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

[Spike Trader]

Quote from jimshaw:

Dear All:

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 ?

Thanks,

Trade Binary Options

 

[jimshaw]

In the graph, do you assume that 51% win or 55% win ?

Quote from 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.

 

[gtor514]

Quote from jimshaw:

In the graph, do you assume that 51% win or 55% win ?

For the simulation I showed, I requested a maximum win rate of 55%. The actual simulation used a 51% win rate which resulted in the graph.

My apologies for not clarifying that better.

 

[d08]

Consistency is what matters. 55% doesn't say anything about it. If we all could afford to ignore consistency, this would be easy.

 

[KINGOFSHORTS]

Quote from jimshaw:

Dear All:

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 ?

Thanks,

Hawk on the TV,web,etc.. for 29.95 a book on how to become a millionaire. And of course call up customers and try to sell them on bigger packages, such as the 499.95 special CD/DVD video set and traning materials etc..

Make sure to make the TV ads show a bunch of trailer park trash going from the trailer to Mansions and show them holding up big checks as they sit next to the Ferrari and docked Yacht.


You will make a big chunk of money.

 

[Scataphagos]

Quote from d08:

Consistency is what matters. 55% doesn't say anything about it. If we all could afford to ignore consistency, this would be easy.

How is "win ratio" different from "consistency"?

 

[Hydroblunt]

Quote from Scataphagos:

If "commissions and spread" have a significant impact on your P/L, you're fishin' in a dry hole.

Are you serious?

Some of the largest trading strategies depend on controlling the commissions + the spread and keeping them to a minimum.

Obviously you are not aware that on the large hedge fund scale this is very important.

 

[Scataphagos]

Quote from Hydroblunt:

Are you serious?

Some of the largest trading strategies depend on controlling the commissions + the spread and keeping them to a minimum.

Obviously you are not aware that on the large hedge fund scale this is very important.

I was talking about "Joe one-lot" doing his discretionary trade struggle... not the automated algo and HFT ETers.

 

[indahook]

Quote from cooolweb:



strategies i trade have a 80% win ratio on paper, 50% in reality 1:30 risk reward ratio.

Your full of shit. Period. Running a 1/30 Risk/Reward with a 50% hit rate would make you the best trader who ever lived.

Crawl back in your hole...

 

[d08]

Quote from Scataphagos:

How is "win ratio" different from "consistency"?

So it's okay if you had all the winners inside a 2 year period but your sample size is 10 years? A system that returns 200% in 2008 but 5% in the previous 3 years is not a good one, whatever the win ratio or average return says.