Van K. Tharp's Random Entry System

Quote from spyderman:



Far as 50% winners are concerned, If you make twice on those winners as lose you are ahead of the game. As a matter of fact, the best traders I know are only right 50% or less of the time, but they are quick quick quick to stop out of losses and they really press the winners.
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All this sounds good in theory, but anyone putting it into practice is asking for trouble. Unless, of course, he increases his size after every loss and prays real hard.
 
Quote from spyderman:

i should clarify...these are discretionary traders...not "system" just lightning fast and don't freeze up with losers.....
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Doesn't matter. If there's no regard for system or entry, you have to increase your size in order to work yourself out of the hole.
 
I understand most traders would do that....these did not.....the fact that they were able to pull the trigger so fast accounted for the 50-50 win loss rate.....the fact that they could identify a powerful trend EARLY....and PRESS it for the majority of the move made them their money.

I AM NOT RECOMMENDING IT....but I also know alot of traders who have a 75 to 80% win rate to be losers....

just making a comment :)
 
Quote from spyderman:

I understand most traders would do that....these did not.....the fact that they were able to pull the trigger so fast accounted for the 50-50 win loss rate.....the fact that they could identify a powerful trend EARLY....and PRESS it for the majority of the move made them their money.
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However, if whatever they're doing hinges upon the identification of a "powerful trend", then they're not making random entries.
 
Actually the key is position sizing.....also an area of interest to Tharp.....these great traders that I am talking about...they know how to leg in with greater size in the winners.....also the losers tell them something.....they are messingers, loss leaders, ammunition in the war.
 
Quote from spyderman:

Actually the key is position sizing.....also an area of interest to Tharp.....these great traders that I am talking about...they know how to leg in with greater size in the winners.....also the losers tell them something.....they are messingers, loss leaders, ammunition in the war.
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The problem is that you don't know whether or not they're winners when you enter the trade. And without some sort of strategy that has a probability of a greater number of winning trades than losing trades, you will sink further and further into the hole.
 
db come on you cant argue this stuff. there's profitable traders with win % > 50 and profitable traders with win % <= 50. It's like Walther arguing there's no MA crossover system that shows a profit.
 
I appreciate what you are saying...but I am talking about traders who operate on a different level. They have respect for and know how to leg into size......a loss on 200shares might tell them to go the other way with 1000sh.. Great treaders learn to interpret market action by how there "marker positions" react...I am talking about guys who use 200 shares to "feel" the market and then leg into 5 or 10k shares.....the P&L tells them what is hot and what is not......
 
Quote from traderkay:

db come on you cant argue this stuff. there's profitable traders with win % > 50 and profitable traders with win % <= 50.
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I'm sure there are. But they aren't doing it with random entry and they aren't doing it by betting the same percentage of their equity on each trade.
 
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