Impossible to find a real pro with a real edge as a mentor?

[shortie]

Quote from riskfreetrading:

Now you are making me doubt whether you have the correct understanding of the problem. ALL probs are meant to be probabilities when stop is implemented.

The difference between the values sought is in the nature of the events. Therefore I would denote the one with a dash as the ones that correspond to a trade which is stoped, and the ones without a dash the ones that correspond to EOD events.

Thererefore we are looking for: P'eod(A)/P(D).

I think that the way you want to solve the problem gets you to go back and slightly change the problem without you realizing it? (unless I mis-understand).

Instead of finding the ratio, and to get you out from the way you now seem to think about the problem, I will ask this:

could you compare P(A) to P'eod(A)?

This will put your mind to work on the difference between the P() and the P'eod() since the event (A) is the same for both.

I guess that this will get your wheel out from the spinning.

i am confused with all these probs.

also, i am getting weird #s in my simulation and they seem to be dependent on the Stop value. examples of the prob ratios am getting: 6.6/1 or 5/1 depending on Stop value.

i will check your solution and then re-simulate again.

 

[whitemills]

Isn't this whole question just getting to the fact that the probability of getting stopped out is a function of the size of the stop vs. the standard deviation of the daily range, while the probability of making a similar gain would be a function of the size of the stop vs. the standard deviation of the daily returns?

Effectively, this would make the ratio that answers your question a function of the ratio of the standard deviation of the daily range to the standard deviation of the daily returns, correct?

 

[whitemills]

As an example from my previous post - if the stop is set at 1%, the standard deviation of the daily range is 2% and the standard deviation of the daily returns is 1%, the ratio in the original question would equal 1.94 : 1.

That is, you'd get stopped out 30.85% of the time, and you'd get an end of day return of 1% or more 15.87% of the time.

30.85%/15.87% = 1.94:1 ratio of hitting the stop vs. getting a similar sized gain.

Unfortunately, the math to convert the three inputs (stop, std dev of range and std dev of returns) into that ratio doesn't come naturally to me, but I'd love to see the derivation to see if my rusty AP calculus comes back to me... I confess to no longer being able to integrate functions of e.

 

[casioboy]

conact me if FX mentor is needed.

 

[J.P]

Mentorship is available to serious traders that can be structured in a fair way for both parties involved.

Mentor & Student agree on partnership in which mentor teaches student proprietary system or method. Student places 'fee' for learning and method in escrow account with contract attorney. The agreement stips that the student will work for mentor executing the methods taught after learning process for 'x' years. Mentor puts up capital for trading or equity partnership can be established. Profits splits are agreed upon in contract.

Risk to student: contract states if trader violates rules of the method / system and hits maximum drawdowns over # of trades, % drawdown or length of drawdown than employment contract is violated with 'fee' held in escrow released to mentor. Student has not shown ability to become profitable trader even with clear method. Protects Mentor

Fee Payment option: Mentor fee can be paid through profit split (higher %). Once this is achieved the 'fee' in escrow is released back to student, and profit split moves to contract split %. Benefit to Student & Mentor

Audit guarantee: If student trades according to rules (dependent on level of subjectivity in method) and loses money of agree upon period of time, trades or % drawdown the 'fee' is released back to the student for failure of the system/method. Protects Student


might be interesting to a professional trader....