What's a worthwhile daily take on the e-mini S&P 500?

NoahA said:
This is where you are wrong. You had a good streak you say of 16 profitable days, but how many trades were profitable? With a 50% win rate, which can be a very nice edge, you are pretty much guaranteed to get either 6 wins or 6 losses in a row. In fact, it goes as high as easily 8 or 9 when you run simulations. Bump up the win rate to 70%, and even then 4 or 5 losses in a row are well within statistical expectations over a couple of hundred trades.

So if you're stopping after 3, you're literally messing with a system that may not be broken. You say you will know what the issue is, but you really won't if you think you are doing something wrong after 3 trades. Heck, maybe you are, but 3 trades doesn't prove anything. What you will be doing wrong is actually stopping.

Look at this thread here. The poster showed how his system behaved during a period of time that covered the crisis in 2007. Yes, this is just a simulation, but what looks to be a nice equity curve actually contains many periods of sideways action.

https://www.elitetrader.com/et/thre...e-it-25k-to-trade.340739/page-21#post-5217546

When we zoom into a certain section, we see this.

View attachment 240724
From maybe trade 630 roughly to about trade 650, its way more losses than gains. The entire equity curve looks beautiful, but there are literally 20 trades that were losses or just a few tiny gains, followed by just sideways action for another 20 trades or so.

This is what I'm saying you need to prepare for. Risking 2-3% per trade sounds nice, but you will not be performing in any good condition to put on the next trade after losing 20%. To stop after 3 losses is so random, and yet to take 10 losses will cripple you with such high leverage.

I'm not saying a seasoned trader couldn't trade a 5k account with risking $150 per trade, but you're not a seasoned trader, and you already admitted to some trades just turning into scalps. After a few losses, you will start doing all sorts of crazy stuff and just playing it defensively, and this will mean there will be very few profits to overcome the trades that lose.
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Hello NoahA,

Lets get it ready to kick so ES or MES ass tomorrow and have some fun and make some money man.
 
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Wonder how China will react to all this crazy when they finally re-open. Anyone notice they have been closed since Thursday, for "National Day"? They re-open on Tuesday night I believe.

Those Chinese, with their silly week-long celebrations of a day.
 
NoahA said:
So if you're stopping after 3, you're literally messing with a system that may not be broken.
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I could be misunderstanding what you are saying. Stopping trading for the day has no bearing on his sample size as long as he continues to take his setups no matter what. There isnt anything saying you have to take x amount of trades a day. But there is a rule that you are obligated to take all your setup trades regardless of how you feel - when you are actually in front of a screen trading. That is how a sample size and probabilistic edge works.

If I have a weighted coin on heads and I flip it a random amount of times per day that doesnt change the outcome after 100 flips. Whether i flip is 3 times today. 50 times tomorrow - it doesnt matter.

However, going from $150 loss down to a $50 loss is not messing with a system that isnt broken. ITs reducing position size

As long as he is following his system flawlessly (which is the goal here) reducing position size has nothing to do with his probabilistic edge on which way the market could move.
 
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NoahA said:
This is where you are wrong. You had a good streak you say of 16 profitable days, but how many trades were profitable? With a 50% win rate, which can be a very nice edge, you are pretty much guaranteed to get either 6 wins or 6 losses in a row. In fact, it goes as high as easily 8 or 9 when you run simulations. Bump up the win rate to 70%, and even then 4 or 5 losses in a row are well within statistical expectations over a couple of hundred trades.

So if you're stopping after 3, you're literally messing with a system that may not be broken. You say you will know what the issue is, but you really won't if you think you are doing something wrong after 3 trades. Heck, maybe you are, but 3 trades doesn't prove anything. What you will be doing wrong is actually stopping.

Look at this thread here. The poster showed how his system behaved during a period of time that covered the crisis in 2007. Yes, this is just a simulation, but what looks to be a nice equity curve actually contains many periods of sideways action.

https://www.elitetrader.com/et/thre...e-it-25k-to-trade.340739/page-21#post-5217546

When we zoom into a certain section, we see this.

View attachment 240724
From maybe trade 630 roughly to about trade 650, its way more losses than gains. The entire equity curve looks beautiful, but there are literally 20 trades that were losses or just a few tiny gains, followed by just sideways action for another 20 trades or so.

This is what I'm saying you need to prepare for. Risking 2-3% per trade sounds nice, but you will not be performing in any good condition to put on the next trade after losing 20%. To stop after 3 losses is so random, and yet to take 10 losses will cripple you with such high leverage.

I'm not saying a seasoned trader couldn't trade a 5k account with risking $150 per trade, but you're not a seasoned trader, and you already admitted to some trades just turning into scalps. After a few losses, you will start doing all sorts of crazy stuff and just playing it defensively, and this will mean there will be very few profits to overcome the trades that lose.
More...

NoahA,

If I lose 3 trades in a roll, I am stop trading for the day. I don't not care about what my previous historical record shows. I care about protecting my capital or mental and having a good day and night and good night sleep. I will never continue trading after losing 3 in a roll. However, I may continue to trade and just reduce position size. For example, reduce to risk per trade from 3% to 1%. That sounds more logical and practical then just stop trading for the day.

I am not afraid to lose $150 on a trade. I am risking 3% of my capital.
 
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