Money Mgmt beats Stops Everytime - Example

Agree with you completely.

Quote from Mike805:

I buy when my system says to buy. This could be either below prior lows, or, at the breaks of a certain techinical price points i.e. drastic/sharp moves down.

One of my strategies that buys drastic down moves fails miserably when hard price based stops are used. That's because from a purely systemic standpoint - it is near impossible to pick bottoms - I can prove this BTW.

The key is that you have to be willing to take on and deal with the risk and more importantly - the fact that what happens after the trade is UNCERTAIN... there is a probability involved, but, one has no idea how far down a move will go until some reversion occurs. That means your stop is just as likely to get hit as is your target...

Of course there are occasional large losses, there is no way around losses. In my 10+ years of trading every good strategy I trade and have traded requires the ability to deal with discomfort and uncertainty. The better ones cause the most "discomfort". If you're doing something that "feels good" or gives you a sense of security, you're likely doing something wrong. Price based stops, in my opinion, give one a false sense of security.

Note that I average down when I believe the low has already been made and the price is entering value again. This is an >80% probability setup. But, as many have mentioned, if you can't or WON'T take that loss when is time to close the trade, you will blow up. That's true of any trading style. Mine just happens to use time, not price to exit a losing trade.
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I have a 90% win rate. You can't achieve that by gambling. There's not much else to say Homey. If you don't like the method then notta problem. Just do your thing.

Quote from athlonmank8:

What are they doing? Standing in front of 52-week lows? Shit's down there for a reason. Unless you want to hold a pile of bags, you DON'T buy all-time lows (including daily lows).

It may be different from a long-term perspective but regardless, you're gambling.

Follow the pros. You need to understand these things. You're on the right track with the data set argument. But somehow you managed to screw yourself up along the way.

Where do you come up with this shit?
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Quote from ProfitTakgFool:

I have a 90% win rate. You can't achieve that by gambling. There's not much else to say Homey. If you don't like the method then notta problem. Just do your thing.
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90% win rate?! lol your screen shot looks like YOU don't even believe that.
 
Not true. If I'm picking a bottom and we get one of those days when the market grinds downhill all day long I'm supposed to let them run? My method nets me profits whether we are in a downtrend or not. Either way I win. I'm not a "let them run" trader. I'm a profit taker. The amount of the move that I miss is meaningless. I'm just out there to collect points.

Quote from athlonmank8:

5 years I played bottoms like you did. And it got me to flat if not a little down.

I know first hand what you're doing and IT DOESN'T WORK RELIABLY ENOUGH.

2nd your exits suck. If you're going to pick bottoms, you don't scalp for 2 points.

The whole point of picking a bottom is to catch the "big run." Not scalp them. Why not scalp flow if that's the case? A lot easier.
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If you pick bottoms I'll give you the best advice ever.

1)Play them small. ------->>> Agree

2) Don't average down -------->>> You can't pick a bottom so precisely that you can use stops. Cardinal rule picking bottoms. Don't use stops but follow rule 1 religiously.

3) Pick them systematically (yes this is possible but the reliability is MUCH lower). When you "think it's bottomed" is not the definition of systematic. ------->>> I do have a systematic approach but this often fails. Today was such a case. If I adhere to rule number 1 I still win.

4) Use tight stops------->>> Never.

5) Get away from the computer and let it run big (don't even think of looking at it).-------->>> Not my style. Notta a problem if it's yours but each trader is different. I'm in a zone when I'm taking profits relentlessly.

6) (for the advanced) ADD on the way up. -------->>> No can do. I never chase the market. I buy down, sell up, take profits like a fool. Forget the rest.

You failed 2, 4, and 5.
 
Quote from ProfitTakgFool:

Not true. If I'm picking a bottom and we get one of those days when the market grinds downhill all day long I'm supposed to let them run?
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Yes, BUT depending upon where the market is trading on a daily timeframe you'd be smart enough to be short for obvious technical reasons.
 
Quote from ProfitTakgFool:

I don't make claims I can't prove.
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If you followed rule 1 you're a large portion there. That's the big one.

Systematic trade....you got it.

70% there. You're better than I had thought.

With that said, that's enough to get your trading to break-even IF you take quick profits.

I have a feeling that even at 90% accuracy, you're still a break-even trader for the simple fact of not wanting to let it run.
 
I don't use that method because I don't follow the market, I fade the market for reasons that are too lengthy to discuss here. It comes down to this....if this method ain't for you and what you do works then cool. I'm not trying to force feed this to anyone. Just showing folks a different way if they are open to it.

Quote from athlonmank8:

Yes, BUT depending upon where the market is trading on a daily timeframe you'd be smart enough to be short for obvious technical reasons.
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Alright, how do you want me to prove it short of posting weeks and months worth of brokerage statements?

Quote from athlonmank8:

If you followed rule 1 you're a large portion there. That's the big one.

Systematic trade....you got it.

70% there. You're better than I had thought.

With that said, that's enough to get your trading to break-even IF you take quick profits.

I have a feeling that even at 90% accuracy, you're still a break-even trader for the simple fact of not wanting to let it run.
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