volente_00
Registered: Nov 2002
Posts: 13711 |
11-17-11 02:40 AM
Quote from Buy1Sell2:
08-13-11 10:17 PM
Now, the example of the trader who is using a losing system:
Four ES Contracts 90% win ratio all in/all out versus
Four ES Contracts 90% win ratio scaling out at half target.
1 pt target 10 pt initial stop loss
1st example with 20 trades
18 winners for 1 X (4 contracts) = 72 pts ($3600)
2 losers for 10 X (4 contracts) = -80 pts (-$4000)
Net loss $-400
2nd example with 20 trades
18 winners for 1 X(2 Contracts)=36 pts ($1800)
18 winners for .5 X(2 Contracts)=18 pts ($900)
2 Losers for 10 X(4 Contracts) =-80 pts (-$4000)
Net loss $-1300
As you can see, even the trader who employs a losing system will lose less by not scaling out. --Ishmael
key word is TARGET
If the trader is like you with no definitive target then they will almost always be more profitable with a smoother equity curve by scaling out instead of giving profit back to the market and even letting big winners to into losers.
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