Surf Report
- Thread starter marketsurfer
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Yes Mr. Surf, but OVER WHAT TIMEFRAME is the 1000 point drop guaranteed to happen?
You speak in absolutes about your predictions, in an abstract way. I can do the same thing. Everyone can. It's the timeframe everyone needs, man.
Prior to new highs.
Well, gee, thanks for that ambiguity.
mr volpri will have to answer your question for himself but i will say this: without a doubt a high win rate is one of the most important metrics in trading. Perhaps the most important. It is tied directly to risk of ruin. I know I have probally opened a can of worms here. Many will say that a 30% or 40% win rate is fine as long as your profits are bigger than your losses. In theory that may be so, however, in the real world it is difficult to make that work in the long term, say over many years.
But I will let someone else explain it: http://systemtradersuccess.com/important-performance-measure-trading-strategies/
Apparently, volpri structures his trades to have a high win rate. He probally has his reasons. Of course, you are correct. If he cherry picks the trades that he shows then he in effect is lying about any high win rate. But how would he prove it? Say he shows a blotter. People will say it can be photoshopped. I guess you just have to take his word for it. It is probally more useful to study his trades and posts and see if you can detect anything useful and test it out yourself.
Hey.. you're one of the guys whose posts I like!
The link you provide is from that Harris guy who I cannot stand. He is all math, which is good, but whenever he tries to disprove TA, he does it with random entries. A PA/TA trader isn't simply entering randomly, so all his math to back up his claims are pointless.
I notice he says you need a 70% win rate in order to not have a risk of ruin. This number is absolutely worthless without a R:R attached. I bet I could get 1-2 tick profits in the NQ 70% of the time, but the R:R ratio would be skewed very badly. A simple 1:2 ratio with a win rate of 50% is absolutely fantastic and I don't see why this wouldn't be so.
With you saying that its difficult to make 30-40% win in the long run, I'm not sure why. If you're using a 5pt ES stop and hoping for a 15pt target, as a day trader, then yes, you might be in trouble seeing as we don't even move 15pts on some days, but we can focus on targets that are more attainable, like a 3pt stop in the NQ with a 10pt target. Obviously a 30% win rate isn't making you profitable here, but if you take the past 100 trades, and figure out the ideal setting of stop and target for these trades, it really gives you something to work with. I have done this and its a huge eye opener.
I'm not sure what you mean by him structuring his trades to have a high win rate. Everyone would love to structure their trades like this.. LOL... but I'm not sure how to structure this other than being exceptional with your entries, which is of course the name of the game.
Its a shame that nobody at ET will provide a list of trades, and so I only have my own data to analyze, but often times you can tell if a person is lying or not if you can see how they trade. There should be cases of exiting at the worst place, entering at the worst place, etc. The secret to making money is how these are managed. I just don't believe that someone could have a 90% win rate with very tight stops, and I'd have to see the data to support this if it was true. Often times, setups repeat over and over again that are quite similar, and yet don't work 90% of the time. You don't know in advance when the next trade will work, so you just have to take every one that comes up. If you get to the point of filtering your trades so much in order to extract every possible nuance to maybe increase your win rate, my opinion is that now you will have so few trades, and hence less overall profits, than simply taking the trade and cutting it quickly and moving onto the next one. I would of course love to be proven wrong in this regard, but nobody is sharing stats and entries.
One of my big moves forward was focusing less on why a trade didn't work, and then just moving to the next trade. Mark Douglas said it very well when he said that when a trade doesn't work out, all it means is that the people who would usually be around to buy at the time you did to push price in your favor simply didn't buy this time. We have no idea when this will happen. I have tried to incorporate things like Order Flow into the equation without success, as well as Cumulative Delta, and both, in my opinion, are still a toss up. They work just as often as not. If you want to take a trade but want to see huge bids under you, good luck, cause sometimes they won't be there, and price will still rise. If you want to see the CD positive, showing more aggressive buyers as they say, good luck, cause often times I see the CD creep downwards as price is creeping higher. So looking for high win rates by trying to incorporate other things just didn't work, at least for me. What has cost me more money than anything else is missed opportunities because I was scared to take the trade in fear of it not working.
For me personally, because I use tight stops, I forget the BE trade. For the NQ, I have a spreadsheet where I track each trade and just figure out what combo hits first. -2/+2, -2/+3, -2/+5, -2/+10, and then using a 3pt stop, and then a 5pt stop. I only track whatever hits first. Now I will say that often, its obvious that when it goes +5, it sometimes goes +10, but there is no point in letting is stop out at -3 if its already gone +5. But I don't exclusively track this. I do have a column in my spreadsheet that accounts for this what-if scenario though. The thinking is that if it went +5, and hence its a profit in the -2/+5 column, then if it goes to the +10 column but doesn't hit +10, I only subtract the loss from the trades that don't hit +5. If it hits +5, I assume that it would be closed at zero, and not let it stop out for -2. I do realize that sometimes, price will dip right back to my entry after hitting +5 before hitting +10, which would be a stopout at BE, but this is very rare.
The idea isn't to show exactly what I could have made, but simply to track my performance of micro managing a trade, versus letting it just work its way out. Its amazing how often fixed stops and targets are better than my micro managing.
Sorry, I am not nostrodamus!
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