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Rohok
Registered: Dec 2009
Posts: 24 |
12-09-09 04:36 AM
Quote from Lawrence Chan:
JSS illustrated another way to do it.
With low winning %, you can go for very high reward for the winners. so at less than 50% winning, if the model can produce 15+ pts on some of the winners consistently and losing only max 5 pts on the losers, that will work well too.
In fact, I prefer this method over high % winning because the dependency on an edge in entry is reduced.
But that requires a bigger bank roll to start with.
e.g. 5 pts x 30 = 7500 to start
Isn't this the double edge sword we all live under? The difficulty of "letting your profits run"?
Even if you could go 15 up to 5 down, how would you be able to manage stops to catch a 15 point run without being stopped?
Maybe you could have some type of stepped profit taking executions followed by instant new orders to ensure you are catching the move without risking downside or loss of time.
Still pretty hard.
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JSSPMK
Registered: Feb 2007
Posts: 6796 |
12-09-09 09:04 AM
Quote from Rohok:
Isn't this the double edge sword we all live under? The difficulty of "letting your profits run"?
Even if you could go 15 up to 5 down, how would you be able to manage stops to catch a 15 point run without being stopped?
Maybe you could have some type of stepped profit taking executions followed by instant new orders to ensure you are catching the move without risking downside or loss of time.
Still pretty hard.
That is the hardest part in trading & is based on faith. Problem comes from fear of a loss. That's why sim trading is easy, whereas pro trading is not. So it is faith vs fear of a loss. So you have to analyse why is sim easier than pro. No real fear of a loss vs real fear of a loss. The conclusion is to reduce real size to an amount that fear of a loss does not interfere with faith in a backtested method. Yes that might make trading awfully sluggish as far as equity curve is concerned, but you will come out as a winner. Alternatively, you have to find a high win rate system which matches Blackjack's payouts 
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Emini Maestro
Registered: Oct 2009
Posts: 255 |
01-12-10 03:48 PM
Sorry gentlemen, and the rest of you, I mistook Elite Trader to be a place where successful traders assembled online. It is not, and I will waste no more time here. If I wanted negativity as the norm in the people I associate with, I would visit my local homeless shelter. This place is death.
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LeeD
Registered: Feb 2008
Posts: 1765 |
01-12-10 04:54 PM
Quote from Emini Maestro:
Sorry gentlemen, and the rest of you, I mistook Elite Trader to be a place where successful traders assembled online.
It's also a Web-site for aspiring traders and people for whome trading is a hobby.
Quote from Emini Maestro:
If I wanted negativity as the norm in the people I associate with, I would visit my local homeless shelter. This place is death.
Don't let the minority who make sure to vocally doubt and smear every reasonable thing they read distract you from this journal.
Don't feed the troll
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LeeD
Registered: Feb 2008
Posts: 1765 |
01-12-10 05:04 PM
Quote from Lawrence Chan:
p.s. taking 5k to 1 mil is not that difficult. taking 1.5k to 1 mil is. and he is now 4k strong =)
Why is $5k such a magic number? Is it somehow based on the probability of a "blow-out" while trading a single contract?
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