What is a "high probability, low risk" entry?

Quote from Ditch:

Here's an example of a breakout from a triangle, that was formed during lunch time. With setups like this you can achieve 80/20 W/L ratio. This is a very simple setup, of which many can be found. They're sitting right under your nose.
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Ditch - you mention with that setup you can achive a 80/20 win loss ratio - what does that mean?

Does it mean that in backtesting, 80 of 100 trades were winners?

Does it mean if I traded it tomorrow, 8 out my first 10 trades would be winners? Or does it mean that my first 200 trades of 1000 would be losers?
 
Quote from ig0r:



Yes, it is true that especially in swing trades with a good entry, they usually do come back (I swing trade and I see it happen all the time) but think about it in terms of profit over time; the longer you're in a losing trade, not only are you taking on a lot more risk then you need, but you end up take a very small reward (averaged over the length of the hold) because you ended up tieing up your capital for all that time
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Agreed. When evaluating a system I will generally take the average % divided by the number of days the trade is on. Doing such gives me an idea of the average percentage gained per day.
 
I like the answers so far so I'll be even more specific:

How can I find a method I can trade that will enable me to pull consistent profits out of the market?

Definitions:
Consistent profits - Average 5 ES points/day/contract. Daily win rate over 60-70%.
Method - Methodology, system or rules that define specific entries, sizing and exit points. Preference for visual/candles/support&resistance/volume. Low or negative preference for technical indicators (excluding possibly divergence trades on stoch, CCI, MACD, etc.)
"method I can trade" - Maximum risk <= 2 ES points/trade (tighter = better). Win ratio > 40-45%. Generates 3-20 trades/day. Timeframe: 3-5 minute chart. Enables possibility for ocassional "homerun" trades. (I tend to like to hold... too long sometimes). Exit rules are chart based (eg. SAR/trendline break, etc.) No trailing stop. Breakeven stop should be chart based not a money stop. Targets are tough for me to keep. (although I'm willing to change my psychology on that one if need be)

A turnkey methodology would be great. Just kidding. How do I go about finding the above? And is the above possible? Possible to find? (not theoretically. Realistically.) How?
 
Quote from FireWalker:

I like the answers so far so I'll be even more specific:

How can I find a method I can trade that will enable me to pull consistent profits out of the market?

Definitions:
Consistent profits - Average 5 ES points/day/contract. Daily win rate over 60-70%.
Method - Methodology, system or rules that define specific entries, sizing and exit points. Preference for visual/candles/support&resistance/volume. Low or negative preference for technical indicators (excluding possibly divergence trades on stoch, CCI, MACD, etc.)
"method I can trade" - Maximum risk <= 2 ES points/trade (tighter = better). Win ratio > 40-45%. Generates 3-20 trades/day. Timeframe: 3-5 minute chart. Enables possibility for ocassional "homerun" trades. (I tend to like to hold... too long sometimes). Exit rules are chart based (eg. SAR/trendline break, etc.) No trailing stop. Breakeven stop should be chart based not a money stop. Targets are tough for me to keep. (although I'm willing to change my psychology on that one if need be)

A turnkey methodology would be great. Just kidding. How do I go about finding the above? And is the above possible? Possible to find? (not theoretically. Realistically.) How?
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Your problem is not the method, but the trader.
 
FireWalker, you may find someone here kind enough to take you by the hand and provide you with all this information, but more likely you'll be told to do a Search and look up the information yourself.

Everything you want to know is right here. You just have to want it bad enough to look for it. Once you have enough to start with, begin a Journal and you'll receive even more help, if you're serious about improving. Otherwise . . .
 
Quote from dbphoenix:

FireWalker, you may find someone here kind enough to take you by the hand and provide you with all this information, but more likely you'll be told to do a Search and look up the information yourself.

Everything you want to know is right here. You just have to want it bad enough to look for it. Once you have enough to start with, begin a Journal and you'll receive even more help, if you're serious about improving. Otherwise . . .
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Not asking to be taken by the hand. More asking for pointers to methods that would qualify.
 
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