Listen to me well if you want to survive in this game trading prop accounts (from a guy who is one of the oldest trader @ TST and I barely make any trade in my funded accounts nowadays.) One way to stay profitable consistently is through momentum trading. There is little room for errors with this strategy which fits well with any combine. This strategy tends to produce 2nd leg or more and so, it gives you enough confident to make a trade. Another way is to trade large setups where you enter with small amount first (such as MES/MNQ) to test the water. Once all of your signals are on your side, you add lots heavily to your winning trades. With this strategy, you got to figure out how and when intraday trend will run out of steam. TF like 60 minutes chart often offers you a lot of clues. Lastly, you better use different accounts for each strategy. Trust me. If you mix them all up in one account, you'll never be able to make money in the long run if one strategy keeps pulling you back, similar to any sport game with one bad team member. That's all and good luck.
Just a little reminder … I don’t need a 10:1 Reward to risk to make it. 2:1 with ~50% probability is already degen returns.
I guess this is just a hypothetical result base on Holy Gril. I doubt anyone could get this kind of result in trading, maybe in a shortterm. but I think in the longrun, 1.5RR with 50%WR is more realistic and you already can make tons of money if a trader stick with it everyday.
Yes … A 2:1 @ 0.5 is 50% edge. A 3:2 @ 0.5 is 25% edge. Blackjack Card Counting is < 5% edge. Knowing what kind of edges exist out there should keep the trader humble If a card counter can build a fortune with less than 5% edge (Playing hundreds hands per day) then why couldn’t we build a fortune with more than that ? I think the average trader’s mentality is fcked up.
When we think about trading as collecting the edge ... Winning ... Losing ... It doesn't make a difference. The bets just need to be safe & sound. We can live from trading by collecting a mere 5% premium (after costs) per trade. That's (for example) a 2:1 Reward to risk with probability 7/20. It's going to be a lot of turnover compared to the profit, But if I can churn 10k per day ... I should collect 500$ at the end. Which is E(x) 10k at the end of the month But that's how the money is made ... Trading is a Business, isn't it ? I thought I had to be special but nope ... It doesn't make a damn if I can't predict with high accuracy. I just need to beat the implied odds by (at least ) a small percentage. Take 5 trades per day ... Risk 1%, Earn 2%. Lose 5% at worst. Win 10% at best.
Unless you are a professional (e.g. trading for an IB), like @poopy, @taowave, @newwurldmn, @sle, @Kevin Schmit... those are very very hard number to achieve. Most of us amateurs have unrealistic expectations. We expect we can make a living with $10K capital day trading ES futures. In my sim day trading study, I found a 5% trading edge (like blackjack) very difficult to achieve, let alone 25-50%. When I set up day trades to exit 2:1, win rate is usually << 50%. From my vintage point, sir, you are doing very well. Good luck, I am cheering for you to wow Topstep for us.
Hi Sekiyo, You need to be able to predict if you can't you're gonna have a high degree of getting eat up in chop. You can test out if you can predict or not by just guessing up or down at any given moment and see how many times you get it right.
I don’t need a crystal ball. The only thing I need is to beat the implied odds. That’s right … I need a feel for the current bias & variance, Otherwise I won’t be able to beat the implied odds. But the good news is … It’s simple ! Just go with the immediate trend ! The trend brings the Odds + Payoff in our favor. What I am trying to solve is … The fear of being wrong. I mean … once the bet is running, There’s nothing that should be done anymore. Price will tick up and down and I shouldn’t give a shit. I was trying to be right. I was trying to win. But that’s not how money is made consistently. Money is made by collecting the edge, Pick a direction, an entry and exits, Place the bet if it has an +EV, Then chill out & reiterate. Not all forecasters make money, Not all profitable traders are forecasters. Trading is collecting the edge from +EV Bets. There’s really no need to predict anything, Just to get a 60/40 feel for the next couples of points. No need to predict, or even fear, That the next bet is going to be a loser. Just collect the +EV (edge), win or lose. Now … What we can try is to get a feel for the edge (like card counters) and bet more when the edge is bigger but that’s not a prerequisite for long term success and can even lead to underperformance if the “feeling” is inaccurate. For example, counter trend trades (if ever taken) should be half the size of trend trades. It’s just a kelly optimization: Exposure should correlate the edge. Zero edge, zero exposure.