i believe you
Can Anyone Be Successful In Trading.... With Only About 50% Win-Loss Rate?
- Thread starter nakachalet
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i believe you
Here is an opposite view than that of Harris. What do you think?
http://www.learntotradethemarket.co...winning-percentages-are-irrelevant-in-trading
http://www.learntotradethemarket.co...winning-percentages-are-irrelevant-in-trading
This is where it gets dangerous. Unless a person can systematically figure out what about a particular trade made it fail vs. win, its all just guessing. Its like you're trying to say that you need to predict the outcome of a trade before it happens. I'm sure you're not meaning to say this, but a new trader might assume they need to figure out why a trade failed, so they don't do it again, and so they forever increase their win rate. Now their head is spinning, and they are going down the wrong path.
This makes sense. But its of course all a matter of putting numbers to this. Assume you're hoping for 1 ES point, and you're willing to hold with a 3 point stop. You would need a really high win rate in order for this to be profitable. (not sure about the math, but perhaps its north of 80% win rate necessary). Even then, the losses would happen frequently enough and in many cases, I'm sure this would affect the ability of the trader to put on the next trade. Once you're scared to put on the next trade, you're fucked.
Based on thousands of trades I conclude that my system does not follow this logic. So therefore I do not pay any attention to MC.
I don’t agree. I daytrade and a high win rate in all market conditions is possible. This is my conclusion based on thousands of real trades in all kind of market conditions. The only difference is the average profit per win can vary very strongly. All depends on how your system is build. You can only win what the market offers you. In low volatility it will be a small profit, in high volatility it can be a bigger profit. But as long as I sit in the right direction I almost always manage to get out without a loss if the market does no really move in favor of my position.
Any win rate can work fine, it all depends of the average wins and losses. Even a 99% losing rate can mathematically end in a profitable system.
MTrader: You can only win what the market offers you. In low volatility it will be a small profit, in high volatility it can be a bigger profit. But as long as I sit in the right direction I almost always manage to get out without a loss if the market does no really move in favor of my position.
YOU ALL have earned my highest respect and admiration.
Listen up all ye who are heading up that direction
toward becoming consistently profitable traders....!
For me it is all a probability game. Yes, i try to anticipate the probability of the market moving in X direction X amount of points before it would move in the opposite direction X amount of points. Certain patterns and certain candlesticks or combination of candlesticks within certain context increase the odds of that happening. However, nothing is certain. But usually if i place a trade in what I deem a high probability situation and the market moves immediatley in my favor without any, or little adversity, (by adversity i mean it doesn't go far, if any, towards my stop loss), then i get put quickly with any profit it gives when price movement goes dull. I distinguish between my initial stop loss and my actual stop loss. My actual SL is what the market went against me before going in my favor. When the actual SL is small then that is a high probability trade so I know not to follow it too far as the reward will "most likely" be small so I take what the market gives me and i do so quickly. This is counter intuitive. You would think if you get little adversity then let it run. But we have to remember there is always a trade off. Small "actual" risks means high probabilty and usually high probability is going to be mean smaller reward. Generally, you cannot have low risk, high reward, high probabilty. There are always trade offs.
Smaller reward..higher probability trades..higher initial risk...trades usually have higher win rates. It is inherent. But you need the "initial" bigger stoploss (i.e. High risk) for the times those blasted algos and HTF's try to do their BS on you. Higher probability trades require a bigger stoploss initially to maintain a high win rate or you will get stopped out of a perfectly good trade that you got the direction correct but your SL was too small and after taking you out the markets goes immediately in your original direction. In other words, occasionally, some high probability trades have deep pullbacks before they actually move in your direction so you don't want to not get stopped out before the move starts. That is why you have a bigger stoploss. The other option is run a tighter stoploss take the loss and enter again when it begins the move in your direction. But then you are paying double commission. The third option is to scale in with more contracts as price moves towards your SL (again counter-intuitive), but the advantage is your are in effect loading up for the move and lower your entry price while enhancing your profit when the move begins.
Anytime i take a high probability trade with a high risk ( big initial SL) i look to exit quickly EXCEPT in certain market conditions. There are always exceptions! It is quite easy to tell if you have in fact "read" the market correctly. If you enter and it moves quickly in your direction with little adversity or no adversity then you are most likely in an ongoing high probability trade and you need to not be too greedy or profits will melt away very fast.
Of course, all the above is contingent on having decent price reading skills.
PS. Not for noobs. You will misunderstand and apply it wrong. First learn to read PA.
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If ones initial stoploss is getting hit too frequently in what they think should be high probability trades then they are not actually trading high probability trades or they are not using the correct SL. They need to go back and examine their strategy and tactics and refine them or ditch them. They may need to change their SL.
As far as being scared..well that is why i say, and continue to say, the psychological aspect is way more important than the methodolgy for trading. Most new traders focus on system development or adding indicators here and there trying to take away the uncertainty (uncertainty is inherent in trading). Trying to look for more confirmation before pulling the trigger. They get so much on their trading screen they freeze and cannot pull the trigger. Psychological skill development is far more important than ones strategy, especially in the case of discretionary traders. Execution in entries..exits..SL is far more important in terms of profitability than understanding the markets and having a viable system. There are many traders that have a good enough system but they simply cannot execute when they need to. This is a mental and emotional problem..i.e. primarily psychological..and believe me we have all faced it at one time or another, and most likely still do. But those who have learned to transcend these issues can actually be successful with an average to good system. Those who have not, will be unsuccessful even with a 5 star system. IMO.
In part the answer isn't necessarily in obtaining a better system but the answer is within oneself. Developing the psychological skills to execute correctly whatever system a trader has obtained, or developed, then measuring it's performance and fine tuning and adapting it.
Success in the market is absolutely tied DIRECTLY to performance. It is one of the highest performance activities one will ever undertake in their life. That fact, in itself, requires good skills in trading psychology to be developed and not just read about. Most traders read a little here in there but never learn to develop and implement good trading psychology.
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Some traders have given up on discretionary execution and gone to automation. That is ok and is a form of detaching themselves from their trades. The weakness is computers are not, and will not be, any time soon, be as powerful as that organic tissue between your ears. A very good discretionary trader (good system and good psychological skills developed) will, over the long run, outperform any automation via computer. That is why so many HTF's do not make it or make it for awhile and then go belly up. Those HTF's that are keen on adapting last longer. Algos work then stop working. Besides, remember it is that tissue between the ears that is inventing the algos and HFT. This is my opinion. I could be wrong. I have been wrong many times. I will continue to be wrong...but as long as i am right enough to well ..make some money and have a little enjoyment doing it ...well that is ok by me.
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