If you enter a high-probability trade and then the charts movement goes to 50/50, what do you do?

[CyJackX]

Obviously, this is all premised very strongly on whether your system has any merit.
But let's assume it does.

You enter a trade, and then it moves (profitably or unprofitably) to a state where you are uncertain of the direction. Now it's a matter of exiting. If you weren't in a position, you'd neither buy nor sell here. So what should you do at the point where it's a coinflip for money? Something seems paradoxical in my thinking here...

 

[tlatoani]

Obviously, this is all premised very strongly on whether your system has any merit.
But let's assume it does.

You enter a trade, and then it moves (profitably or unprofitably) to a state where you are uncertain of the direction. Now it's a matter of exiting. If you weren't in a position, you'd neither buy nor sell here. So what should you do at the point where it's a coinflip for money? Something seems paradoxical in my thinking here...

It's always 50/50 or worse. no such thing as a "high probability" entry for retail.

 

[Mtrader]

If you weren't in a position, you'd neither buy nor sell here.

Very simple. If you don't know what you are doing you should get out immediately. Till you know what you should do again.
But normally you should know what to do. At least if you have a system. A system that you always should follow.

 

[birzos]

If you're not sure what to do, always take the least worst, that is to exit.

Then always do what you don't want to do, never do what you want to do, and stick to your plan.

Unless something changed which then goes full circle back to least worst.

 

[Negative Theta]

Imo, no, it's not 50/50. You have the costs of the trades too.

 

[big mac]

I wait till I am certain, either way. IOW, I don't go outside my discipline whether the trade is profitable, or my stop hasn't been triggered. I am constantly second guessing myself, and I welcome that. But I need a lot evidence to counter my rules.

 

[tiddlywinks]

Obviously, this is all premised very strongly on whether your system has any merit.
But let's assume it does.

You enter a trade, and then it moves (profitably or unprofitably) to a state where you are uncertain of the direction. Now it's a matter of exiting. If you weren't in a position, you'd neither buy nor sell here. So what should you do at the point where it's a coinflip for money? Something seems paradoxical in my thinking here...

When YOU are uncertain you exit. When in doubt, get out.

I read an implied issue however... "If you weren't in a position, you'd neither buy nor sell here" Exiting due to a lack of a signal does not produce an "uncertain" situation. When the market does something against you and your system expectation, that would trigger an exit, regardless of whether you understand the reason or not, regardless if you use stops or not. You should exit and reevaluate the unexpected, adverse movement and not sit in a position in that (profit or loss) situation.

 

[tlatoani]

Imo, no, it's not 50/50. You have the costs of the trades too.

Yes, its a negative sum game

 

[Mtrader]

It's always 50/50 or worse. no such thing as a "high probability" entry for retail.

A trader does 1000 trades.
+60% are profitable and by consequence -40% are losing.
Average profit per winning trade is bigger than average loss per losing trade.
Can you explain me how this fits in your statement?

It is a negative sum game for all the traders together. But some are profitable and many will lose. So zero sum or not is irrelevant for individual traders.

 

[tlatoani]

A trader does 1000 trades.
+60% are profitable and by consequence -40% are losing.
Average profit per winning trade is bigger than average loss per losing trade.
Can you explain me how this fits in your statement?

It is a negative sum game for all the traders together. But some are profitable and many will lose. So zero sum or not is irrelevant for individual traders.

Sure, you are talking about hindsight--- hindsight has nothing to do with the probability of a trade being profitable. Im talking about entries, not looking at past results.