Mental Ceilings and self fulfilling prophesies
- Thread starter Girlpower
- Start date
Brother Candle,
It was not my intention to imply inferior performance, but rather to consider the question of the difference between the 1.5 avarage and big winning days like today and by implication raise the question of the drawdowns implicit within that differential.
I too have both big winning days and big losing days and fairly uneventful days. Part of my search with this thread is a discovery of how performance can be raised over time by continuing to capture the larger winning days, while minimising the larger losing days.
Please accept my appologies for any offence caused by this remark.
Best
Natalie
My Brother,
It totally depends on a combinaton of
1) how long my trading methodologies are out of synch with market conditions
2) how aggressive the risk taking is
... it varies...
... and, yes, it is a drudgery to work my way out of 20% drawdowns, hence my thoughts on scaling back the risk in 2) and potentially gradually lowering my long run average to under 1pt per contract a day...
Candle
I thought he was going to answer for a moment, too.Quote from Girlpower:
Brother Candle,
It was not my intention to imply inferior performance, but rather to consider the question of the difference between the 1.5 avarage and big winning days like today and by implication raise the question of the drawdowns implicit within that differential.
I too have both big winning days and big losing days and fairly uneventful days. Part of my search with this thread is a discovery of how performance can be raised over time by continuing to capture the larger winning days, while minimising the larger losing days.
Please accept my appologies for any offence caused by this remark.
Best
Natalie
Quote from Girlpower:
I understand your point completely Brother Candle. So what is it that brings the daily avarage down to 1.5 ish? Is it mechanical restriction? because clearly it is not a psychological restriction...
Best
Natalie
Its simply the fact that of 250 trading days (or whatever the number is) per year, a good number will be losing days which require the same $ magnitude of winning days to merely break even!! Kinda obvious, I know!
Quote from Girlpower:
Brother Candle,
It was not my intention to imply inferior performance, but rather to consider the question of the difference between the 1.5 avarage and big winning days like today and by implication raise the question of the drawdowns implicit within that differential.
I too have both big winning days and big losing days and fairly uneventful days. Part of my search with this thread is a discovery of how performance can be raised over time by continuing to capture the larger winning days, while minimising the larger losing days.
Please accept my appologies for any offence caused by this remark.
Best
Natalie
I think you would need cleaner markets to actually realize something larger than what you consider a very small edge. The ES is not a clean market. Thus, most people decide to reduce their profit expectations in order to avoid all of the giveback on open positions. Unless, you have a very creative trade management strategy that employs scales and/or exits on scales, I don't see how you could consistently max out your winners in this market by simply going all in and all out at once.
When put that way, I fully concur (but bear in mind that the "crazy risk taking" enhances, not reduces, my average... albeit at the expense of larger drawdown magnitude and volatility along the equity curve)...
i will answer for myself. the difference between good and gooder days for me is timing: there are days when the techniques at hand match up well with the boundary between yesterday's close and today's open. and there are days when they do not.
it's a combination of markets sometimes being continuous across the daily boundary and the too-large granularity that is inherent to techniques derived from longer-term patterns/analysis.
however, that is also an advantage, today being an example: the very same factor limiting profit on some days today kept me from being the wrong side of a vertical move.
but that only mitigates the problem, it does not eliminate the inefficiency.
it's a combination of markets sometimes being continuous across the daily boundary and the too-large granularity that is inherent to techniques derived from longer-term patterns/analysis.
however, that is also an advantage, today being an example: the very same factor limiting profit on some days today kept me from being the wrong side of a vertical move.
but that only mitigates the problem, it does not eliminate the inefficiency.