked?
Your short-term assumptions will turn out to be incorrect given a long enough period of time. You just don't get it, then you call other people out that are obviously much smarter than you?
Who is "obviously much smarter than" me? The people that write the shitty books? Or the people that flame me because I make more money than they do with a smaller account size?
How many consecutive losses in a row do you think it will take risking what you are trade after trade before you lose everything? Do you know how to calculate that?
Sure. But let's not forget how often losses actually happen.
Last week, in 17 trades I had two losses. Average win size $450, average loss size -$679.
If someone had a 99% win rate where their winners were +1 but their losers were -20, and an account size of 100, would you tell them not to trade because 5 losses would wipe them out?
Now I understand that people who martingale make the similar arguments... "omg I have 99% win rate!!!" but they also usually have no stop loss and it takes one loss to blow them out. I have a hard stop defined for every trade before I even enter.
At my current size, it will take approximiately 73 consecutive losses to blow my account. Of course, before then I would no longer have enough margin to go 9 contracts deep, so let's say I'll quit if my account size falls to $20k. In that case, I can still survive 44 consecutive losing trades.
Now I'm not trying to get cocky. I do occasionally have losers that are big, but also sometimes they are smaller, depending on the range I establish before I enter the trade.
And as I mentioned in the other thread, for any given trade, the max winner is larger than the max loser.
Don't think it will happen? Laughable.. it can and will happen, you just haven't hit that nth deviation yet - After you lose it all and you can feel it in the bottom of your stomach you may make a new thread asking for statistical advice on risk management. In fact I can promise you down the line with an almost 100% certainty that will happen.
Well dude, if that happens, I will send you a PM and tell you you were right. How about that
