Help with Risk Reward

[Tradex]

1. Longer timeframes.

Higher time frames are more profitable ?!?
Who told you that?

2. Scale into winners.

Yes.

3. Set targets.

Yes and no.

If you are trend-following, setting an artificial target will severely limit your profits in the long run.

4. Have reasonable stops. (be willing to lose a bit)

There is no such thing as a "reasonable" stop. Your optimal stop must be dictated by your backtest, period.

 

[Dustin]

Higher time frames are more profitable ?!?
Who told you that?



Yes.



Yes and no.

If you are trend-following, setting an artificial target will severely limit your profits in the long run.



There is no such thing as a "reasonable" stop. Your optimal stop must be dictated by your backtest, period.

1. Big swings are multi-day (ideally 2-4 days). I've had a number of six-figure trades the past year in that timeframe.
3. By setting targets I mean at least having some idea of where to exit a winner so you aren't left holding the bag.
4. As a manual trader, there is nothing for me to backtest. A reasonable stop is a mental spot where the trade looks broken, and you wouldn't re-enter.

 

[Tradex]

1. Big swings are multi-day (ideally 2-4 days). I've had a number of six-figure trades the past year in that timeframe.

Making millions or even billions on a higher time frame still does not prove that it is more profitable in the long run, versus day-trading for instance, on a risk-adjusted basis, all things being equal (same starting capital and same trading system).

3. By setting targets I mean at least having some idea of where to exit a winner so you aren't left holding the bag.

Trading is not about having "some" ideas of where to exit a profitable position, it's about exiting at the OPTIMAL level/price.

4. As a manual trader, there is nothing for me to backtest.

So I assume you are a "discretionary" trader, and since your trading rules are not clearly defined, you will never be able to find the OPTIMAL entry and exit for your particular trading system.

 

[Dustin]

You and I have very different ideas about what it means to trade successfully. You seem to think there are black and white rules, but for me trading is an art form. I'm constantly adjusting to market conditions without set rules, just experience to guide.

Here's today, obviously my methods work.

 

[Tradex]

You and I have very different ideas about what it means to trade successfully

Trading is not about having "ideas" and "opinions", it's all about trading the optimal risk-adjusted system with minimal volatility (drawdown).

In other words, it's all about facts.

Here's today, obviously my methods work.

Even losing systems can work for a while.

Can you show us your last 5 000 trades and the drawdown... ?

 

[SunTrader]

Optimally yes. Realistically no.

 

[Tradex]

Optimally yes. Realistically no.

??

You are Ok, SunTrader...?

 

[Dustin]

Trading is not about having "ideas" and "opinions", it's all about trading the optimal risk-adjusted system with minimal volatility (drawdown).

In other words, it's all about facts.



Even losing systems can work for a while.

Can you show your last 5 000 trades and the drawdown... ?

I haven't had a losing year in 23 years of full time trading. You can have your opinions, I'll keep mine.

 

[Craig66]

LOL, multi-decade successful trader tries to help. Newb idiot tells him he's full of it.
ET in a nutshell.

 

[Tradex]

I haven't had a losing year in 23 years of full time trading.

Good for you, but you would probably have tripled your money had you simply traded the optimal entry/exit parameters for your particular trading system.

Think about it for a second.