ES Daytraders, Whats max heat you will take ?
- Thread starter tradertony76
- Start date
Oh, i do so agree with all of the above. As long as austinp writes it. He is a true professional, rest are like me. Guessing and usually guessing wrong. cheers to the group
Thanks to everyone who took the time to post their ideas to this thread. Looks like I have some reading to do tonight !
Questions:
Can anyone at your firm show you a profitable P/L trading like this?
Have you backtested your method? Do you have a method that can be backtested?
Do you have an idea of what the MAE for your winning trades is? That should dictate your stop.
Have you considered this approach--whne you would normally enter, wait for a 4 tic adverse move, then enter?
Getting whipsawed is usually indicative of either too tight a stop or poor entries.
complete and utter rubbish (but common)
" If you're reward is 4 ticks and your risk is 6 ticks, good luck because you're going to need it. Not saying it's not possible, but the odds are against you. I don't take any trades that don't at least have a 1.5. ( eg, risk 1 point to make 1.5). This only works if you have realistic profit objectives. You can't say your going to risk 1 point to make 20- probably not going to happen. If the reward is not worth the risk,"
the reward and risk (so called) is dependant on the setup, market structure, etc.
it is a TOTAL myth that the only successful way to trade is with a larger "reward" vs. "risk"
it has nothing to do with luck. it has to do with market strucutre, setup structure, etc.
here's a hint. unless you have sufficient "n", you have no way of knowing what your REAL risk is. so called risk/reward ratio is merely how many points you are setting your stop vs. your (first) target. it doesn't let you know what your aggregate risk is (trade after trade) because it doesn't say ANYTHING about positive expectacny, %winning trades, etc. etc.
personally, many of my setups have VERY GOOD positive expectancy, and MANY have a larger STOP distance vs. (first) target. (risk/reward is incorrect terminology, but i digress)
if a setup has (as many do) 80% winning trades with a 12 pt stop and a 8 pt target, that is an EXCELLENT setup. do the math.
your above quoted statement is one of the most common trading myths i CONSTANTLY hear repeated. it is false. it is true for SOME styles of trading (trend trading), but it is ABSURD to extrapolate from ONE style to all styles and believe that successful trades should have a larger target vs. stop.
stops and target should be basedon MARKET structure and SETUP structure.
" If you're reward is 4 ticks and your risk is 6 ticks, good luck because you're going to need it. Not saying it's not possible, but the odds are against you. I don't take any trades that don't at least have a 1.5. ( eg, risk 1 point to make 1.5). This only works if you have realistic profit objectives. You can't say your going to risk 1 point to make 20- probably not going to happen. If the reward is not worth the risk,"
the reward and risk (so called) is dependant on the setup, market structure, etc.
it is a TOTAL myth that the only successful way to trade is with a larger "reward" vs. "risk"
it has nothing to do with luck. it has to do with market strucutre, setup structure, etc.
here's a hint. unless you have sufficient "n", you have no way of knowing what your REAL risk is. so called risk/reward ratio is merely how many points you are setting your stop vs. your (first) target. it doesn't let you know what your aggregate risk is (trade after trade) because it doesn't say ANYTHING about positive expectacny, %winning trades, etc. etc.
personally, many of my setups have VERY GOOD positive expectancy, and MANY have a larger STOP distance vs. (first) target. (risk/reward is incorrect terminology, but i digress)
if a setup has (as many do) 80% winning trades with a 12 pt stop and a 8 pt target, that is an EXCELLENT setup. do the math.
your above quoted statement is one of the most common trading myths i CONSTANTLY hear repeated. it is false. it is true for SOME styles of trading (trend trading), but it is ABSURD to extrapolate from ONE style to all styles and believe that successful trades should have a larger target vs. stop.
stops and target should be basedon MARKET structure and SETUP structure.
The OP indicates the type of trading that his firm is imposing on him is of the scalping nature. It would be foolish for him to use a 4 point stop for only trying to make a point.
How can you say that many traders have setups have 80% winning trades?? If a trader can win 80% of the time then the risk/reward ratio can be lower then if someone only wins 50% of the time. I think many traders have around a 50% win rate, a 80% win rate, IMHO, is very high
Also, i did say that it was possible to have a risk reward ratio around or below 1 and be profitable. I went on the assumption that the OP was closer to the winning percentage of 50% then 80%, so the risk reward ratio should be higher . I guess that is where we differ on the subject of the risk/reward ratio. The higher the win % rate the lower the ratio can be, likewise the lower the win rate the higher the risk reward ratio should be.
Also, I never said anything about having a fixed stop or profit objectives. (eg have an automatic 2 pt stop and 4 pt objective if trading the ES). I also believe that stops and profit objectives should be based on the chart.
Whoa, I am just harmlessly reading this thread and see my name pop up 
I'm all seriousness, I think I am a solid trader but by no means a big hitter. Its true I have had very few down days this year (3, I think totaling ~$500) but I also do not have the bigger up days that often ($2000+). I guess you have to take the good with the bad. For the year though, I am up nicely but I would like to be better and I think, in order to have Lescor type months, I will have to accept the inevitable down days. Hopefully I will learn to deal w/ this when it happens and can come out a better trader for it.
Sorry for interrupting the ES thread, please continue...
I'm all seriousness, I think I am a solid trader but by no means a big hitter. Its true I have had very few down days this year (3, I think totaling ~$500) but I also do not have the bigger up days that often ($2000+). I guess you have to take the good with the bad. For the year though, I am up nicely but I would like to be better and I think, in order to have Lescor type months, I will have to accept the inevitable down days. Hopefully I will learn to deal w/ this when it happens and can come out a better trader for it.
Sorry for interrupting the ES thread, please continue...
Risk is not a big issue with a very high percentage system since you rarely stop out with a loss. Owning that emini system is rare.