Registered: Apr 2007
08-08-10 07:40 PM
I have been toying around with my system which is largely trend following. My accuracy to t1 is in region of 48-57% depending on some factors for my main setup. For the same setup the accuracy to t1 is 23-25%.
In the past, I have let all my plays run to t2, but now I started to re-examine this and think in terms of profit factor. Sometimes the r/r for t2 is much greater than for t1 but sometimes it isn't THAT much greater.
Now, I do sometimes have t3s that are very big lotto plays, but their accuracy is even lower (~15%).
Recently I started to play around with the idea that my profit factor to t1 should be 2 but to t2 should perhaps be 3 if I wish to carry a large portion of position past t1. This is due to a psychological preference for accuracy, I am putting a premium on taking a lower accuracy play. And to take a play I must either have profit factor 2 to t1 or 3 to t2.
Anybody who approaches the market for exits in a scaleout methodology have any input on this?
My r/r to t1 is anywhere from 1:1-3 r/r on average and to t2 is usually from 1:3 --> 1:10 depending on the price action (not sure what the mean is).