ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
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c'mon you know it's not that simple for most people.
Quote from Buy1Sell2:
Just to revisit this point from yesterday- A 3 to 1 win system with the parameters I described is profitable with a 31 % system, a 4 to 1 system is profitable at 25% winners and adding today--a 1 to 1 Reward/Risk needs to have over 62% winners to be profitable. 62%!!!!.
Obviously, if you were to carry this out to 5/1 etc you would see the benefit of finding a system that lets trades ride even though you might get stopped out a lot. Food for thought--comments welcome.
You need to find a way to get it down to that kind of simplicity. Let your profits run larger. Instead of takng a 2 pt profit--hows bout 6. How many times can you get six points given the markets range and volatility. What you will see is a lot of folks making things way too complicated. Would you rather trade at 4 to 1 and only have to be right 25% of the time? Or would rather dash in and get your 1 to 1 and have to be right 62%. Honest question that I would like an answer to if you would.
Quote from Buy1Sell2:
You need to find a way to get it down to that kind of simplicity. Let your profits run larger. Instead of takng a 2 pt profit--hows bout 6. How many times can you get six points given the markets range and volatility. What you will see is a lot of folks making things way too complicated. Would you rather trade at 4 to 1 and only have to be right 25% of the time? Or would rather dash in and get your 1 to 1 and have to be right 62%. Honest question that I would like an answer to if you would.
Great summary. I do not want to assume, as I simply can not remember previous posts, did you use this approach when you were daytrading?
of course it's better to only have to be right 25% of the time. the math is clear, but it's easier said than done. larger reward:risk strategies tend to have lower win percentage, and vice cersa.
i am not advocating 1:1 or daytrading, but the tradeoff between reward:risk and win percentage is there - for most people.
i am not advocating 1:1 or daytrading, but the tradeoff between reward:risk and win percentage is there - for most people.
When daytrading, I was using my trailing stop method and letting the profit run. That was why I could get stopped out numerous time with the initial position and small losses. I then upped the trade and when it came in , it came in big. Later in the journal, I used larger initial positions and longer frame charts to get more accuracy in the signals.
I would recommend finding a way to be more patient and taking less trades. Many traders find it exciting to trade or perhaps fel that they have to be doing something otherwise they are missing out. Just as a baseball hitter needs to be patient and look for the right pitch, so does a successful trader. It may take you quite a while to define when to lay off.
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