if one can predict market daily movement 55% correctly, how to profit from it ?

[MKTrader]

Not enough information.

What is "daily movement"? Breaking the prior day's high or low? Reaching a specific level? Closing higher or lower?

For any of these situations, how much counter movement (i.e., stop loss) must you allow to achieve this 55% win rate? And how much of a profit are you trying to achieve?

 

[Corelio]

Quote from intradaybill:

Percentage win rate is not enough to make money. You must also have a sufficient avg win to avg loss ratio. The break even is shown in this paper to be equal to:

w = 1/(1 + R), where w is the win rate and R the ratio. Solve for R and you get

R = (1-w)/w

if w = .55 then your R must be at least 0.81. If you factor in commissions, slippage and other unfortunate situations, to break even you will need an R of about 1.3. That is only to break even. If you want to make 1.5 times what you lose in total, a profit factor of 1.5 that is, your R should be equal to 1.3 x 1.5 = 1.95. This means that you should make on average $2 for every $1 you lose. This is becoming hard now. Profit factor 1.5 is minimum. If you raise that to a more reasonable 2.0, R becomes 2.6. This is becoming very difficult now. Your only way out is increasing w. The vicious circle is just beginning.

This is the only post that the OP needs to read. The rest is complete garbage.

Seriously, complete garbage.

 

[bugscoe]

Base hits.

 

[tradingjournals]

Quote from Corelio:

This is the only post that the OP needs to read. The rest is complete garbage.

Seriously, complete garbage.

Where is the analysis of impact of drawdowns, variance reduction (central limit theorem), and probability of ruin? Analysis of average , and variables in it, is not enough and is actually a relatively trivial exercise.

 

[intradaybill]

Quote from tradingjournals:

Where is the analysis of impact of drawdowns, variance reduction (central limit theorem), and probability of ruin? Analysis of average is not enough and is actually a relatively trivial exercise.

He must learn to walk before he flies. Anyway, please provide the analysis you suggested. I thought his problem was more fundamental than variance analysis.

By the way, you think that analysis of averages is a trvial exercise but you be amazed how many are not aware of its consequences. Obviously, someone who comes along and asks "hi guys, I have a 55% win rate, how can I make money?" has some basic ground to cover.

 

[tradingjournals]

Intradaybill: I think you are knowledgeable, and I agree with what your wrote. I think I read a post where you may have wrote something like you are a hair dresser. If you are a meaning it in literal sense, that I think you are able to do more things than just hair dressing. If you however mean that you give people hair cuts in markets, then that is a different story.

 

[gtor514]

I believe the OP may have to consider the percentage of his account he plans to risk. With such a low W/L ratio, a large percentage of the losses up front will wipe out his account.

Here's a screenshot of a Monte Carlo study that may demonstrate the importance of the Risk/Reward ratio and account risk with your Win ratio.

Initial account Balance: $10,000
Account risk per trade: 3.00%
Risk/Reward ratio: 2:1
Win/Loss: 51/49 =>55%wins
No. of Trades: 250(1year of trading)
Final account Balance: $398,104
Note: no consideration of slippage, commisions, etc.

 

[spindr0]

Quote from jimshaw:

If one can predict market daily movement 55% of time correctly, for example, SPY movement, how to profit it ?

Beside trade index directly, what will be other ways to profit from it ?

Other methods I can think of is:
- trade emini
- trade option on SPY

What are other alternatives ?

Trade anything that highly correlates with the SPY.
Leveraged ETF's will give you more bang for the buck.

 

[spindr0]

Quote from Scataphagos:

A 55% "win ratio" is more than enough to be a big-time winner... IF (1) you try to let winners run, and (2) limit losses.

It's as simple as that! You can do well with less than a 50% win ratio if your $ gain to loss ratio is good.

 

[charts]

Quote from Scataphagos:

A 55% "win ratio" is more than enough to be a big-time winner... IF (1) you try to let winners run, and (2) limit losses.

Don't forget the size of winners vs. the size of losers ...