OK, I'm kind of frustrated. I got a setup and with stop = target, it gets 50% wins, 50% losses. OK, let's "let profits run"... so I make the target 2x the stop. Guess what happens? Win % goes down to 33% and we're at breakeven again. Argh. And of course if I make target 1/2 of stop, I only yield 66% wins which is again.. breakeven. So does this mean, the setup has no edge? How do I find a setup with an edge? BTW, I'm testing on 5min ES and 15min ES.
the risk/reward and win %
- Thread starter traderkay
- Start date
Looks to me like its back to the drawing board. If your looking for an edge, ala a system, peruse the Keeping It Simple thread for ideas. But, I have to wonder whether anyone who had a really profitable system would share it in public, for fear that if too many people used it it would disrupt the natural ebb and flow of the market, and become useless.
that's like asking the Fire Dept to set up your business plan. "Well if there's a fire, this is what you do, and if there's no fire, then that is what you do."
Try separating your disaster procedures (stops) from your business goals (targets).
For those that need a translator, that means you use one set of criteria for your target and a completely non mutually assured destructive anomalous divergent set of different criteria for worst case scenario proceedings.
confused: )You have not done anything different in your series of target moves because deviate from the determined target.
I will say it another way for you. you have a paradigm and it yields a target. You did not change anything within the paradigm;you modified a value called target.
I recommend that you drop the part of the paradigm called target. With what remains you have an entry and perhaps a reversal strategy and also a protection element of some sort.
Use the protection element in an additional manner. The protection is designed to keep you in the trade. This means that as time passes you preserve profits using it. Ultimately it will let you out when the protaction is breached. We can do better.
Take the part of the protection in the paradigm and review it so you can see how to use it on the opposite side of the envelope of the trend than the "loss" side. there are two parts to consider. The frequency of the protection adjust ment. Use that as is. The other part is the linkage to the trading price and the present value of the "protection". Use this to perform a test of price and the side opposite to the loss side. You should be able from that new element to generate a signal to you that says: "no adjustment possible". Exit at market at this point.
In effect you will be as far away from your protection stop value as possible at just the time when the trend is stopping making new ground into the profit side of the trend.
What you are always striving for is to stay away from your protection by trend progress. Go out when this progress stops and much before the protective stop would be reached.
Targets involve the myth of predicting. This flaw in your current paradigm, once removed gives you a chance to stay with any trend. You are missing an element that says when the trend is over. You can add that as above.
If your paradigm lacks the dynamic protection aspect, then it is not a possible thing to be using to make money, practically speaking.
I will say it another way for you. you have a paradigm and it yields a target. You did not change anything within the paradigm;you modified a value called target.
I recommend that you drop the part of the paradigm called target. With what remains you have an entry and perhaps a reversal strategy and also a protection element of some sort.
Use the protection element in an additional manner. The protection is designed to keep you in the trade. This means that as time passes you preserve profits using it. Ultimately it will let you out when the protaction is breached. We can do better.
Take the part of the protection in the paradigm and review it so you can see how to use it on the opposite side of the envelope of the trend than the "loss" side. there are two parts to consider. The frequency of the protection adjust ment. Use that as is. The other part is the linkage to the trading price and the present value of the "protection". Use this to perform a test of price and the side opposite to the loss side. You should be able from that new element to generate a signal to you that says: "no adjustment possible". Exit at market at this point.
In effect you will be as far away from your protection stop value as possible at just the time when the trend is stopping making new ground into the profit side of the trend.
What you are always striving for is to stay away from your protection by trend progress. Go out when this progress stops and much before the protective stop would be reached.
Targets involve the myth of predicting. This flaw in your current paradigm, once removed gives you a chance to stay with any trend. You are missing an element that says when the trend is over. You can add that as above.
If your paradigm lacks the dynamic protection aspect, then it is not a possible thing to be using to make money, practically speaking.