what is the maximum mathematically possible daily profit

Pelt said:
Would it be beneficial to think of Risk in terms of what it takes to deplete/ruin your account, and equate that to price movement... instead of thinking of risk per trade? ;)
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What you ask are not two different things.

The risk per trade depends on loss per trade AND number of consecutive losses.
So risk per trade is not just how much can I afford to lose per trade.
Risk per trade is how much can I afford to lose per trade taken in account that backtesting showed me also a drawdown of XX% caused by consecutive losses.

So the two elements that you see as seperate are not seperate but connected with each other.
The consecutive losses (drawdown) should be taken in account when defining the risk per trade.
 
The paradigm of risk-per-trade is just that. It is the amount of money you can lose on any ONE trade. It seems this is the simplest definition that does not require any info on backtesting, drawdown, or anything else. We are talking about the risk YOU have decided to take on for any ONE trade.

You can decide right now, to risk $100 on a trade(assuming you have the granularity in sizing), and that decision is completely independent of everything else.

What I am asking... is there any utility to thinking about your risk in a way that is not simply looking at any ONE trade?
 
Pelt said:
What I am asking... is there any utility to thinking about your risk in a way that is not simply looking at any ONE trade?
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I just explained that, do not simply looking at any ONE trade.
I did not simply look at any ONE trade. I looked at many and added another way to watch at risk.
:confused:
 
virtusa said:
I just explained that, do not simply looking at any ONE trade.
I did not simply look at any ONE trade. I looked at many and added another way to watch at risk.
:confused:
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Fair enough... consider your multiple trades in your scenario, what do you do when you get into DD. What do you do to your size and how do you do it?
 
Pelt said:
Fair enough... consider your multiple trades in your scenario, what do you do when you get into DD. What do you do to your size and how do you do it?
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After ONE losing trade that is stopped out (so not a losing trade because I stepped out before the stop), I keep the same size for the next trade. I cannot have a margin call because my leverage is not used at the maximum. This means that I recover on the same size as I lost.

After a (consecutive) SECOND losing trade that is stopped out, I still keep the same size for the next trade too, I cannot have a margin call because my leverage is not used at the maximum. This means that I recover on the same size as I lost. The system I trade for this trade is different from the system I trade usual.

Normally I go for bigger moves (10-20 points ES). The system for the THIRD trade has a closer stop and will take smaller profits with a much higher winning rate. So the risk is reduced but the profits too. The only aim is to recover as fast as possible the consecutive losses.

If I am stopped out two times in a row,which will make me lose 10-12 points ES, I need in general 2-3 shorter trades to recover the drawdown. All this is mostly fixed within the same trading day. Depends a bit on the volatility of the market.
 
So fixed initially, with a reduction in targets afterwards(probably with an increase in frequency).

Any opinions from others on a sizing schedule? Only 3 things one can do it seems... either you maintain it, increase it or lower it.

Or have some combination of the 3.
 
Its like theres an invisible effort threshold that most refuse to cross because they subscribe to the sunk cost fallacy. Im more into long term projects and trust my ability to accurately analyze progress along the way. Fear of wasting time ironically makes you waste time. In a creative context, fear of missing out is the way to go. In other words, perceived low risk is actually risky and what you thought was high risk is actually a safer way. The optimal solution is counter intuitive.

We do not have to agree but the great thing about trading is that system performance is objective. Pelt is hinting at a path to a higher performing system, but you guys continue acting as if you know better when the math proves otherwise. Saying the variables are infinite is a lazy excuse to do nothing and stay within your comforts. Connecting with people like Pelt is the only reason im even on here. Once i find the talent i seek, i will disappear and you guys will regain control of the narrative and continue reinforcing a limited vision. My team says thank you for surrendering a larger portion of the liquidity to us.

I used to suffer from laziness and boredom in my teens, it was a miserable time. I hope anyone still experiencing a lack of purpose finds their why. Begin tapping into the stored capacity of the human mind. Try to revolutionize your understanding, you may surprise yourself and feel much better overall.

Start by saying maybe im wrong, let me explore these radical ideas. Or dont and let us have all the fun.
 
Pelt said:
Only 3 things one can do it seems... either you maintain it, increase it or lower it.
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No, you clearly did not fully understand what I posted.

You can change size, but that will not always help you to fix the problem. Changing the size is just damage control as you will trade exactly the same signals as you did before. You will have the same problem with profitability, but only lose less. Most of the time size is not the problem, but the trading system is.

I switch my trading system because different marketconditions can require different approaches.
In a non trending market, a non trending system works better than a trending one. Or you should have a self adapting system. You need to know what the market offers you and adapt to that. Changing size will not help you in that case. Switching your trading system might.

Do you always drive your car in the same gear? Or do you switch gears depending on the road?

Do you only use one screwdriver to fix any screws? Or does the screwdriver you use depend on the size of the screw?
 
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