Is this logical?

M

mrpace

I've been reviewing my records over the last 12 trading days, and although I've been profitable in 8 of those 12 days, the 4 losing days wiped out much of my profits over the other 8 winning days.

So, I went back over these last 12 days, and noticed that I'd be much better off if I did the following:
Only trade after a winning setup has already happened. Once a winner has occured, you may trade every signal that comes along, until the next loser, when you will stop and wait until the next winner comes and goes.
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What this means is I should only enter a trade AFTER the most recent setup was a winning one. If I enter a trade and it's a loser, I skip the next setup, waiting for the next WINNING setup before actually putting on the next trade.

My stats over the last 12 days trading 1 E-mini S&P contract and taking every signal with a 1 pt profit target and a 1 pt stop loss:

73 out of 131 (56%) +$121.20 after commissions

My stats after using the above strategy of only entering a trade after a winning trade has happened:

41 out of 64 (64%) +637.40 after commissions.

It seems that on some days, no matter what, my setups get killed. Does anyone else out there employ similar tactics??

MP
 
Quote from mrpace:



My stats over the last 12 days trading 1 E-mini S&P contract and taking every signal with a 1 pt profit target and a 1 pt stop loss:



MP
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This is your problem. If you're going to risk 1 point on each
trade, you need to try and get 3 out of it. At the very least, 2.

It's that simple...:cool:
 
Problem? Does the fact that a 1:1 risk/reward appears to be working for me matter any?

Not that it's significant, but this was not the question I originally posed. However, to answer your comment, I have researched whether upping the reward would improve my results, and thus far, I've stuck with 1:1....


MP
 
Quote from mrpace:

Problem? Does the fact that a 1:1 risk/reward appears to be working for me matter any?




MP
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How do you figure that? You just said that 4 losing days wiped
out 8 days of profit. If you had been averaging a 3/1 profit
ratio, you'd still have some money left, and you wouldn't be
asking this question.


But, being more specific to you're original premise...I don't think
it's a good idea to try and "pick and choose" your trades. I
think you're trying to use gambling logic. You know, If I get 3
reds in a row, I'll bet on blue. Personally, I don't think it's
such a great idea. I think you'd better off, just managing your
profit/loss ratio a little better.
Hope this helps...
 
Not sure if this is a "pick and choose" style. It's more of a well defined method of when and when not to make a signal a trade.

I guess I could answer my own question this way:

If you find that most of your trading wins and losses are clustered, then the style described in my original note would probably work well. If you find that your wins and losses mostly alternate, then this style will get you killed faster than ever...

Thus, I have continue to keep records and research this style futher. However, if anyone is trading like I described above, or has researched this kind of "signal management", I'd like to hear about it...


MP
 
Quote from mrpace:

However, if anyone is trading like I described above, or has researched this kind of "signal management", I'd like to hear about it...


MP
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SIGNAL MANAGEMENT !!...I like that...:D


Let me just add one more thing and I'll leave you alone. :D

Trading isn't a science, where exact things occur. It's not like
when you go to the doctor and he gives you a shot and you know exactly what the outcomes going to be. You can have two
identical setups on your chart and the outcome can be totally
opposite for each signal. I think your best off just taking every
signal your method has to offer.

Best of luck!
 
Quote from mrpace:

I've stuck with 1:1....


MP
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Sounds like you might be more of a scalper. The problem with that is, how do you determine at what price (or if at all) your order would have been filled in your "hypothetical trades"?
 
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