Prudent Risk Management Is The Only True Edge In TRADING

Is Prudent Risk Management the only true edge in trading?

  • Yes

    Votes: 53 29.9%

  • No

    Votes: 124 70.1%
  • Total voters
    177
If trading was as easy as you think we would all be millionaires.

I have never had trouble with discipline. You show me a system where all i have to do is risk 1 to make 5 and follow it to make money and I will do it. You put up the money. I will follow it.
If i dont follow the system once I will pay you double what you invested. Deal??
 
tommo said:
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
More...
I don't recall advocating 50% wins.
 
tommo said:
I have never had trouble with discipline. You show me a system where all i have to do is risk 1 to make 5 and follow it to make money and I will do it.
More...
You have now come full circle and are in full agreement with us.
 
Im telling you. I have done exactly what youre advocating.

A strategy with zero edge with a fixed risk:reward whether that be risk 1 to make 5, or risk 10 to make 1, or risk 1 to make 1 etc etc will always breakeven. The win rates will change.

Inversed risk reward will have higher win rates. Positive risk:reward lower win rates but will all be around breakeven until costs and slippage are added. Dont know what else to add. This is mathematical fact
 
tommo said:
If trading was as easy as you think we would all be millionaires.

I have never had trouble with discipline. You show me a system where all i have to do is risk 1 to make 5 and follow it to make money and I will do it. You put up the money. I will follow it.
If i dont follow the system once I will pay you double what you invested. Deal??
More...

Using PMM prevents one from ability to make huge returns due to risk controls, just like the best capital management firms average annual returns are a hellavelot less when compared to performances of individual best traders. A firm that has a top trader will only grant him a percentage of the firm's assets, again due to PMM.
 
tommo said:
Im telling you. I have done exactly what youre advocating.

A strategy with zero edge with a fixed risk:reward whether that be risk 1 to make 5, or risk 10 to make 1, or risk 1 to make 1 etc etc will always breakeven. The win rates will change.

Inversed risk reward will have higher win rates. Positive risk:reward lower win rates but will all be around breakeven until costs and slippage are added. Dont know what else to add. This is mathematical fact
More...
This is False.
 
romik said:
Using PMM prevents one from ability to make huge returns due to risk controls, just like the best capital management firms average annual returns are a hellavelot less when compared to performances of individual best traders. A firm that has a top trader will only grant him a percentage of the firm's assets, again due to PMM.
More...

Not true again. Large firms are constrained by the strategies they can use with such huge capital bases. Smaller traders can be more nimble.

I keep about £30k in my trading account and on a bad month will make £5-6k, on a good month £15k-£20k. I am at a prop firm so they give me added leverage but probably use about 100k in exchange margin at the most. So making between 5-20% a month. And have been pretty consistent for about 10 years.

Are there even any prop traders on this forum? They will have similar stats.
 
You must log in or register to reply here.
Back
Top