Which setups are more attractive?

[jack hershey]

Quote from elitetradesman:

Thanks. I liked the first setup as well, but just couldn't put my finger on it.

Try taking your finger off both of them.

Start over.

 

[baro-san]

Quote from elitetradesman:

Consider two hypothetical setups. One setup has a winning rate of 55% with a potential profit of $433 and a potential loss of $407. The other setup has a winning rate of 10%, a potential profit of $1000 and a potential loss of $50. Both have the same expectancy at $55.

Which setup do you find more attractive and why?

If you plan to bet you should also think in terms of Kelly formula, of maximum draw-down, of maximum bet.

If you consider betting on a black box trading system, or a back-tested trading system, you should consider the data you have as unreliable and not do it. You should trade only a system that makes sense to you.

 

[murray t turtle]

Quote from elitetradesman:

Consider two hypothetical setups. One setup has a winning rate of 55% with a potential profit of $433 and a potential loss of $407. The other setup has a winning rate of 10%, a potential profit of $1000 and a potential loss of $50. Both have the same expectancy at $55.

Which setup do you find more attractive and why?

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Elite T;
Frankly the first sounds like the worst set up i have seen all year;
really neither, but amoung the 2, the last one

Keep looking

 

[bone]

Quote from GoldenMember:

If both have equal positive expectancy, trade both setups.

You are a big swinging dick. Best post on Elite Trader for 2012.

 

[Newex]

Quote from elitetradesman:

Consider two hypothetical setups. One setup has a winning rate of 55% with a potential profit of $433 and a potential loss of $407. The other setup has a winning rate of 10%, a potential profit of $1000 and a potential loss of $50. Both have the same expectancy at $55.

Which setup do you find more attractive and why?

The 1st is like playing black and red on a roulette but by betting 407 you get 433 and not 407.

The other one seems very conservative and chances are that you will lose the 50$ thatn win the 1000$ .

On paper the 1st one gives the better return (better than a roulette anyway) but if i HAD to choose i would go for the 2nd one .

Losing 50$ is no big deal.

 

[Bry]

how about doing further research to determine if the second entry can be modified for greater odds; ie, maybe it works 22% better if taken only on Thursdays when the 33 EMA is up, etc.

 

[OddTrader]

Quote from elitetradesman:

Consider two hypothetical setups. One setup has a winning rate of 55% with a potential profit of $433 and a potential loss of $407. The other setup has a winning rate of 10%, a potential profit of $1000 and a potential loss of $50. Both have the same expectancy at $55.

Which setup do you find more attractive and why?

Perhaps reversing All the signals of the 10% win-rate set-up would give you a 90% win-rate set-up!

 

[chiefFLE]

setups with a higher % winrate are the most attractive, even if they have negative expectation over the long run. It is a psychological barrier to success. One of many.

 

[dolemitettu]

Quote from elitetradesman:

Consider two hypothetical setups. One setup has a winning rate of 55% with a potential profit of $433 and a potential loss of $407. The other setup has a winning rate of 10%, a potential profit of $1000 and a potential loss of $50. Both have the same expectancy at $55.

Which setup do you find more attractive and why?

The way I see it, it depends on the frequency of the setups. They have the same expectation, so jump on the one that you see most often.

 

[colonial dr]

Quote from jack hershey:

Try taking your finger off both of them.

Start over.

Where is your mansion located??