Registered: Aug 2007
04-15-12 04:54 AM
Quote from indextrader7:
Hey, thanks for the post and sharing your ideas!
I'm pretty sure...High winning percentage = low losing percentage. Same thing right?
When you speak of..."Average down on each level" Are you talking about doubling down on losing positions? The only time I do this is when I'm trading bad, and when I do it, I consider it a major trading mistake for me. Too risky imho. There will be times, for certain, where the market does not come back to breakeven on the original entry, and you can get burned. Even if your losing percentage is only 0.000001%
I'm not consistent in my position sizes, so my trading stats would be flawed (from a pure trading perspective) if I mainly looked at dollars (versus ticks/points). I monitor dollar p/l of course, but the significance is that it is not MY FOCUS. How good would a doctor be if his main focus through the day was on dollars, an attorney, any professional? I feel a strong need to focus on PROCESS, and to me ticks are much more pure and the same for everyone, than dollars are.
I've had a few days over the past two months where I've made really good profits for the day...that is looking at dollars. BUT if I look at how many ticks I took from the market that day, it's pretty bad (or even negative!) This usually means those "nice" dollar returns I made for the day, turn out to be very poor on a risk-adjusted basis.
My main daily measure of performance is what I call daily PMR. That is Profits to Max Risk. (Daily P/L compared to the largest risk I took that day) If this PMR isn't greater than 1, I'm not happy with my performance.
Just the way I think about things. Thanks again for sharing!
This past week I had 27.9% one tick winners, 65.2% of 2-12 tick winners and 6.9% losers from 1-6 ticks. Even though I had many one tick trades, cause of the averaging down, this becomes huge profitable trades over all.
I don't double up as you think but if I went long 20 @ 1372.50, 20 @ 1372.25, 20 @ 1372.00 etc to a total of 13 levels, this including original signal entry, and exited all at or within one tick of plus one tick of original which would be 1372.75, it is good money trade on a one tick trade. Had one trade this past week where I got out of last position placed of 12 ticks.
Now of course, there are times when I lose AND it is first thing in morning and have not reach my daily goal of 2-4.00pts on ES based on one lots, volume I trade will be staggering loss, but always made up in a few days if it is just one loss. The only reason I can trade this way is cause of all the backtesting of ten years and trading of two years, knowing inside and out what the method performs as far as drawdowns, losses in a row and my emotional state of mind. All the losses I had this week were due to reverses, so losses were minimal. And after I reach my daily goal, I cut back size 80%. The hours I normally trade are first 30 minutes of day session and last two hours, and testing based on this shows only three losses in a row max, so to a degree, on third trade, I do double up size on each level, but never more than that.
I concentrate on dollars but always based on one lot on the original entry signal, the add-ons stats are seperate and monitored weekly.
I don't use protective stops at all, my testing of ES has proven to me for the way I trade, not to use them. I don't alter contract size, it is always the same till I reach my goal and always the same after. Has nothing to do with acct equity, more like how much I can stomach.
I know I can get more bang for the buck in Crude oil, but I am married to the ES as all my experience since 1985 is in this market starting with full contract of S&P500. I have been on wrong side of HFT in Crude oil and my heart skips beats, LOL.
I think those who can trade Russell well probably could trade Crude oil well as they seem to have same movements, but Crude oil has much more truer sense of Support/resistance at horizontal levels and less of angled trendlines on 60 minute charts of both of 24 hour and day session, also much less of retracements back to a trendline on five minute charts, punches thru and doesn't come back, whereas ES is a sloppy market and is much more easier to get out of a trade that stagnates.