Prudent Risk Management + No Edge = Positive Expectancy??

I

ironchef

I have been trading a system for 7 weeks with positive results.

The system is eerily similar to a random coin toss, win rate ~ 50%, R:R ~ 1:1 but both are skewed slightly favoring win and reward. Statistical sample analysis showed these are not statistically significant, i.e., could be due to sample size errors.

Risk Management: Cut losses aggressively, take wins aggressively. Exit trades, call it a day when cum trades produce a profit or total # of trades exceed X, which ever comes first.

75% winning days and 6 consecutive winning weeks are highly unusual for a random coin toss.

Could @Buy1Sell2 be right? Or I am fooled by randomness?

Comments/feedbacks are welcome especially from the math wizards on ET.
 
yes if you do scale in into your winners, otherwise no positive expectancy. Get familiar with the Euler figure. You should scale in within a good trade according to Euler. Then you can make money even with no edge. But with no edge I mean not negative edge, I mean exactly zero edge.
 
I was able to create something worthwhile using this (not intraday btw). I think it is best to combine with logic. My entry criterium would make you laugh out loud.
 
Zwaen said:
I was able to create something worthwhile using this (not intraday btw). I think it is best to combine with logic. My entry criterium would make you laugh out loud.
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I won't laugh, even @SimpleMeLike's click, click, click and use your eye works for some. It is actually not that bad a way to go.
 
ironchef said:
I have been trading a system for 7 weeks with positive results.

The system is eerily similar to a random coin toss, win rate ~ 50%, R:R ~ 1:1 but both are skewed slightly favoring win and reward. Statistical sample analysis showed these are not statistically significant, i.e., could be due to sample size errors.

Risk Management: Cut losses aggressively, take wins aggressively. Exit trades, call it a day when cum trades produce a profit or total # of trades exceed X, which ever comes first.

75% winning days and 6 consecutive winning weeks are highly unusual for a random coin toss.

Could @Buy1Sell2 be right? Or I am fooled by randomness?

Comments/feedbacks are welcome especially from the math wizards on ET.
More...

at 50% win rate with 1:1 RR, your results would've been negative with commissions

What's your ACTUAL win/loss %? And what your avg win/loss ratio? Those are the numbers you need to figure out if you have any edge.

And don't go by just number of weeks, go by trade numbers for sample size. 100 should be absolute minimum. Timeline; it depends if it's scalping or swing trading.

When you use language like "win rate ~ 50%, R:R ~ 1:1" Tells me you're very wishy washy in your trading.
 
TrAndy2022 said:
yes if you do scale in into your winners, otherwise no positive expectancy. Get familiar with the Euler figure. You should scale in within a good trade according to Euler. Then you can make money even with no edge. But with no edge I mean not negative edge, I mean exactly zero edge.
More...
I know Euler's number and e but am not familiar with Euler figure??
 
hilmy83 said:
at 50% win rate with 1:1 RR, your results would've been negative with commissions

What's your ACTUAL win/loss %? And what your avg win/loss ratio? Those are the numbers you need to figure out if you have any edge.

And don't go by just number of weeks, go by trade numbers for sample size. 100 should be absolute minimum. Timeline; it depends if it's scalping or swing trading.

When you use language like "win rate ~ 50%, R:R ~ 1:1" Tells me you're very wishy washy in your trading.
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%%
Could be;
unless he meant it was like [not exactly] a coin toss;
I would wish also for + get something better than 50-50% LOL but that'$ me = otheR turtles did better with worse RR + %:D:D
 
hilmy83 said:
at 50% win rate with 1:1 RR, your results would've been negative with commissions

What's your ACTUAL win/loss %? And what your avg win/loss ratio? Those are the numbers you need to figure out if you have any edge.

And don't go by just number of weeks, go by trade numbers for sample size. 100 should be absolute minimum. Timeline; it depends if it's scalping or swing trading.

When you use language like "win rate ~ 50%, R:R ~ 1:1" Tells me you're very wishy washy in your trading.
More...
No commissions trading stocks.

As of last week, after 397 trades, 215 win. R:R more difficult to determine, perhaps 1.05:1

Last week is more difficult to assess. I am experimenting with not exiting after cum win but trade a fixed number everyday. Preliminary outcome: Not good. Two losing days in a row were losses when I made 50 trades each day.

Not scalping, trend following.
 
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