If trend following, can money management save you in chop?
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well there you go. Buy1Sell2 has told us the answer is "yes". Please Buy1Sell2 tell us how is this possible? We are anxiously awaiting your reply.
I consulted my Magic 8 Ball and it replied "not at this time" so I am a little confused. But before I go with the advice of my experts (which like I said is a Magic 8 Ball and a Kennedy half dollar which has had amazing results going long on heads and short on tails) I would like to hear your advice since it sounds like you really know what you are talking about.
I wasn't sure from your reply if that was an emphatic "yes" or a yes with conditions. If it was a yes with conditions well then the answer to anything is yes if certain conditions are met.
So I applaud you for your brevity, but somebody has to pay for all these typed characters on the internet, so you could have saved us all a little money by just replying "no", since it would have done us all the same good.
and just to set the record staight, there is no such thing as risk without risk of ruin. The only system I know of that has no risk of ruin is Martingale, and that only applies if you have infinite money in a market with infinite liquidity. Any trader who put his first car of corn on and forgot everything he learned in highschool math knows that there is no such thing as risk without risk of ruin. It doesn't matter if you are risking 1% or .00001% per trade with a win rate (there is no such thing) of 60% or 99%, you still run the risk of ruin. I don't know what kind of mistake you have made in your math to think that somehow you have bypassed risk of ruin and talk about it like it is some big deal. It's always there and will aways be there and there is no way around it.
You're wasting your time with imbecilebill. Notice that for all his talk about mathematical analyses, his posts are remarkably short on actual mathematics. That's because he's a crank and a poser who thinks that he can substitute verbiage for real mathematics and he foolishly assumes that none of the rest of us will notice. Actual proofs such as I've presented mean nothing to him because he lacks the logical capacity to understand them, so he dismisses them. He's a classic example of an arrogant fool laughing at things well beyond his ability to grasp them.
yeah, except 1:3 is the losers ratio and just another traders myth. I don't care if you trade once a decade or 100 times a day. Any 1:3 trader over time will break even minus the spread and commissions. It looks good on paper, but show me any real track record from a real trader trading real money that has made money trading 1 to 3. It's the place to start and should be some kind of a benchmark whether you want to adhere to it or violate it, but 1 to 3 in real life explains just how severe the problem is.
Don't even start with me on win rate, that is about as meaningful as the win rate of the New York Yankees.
If you bet only a small % of your account per trade, and reduce that size at various drawdown levels, then it is very difficult to go broke. For example, if you reduce risk per trade to 0.1% once you drop below a 20% drawdown, then an additional 1000 consecutive losing trades will still leave you with 30% of your initial capital. The likelihood of even a low win rate system with +EV having that many losers is far, far less than the chance that you will die during the losing streak.
Once you reduce risk of ruin to below your risk of death, any further risk management is besides the point
I never met anyone more unstable than you. Actually, you claimed in another thread after a proof you plagiarized that:
So what q > p means you stupid head? Don't you realize that if
q+p = 1 then q > p implies that 1-p > p which implies that
1 > 2p
which you stupid crank of the highest kernel further implies that
p < 1/2 you idiot?
or that a win rate of less than 50% guarantess according to you imbecile idiot with severe psychosis that without a target profit exit ( T --> infinity) then
R{infinity|X|C} = 1, your claim?
This is simply another proof that you didn't know in that thread what you were plagiarizing and DontMissTheBuss was correct that you are a lunatic.
Look at it again idiot. You supposedly proved yourself that if the win rate is < 50%, ruin is certain unless the trader exits before that happens.
Ruin is not certain if for win rate < 50% the trader sets a target bankroll and achieves that before getting ruined.
Your derivation was anyways a circular proof.
I have given you a simple mathematical proof that ruin is certain under all circumstances if a target profit for quiting is not set.
It is too elegant of a proof to fit in your head.
that's true. Or better yet, just increase your lifestyle risk during drawdown and you wouldn't have to adjust your trading risk at all. If it all works out you could always quit smoking to keep everything in balance.Quote from Ghost of Cutten:
If you bet only a small % of your account per trade, and reduce that size at various drawdown levels, then it is very difficult to go broke. For example, if you reduce risk per trade to 0.1% once you drop below a 20% drawdown, then an additional 1000 consecutive losing trades will still leave you with 30% of your initial capital. The likelihood of even a low win rate system with +EV having that many losers is far, far less than the chance that you will die during the losing streak.
Once you reduce risk of ruin to below your risk of death, any further risk management is besides the point
how many times do we have to go through this? A trader with a very bad win rate loses almost everything on the horses and gets involved in a crooked crap game and goes through a very messy divorce. He has a loss rate of 100% and takes his last $350 and buys 10 oz of gold before Nixon. Now just when does your formula state he will achieve ruin? It better be soon because he can't wait much longer and his heirs have their eyes on that gold.