Fun with Fibbonacci Revisited

[wally_]

Quote from Breakout:



Actually, that was a typo...I meant traders cut their "profits" to soon.

Well, with that I can also agree, my targets are 9 ES pts or MOC or I exit with a 6 ES pt loss. To get a good profit you also need to leave some room for it to develop. As long as your direction is right a 6 pt stop-loss is not going to hurt most of the time.

 

[Breakout]

Quote from inandlong:

LOL

Just goes to show you, one man's trash is another man's treasure.

Most of your "great new way" posts validate the kind of simplicity I depend on.

Hey inandlong...why does it keep showing "cut their losses to soon" when someone uses my post in their post. I edited it to
"cut their profits to soon" long before Profitseer posted and it still
showed up "cut their losses to soon" in his post?


Anyway, for further reference. I didn't mean "CUT THEIR LOSSES TO SOON"...lol

 

[profitseer]

well. so much for that move, if you want to try it at home, I guess you have to redraw from a high of 913.75, unless anyone has any better ideas.

Breakout, I'm not understanding where you get the 61.8 from low to low on your chart?

 

[Breakout]

Quote from profitseer:

breakout, Here's something I was thinking about for daytraders.
Your first trade is 1:1 and you hit. Now is your second trade 1:1? Or since you are already up 1, does that make it 1:0, and if you hit again, is the third trade (since you are up 2) now 1:-1?

But to answer your question, of how many times that you exited at a small profit could you have re entered same trade at a better price? My guess is about 99% of the time.

And many times I re enter at the same price. I put it on and say, "Wasn't I just long here a few minute ago?"

Right, I like to average. Say for example I have 5 losers.

1. 5 bucks (commission)
2. 30 bucks
3.40 bucks
4. 5 bucks (scratch again)
5. 18 bucks

Average loss $19.60

So if I want to average at least a 3:1 profit/loss ratio I'll
try to make at least $58.80 ($19.60 x 3) on the 6th trade and so forth.

 

[wally_]

Quote from Breakout:


Anyway, for further reference. I didn't mean "CUT THEIR LOSSES TO SOON"...lol

But, I did.

Well anyway, at least I believe that some people really do not concentrate on the right aspect of the problem which is the reward risk ratio. I have it 1.5 and most of my trades are winners. That's enough to make money. Tighter stop-losses may be good for some, but this has to be viewed in the proper context which is the reward-risk ratio and the frequency of winners. Taking these things separately is a basic mathematical error which many here seem to commit despite the fact that this issue has been discussed on this board many times.

That's it... I do not intend to start another thread here...

 

[Breakout]

Quote from profitseer:

well. so much for that move, if you want to try it at home, I guess you have to redraw from a high of 913.75, unless anyone has any better ideas.

Breakout, I'm not understanding where you get the 61.8 from low to low on your chart?

Which one? The first one or second one? It should be right, though. My software draws them automatically.

 

[Breakout]

Quote from wally_:





Well anyway, at least I believe that some people really do not concentrate on the right aspect of the problem which is the reward risk ratio.

Ditto...

 

[profitseer]

Quote from Breakout:




Right, I like to average. Say for example I have 5 losers.

1. 5 bucks (commission)
2. 30 bucks
3.40 bucks
4. 5 bucks (scratch again)
5. 18 bucks

Average loss $19.60

So if I want to average at least a 3:1 profit/loss ratio I'll
try to make at least $58.80 ($19.60 x 3) on the 6th trade and so forth.

breakout my friend, That is exactly the concept of target trading (one of my other brilliant ideas).

I started a thread about it, and traden4alpha supplied the math, and I have been pondering the dead end he called "the death spiral" ever since.

But the concept is, looking at the big picture of your trading, and not limiting it to every single trade. So...if your hit rate is unusually high, you may hang on longer until it comes back down to average, or any one of a number of ways to eventually get to that 3 to 1 target we all know is what a profitable month looks like.

Anyway, it's back there somewhere on this strategy trading forum.

But I personally have given up on the 3 to 1 trade. 1 to 1 fine. 1 to 3 fine. 9 to 1 fine. But that 3 to 1 is not out there where I am looking anymore.

 

[profitseer]

Quote from Breakout:

Damn!...two more 61.8's and a scratch .50. That's it, I'm going
Fibb. He's the man!

jp4, you have a low of 904 and then a subsequent low of 906.75, than a line connecting them labeled 61.8.

That is what I'm not getting.

 

[Breakout]

Quote from profitseer:

jp4, you have a low of 904 and then a subsequent low of 906.75, than a line connecting them labeled 61.8.

That is what I'm not getting.

Here's the first one....