Prudent Risk Management Is The Only True Edge In TRADING

[tommo]

We're trying to help you

I have been making 6 figures a year solely from trading for almost 10 years. I'm happy enough with the experiences I have had guiding me

 

[Buy1Sell2]

And what about when flip 5,6,7 and 8 are also -100's? You will not have a 25% win rate risking 1 to make 5 without an edge

Coin flipping is 50%

 

[tommo]

Sigh... Yes! Because you can only go long or short. 2 options. 50/50.

But that doesn't mean your odds of winning is 50/50

 

[Buy1Sell2]

I direct your attention to the poll above. It has a correlation with the widely publicized contention that most traders fail. Successful traders realize that PRM is the only true edge in trading. Anyone, I mean anyone can pick entries. Few can manage risk.

 

[Buy1Sell2]

Sigh... Yes! Because you can only go long or short. 2 options. 50/50.

But that doesn't mean your odds of winning is 50/50

But a successful trader doesn't even need 50% wins to be highly successful

 

[romik]

And what about when flip 5,6,7 and 8 are also -100's? You will not have a 25% win rate risking 1 to make 5 without an edge

A run of 'bad luck' can happen to a high win system too, but what would happen to an inverted risk:reward strategy then? (you mentioned earlier that your acquaintances within the industry regularly risk 10 to gain 1).

 

[Buy1Sell2]

A run of 'bad luck' can happen to a high win system too, but what would happen to an inverted risk:reward strategy then? (you mentioned earlier that your acquaintances within the industry regularly risk 10 to gain 1).

that's right Romy----Wonder what your win percentage would need to be with risk 10 to get 1

 

[tommo]

A run of 'bad luck' can happen to a high win system too, but what would happen to an inverted risk:reward strategy then? (you mentioned earlier that your acquaintances within the industry regularly risk 10 to gain 1).

Because the traders i cited risking 10 to make 1 have an edge and will typically win 20 or 30 times in a row for every loss.

We're going in circles. Please by all means go and run a backtest on your strategies. I will bet you money right here right now it will not make money.

You are assuming a 50-50 choice leads to a 50-50 outcome

 

[Buy1Sell2]

--or whether or not Phil Hellmuth would advocate putting 10 dollars into a 1 dollar pot

 

[romik]

Tommo, we aren't being argumentative for the sake of the argument, all a nice debate. Let's carry on.

I think you made an irrelevant example with coin tossing to a degree, because it doesn't support your notion.