If I trade ES and use 1 point stop loss, what are the pros and cons?

[PocketChange]

If you were to simply trade every tick in a trading session either long or short without regard to any type of entry strategy. Taking into account a 1 tick spread between bid and ask,
Statistically you have a:

40% chance to hit a 1 point profit target before a 1 point stop.
60% chance to hit a 1 point profit target before a 2 point stop.
70% chance to hit a 1 point profit target before a 3 point stop.

45% chance to hit a 2 point profit target before a 2 point stop.
30% chance to hit a 2 point profit target before a 1 point stop.

Just keep the odds in your favor.

 

[BPtrader]

Quote from PocketChange:

If you were to simply trade every tick in a trading session either long or short without regard to any type of entry strategy. Taking into account a 1 tick spread between bid and ask,
Statistically you have a:

40% chance to hit a 1 point profit target before a 1 point stop.
60% chance to hit a 1 point profit target before a 2 point stop.
70% chance to hit a 1 point profit target before a 3 point stop.

45% chance to hit a 2 point profit target before a 2 point stop.
30% chance to hit a 2 point profit target before a 1 point stop.

Just keep the odds in your favor.

If your assumption is correct, I will get the following results after 10 trades:

40% chance to hit a 1 point profit target before a 1 point stop=-2
60% chance to hit a 1 point profit target before a 2 point stop=-2
70% chance to hit a 1 point profit target before a 3 point stop=-2

45% chance to hit a 2 point profit target before a 2 point stop=-2
30% chance to hit a 2 point profit target before a 1 point stop=-1

Donald Trump must be operating his casinos with your formula.

 

[puretruth]

Quote from PocketChange:

If you were to simply trade every tick in a trading session either long or short without regard to any type of entry strategy. Taking into account a 1 tick spread between bid and ask,
Statistically you have a:

40% chance to hit a 1 point profit target before a 1 point stop.
60% chance to hit a 1 point profit target before a 2 point stop.
70% chance to hit a 1 point profit target before a 3 point stop.

45% chance to hit a 2 point profit target before a 2 point stop.
30% chance to hit a 2 point profit target before a 1 point stop.

Just keep the odds in your favor.

How do you arrive at those numbers ?

 

[PocketChange]

Not a scientific study or intended to be quoted as fact... Just ran a few days of ES tick data through Excel... about 6,844 Tick changes.

For each Bid Tick: Used an array formula to scan down the table to see if Ask hits + 1 point before - 1 point... repeat for Each Ask Tick and various different scenarios. Summed the results for the stats.

Obviously its a small sample of a few days price action. The point I was really trying to make to the op was sure its possible just keep the odds in your favor.

An interesting observation was that a 5 Tick Profit Target / Stop Loss (1.25 points) hit 60% of the time. What a difference one more tick makes... Brought back memories of an old trader friend who would never trade on the zeros.