Questions for experienced daytraders

[oilfxpro]

Quote from austinp:

What happens on the 120-cent range, sideways chopping days? -50 cent rips are commonplace now. Near perfect entry timing OR repeated entry after being stop-chopped is the only way to keep draws manageable in between profit swings that erase all losses.

CL is a violent beast now... even -100 cent stops won't prevent losses. Small losses waiting for one solid win is the key to wild market action.

120 cent ranging days are the nothing days, they are acceptable part of trading .

One solid win after 8 to 9 draws losses is no easy on the emotions and mindset.After 8 to 9 draws /losses the humans will lose interest in putting on the 10 th.

A trader who has 50 % plus hit rate will find it easier to place the next trade , those with 70 % find it enjoyable and effortless , those with 10 % to 30 % hit rates will have other problems like stress, drinking etc.

 

[austinp]

Quote from oilfxpro:

One solid win after 8 to 9 draws losses is no easy on the emotions and mindset.After 8 to 9 draws /losses the humans will lose interest in putting on the 10 th.

You have just described the emotional limitations which prevent a suggested 90+% of all aspiring traders from success.

What makes anyone believe a 70% hit rate in trading exists? I don't know a single trader who can average that, sustained. A lot of men and women do for a little while, except for the fact that one (bigger) loss will wipe out all those (smaller) gains.

70% hit rate is emotionally important to traders who don't have an overall edge they trust. Each loss is a big chunk of mortar chipped from their mental wall. Fear and doubt are the constant voices in their minds.

I'm perfectly content to operate within a 45% to 50% win rate structured for myself. That is based on a very favorable -risk to +reward ratio of outcome for entry - stop - exit process executed repeatedly. Each single trade and even each single day is meaningless and irrelevant... unless of course it is a big loss that cannot be survived.

Over time the idea of % correct on trades will mean nothing to you, or even less than nothing. All that matters is size of profit to loss and accepting losses gracefully, without great emotion between profitable sequences.

 

[oilfxpro]

Quote from NoDoji:

If I've conducted extensive research and defined setups that produce at a minimum twice the profit as the risk defined by my protective stop 50% of the time, how does that create a zero sum result?





Even a 10/90 system can make you money. It's about researching the setups you want to trade and finding the levels that produce profit consistently over time IF (ah, there's the rub) you trade all the setups every day. Say your strategy involves "fly fishing" to catch the one or two strong trend days that occur each week. Your average loss is .10 and your average profit on a trending run is 2.00. You average 9 losses for every trending winner you capture. You're nicely net profitable despite a terrible win rate.

What makes you think having a 70% win rate will make you money? What if, for some reason, you're emotionally unable to trade every setup? I had a 70% winning strategy in place for months before I got to the point that I traded every setup. I worked with a trader who couldn't bring himself to trade this system. He wanted certainty in a field of uncertainty and probability.



Can you provide a link to some kind of study or studies proving this?

I used stops of 15 to 20 ticks trading CL and 6E and a trader joined my Skype room who used stops of 6 ticks trading 6E. That was his max stop on any trade. I didn't believe it. He didn't tell me exactly how he traded, but he dropped a hint or two about what he looked for.

I studied like crazy, began to notice certain patterns and I finally figured it out. I now frequently have trades with stops of 4 to 7 ticks and the impact on profitability has been quite positive. On one setup I trade, the entry method that allows the tiny stop provides me an additional 10-15 ticks of profit.

Your studies may have biases and results of some studies can be make believe.Back tests are not reliable because not all inputs can be applied as in live trading.

In an efficient market the wider your target , the lower the probability of attaining the target.The closer your stop , the higher the probability of getting taken out of good trades.

10/90 systems can only make money in theory.It can't be applied in real trading due to loss of confidence after 9 losers/scrubs.

Here is a study

http://www.elitetrader.com/vb/showthread.php?s=&postid=3197399#post3197399

Each trader is different and Corniforex is a genius, 95 % of other traders may fail using small stops.

I am still looking into small stops and set ups with small stops.They work sometimes, but how often ?

 

[illiquid]

Quote from CheckM8t:

Knowing that once a daytrade is put on, there is roughtly a 50/50 chance of price moving in the right direction

Say 1 out of 100 actors hit the big time in hollywood, talking 7 figures annual. So the average salary of an aspiring actor is X. If your target is to make twice as much as your fellow actor, work 2 times as hard. If you want to just be average, you can also choose to work twice as hard but just every other day, or conversely, give just 50% effort overall but star in twice as many roles . . . [/sarcasm]

For me, the percentage outcome for a trade is as irrelevant and misleading as the salary of the average trader. The decision to add, cut, exit, or reverse and double down on any trade is like pornography -- you just know it when you see it. The trick is in learning to see market pornography.

 

[flipside21]

Quote from joe4422:

Just remember one thing. There are close to zero successful traders on this forum.

Probably 1% or less of ET forum members are professional traders.

 

[dejavu8]

Quote from flipside21:

Probably 1% or less of ET forum members are professional traders.

one thing i'm 100% sure is that those are currently running training course for a fee here are not successful traders. some very good traders here offer free help to train newbies.

 

[NoDoji]

Quote from oilfxpro:

Your studies may have biases and results of some studies can be make believe.Back tests are not reliable because not all inputs can be applied as in live trading.

Each trader is different and Corniforex is a genius, 95 % of other traders may fail using small stops.

I am still looking into small stops and set ups with small stops.They work sometimes, but how often ?

If I have a set of rules for entry, stop and target, it doesn't matter whether I apply the rules to a static chart at the end of the day, or to real time price action during the trading day.

I gave my core rules to a trader. He applied the rules and kept coming out net profitable when he followed them. These were core rules. None of my important filters were in place. In other words, I had him trading with-trend and counter-trend, with no rules for survivable stops or avoiding traps. Still net profitable as long as he followed the rules.

He came back to me and said, "If I only trade the setups that are with the trend, it's a lot more profitable."

Beautiful! He discovered something on his own, created a filter and now that will stay with him on his journey to consistent profitability. But that doesn't mean the original unfiltered statistical edge wasn't valid. And there was no way to bias it. The rules were well-defined and easy to follow.

If you want to find setups that allow small stops, drill down to a smaller time frame to "see inside" the price bars of your main trading time frame. Study until you find patterns that get you into profitable trades more often than not with small stops. Memorize the patterns and write down the rules for entry, stop and target. No one can do this for you. It's going to stick when you do the work yourself. How often will the setups work with small stops? Probably about as often your stats tell you they will, assuming you trade every appearance of your setups.

 

[Rationalize]

Quote from dejavu8:

one thing i'm 100% sure is that those are currently running training course for a fee here are not successful traders. some very good traders here offer free help to train newbies.

No profitable trader sees delivering courses or writing research as an opportunity...

These are jobs for failed traders.

 

[oilfxpro]

Quote from Rationalize:

No profitable trader sees delivering courses or writing research as an opportunity...

These are jobs for failed traders.

If they are failed , can they not be considered snake oil training vendor , cause they can only teach the traits of losers.

Just blew the account using snake oil ,it is kinda easy to accept.

 

[oilfxpro]

Quote from illiquid:

Say 1 out of 100 actors hit the big time in hollywood, talking 7 figures annual. So the average salary of an aspiring actor is X. If your target is to make twice as much as your fellow actor, work 2 times as hard. If you want to just be average, you can also choose to work twice as hard but just every other day, or conversely, give just 50% effort overall but star in twice as many roles . . . [/sarcasm]

For me, the percentage outcome for a trade is as irrelevant and misleading as the salary of the average trader. The decision to add, cut, exit, or reverse and double down on any trade is like pornography -- you just know it when you see it. The trick is in learning to see market pornography.

If he/she wants to make double ,they will have to strip on the producer's lap , kinda like blowing your account and being without any clothes here.