A Retail's Day Trading Experiment

Hey Ironchef; Your risk is minimal at these levels so it is time to take it live. Afterall it is all scalable so if you can make small profits consistently you can gradually turn it into large profits. I think I recall that you were live at some point even making a "big-mac" a day. Am I wrong on that?

 

I assume you had not include the trading commissions? I say its great if your cost of commission is under 1/3 of your profit.

 

Yes, I would quit, because it is a compounding fallacy.

 

True, for three months in 2023 I averaged a Big-Mac a day using $1K per trade.

Let me share with you what I do:

The basic premise is at entry, there are only two probabilities, it either goes up or goes down. If I randomly enter, the probability of being correct is 50/50. I ran tons of backtesting to prove it.

I stared at real time charts enough to know there are situations with > 50% statistical probability it will keep going up for a short period. I find those situation and get in.

The second trick is to get out before it reverses.

If my guess is wrong, I get out quickly, no lingering or hope for a reversal.

It is an extremely simple scheme, no indicators, no support/resistance, no BO, no let winners run....

But I cannot write an equation for the scheme and cannot prove it is correct.

It is also very time consuming, like a day job. I am really too old for that.

 

I quit because it is too much work, not a compounding fallacy.

 

I went live for three months in 2023, no commissions in the US.

 

you can try to work out the possible paths or use a binomial distribution

 

That's a good start, I'd roll with it if it's mechanical or at least 90% of it.

If it's purely subjective, watching some random lines that no two people can get exactly right, hell no.

 

If it works you do not need an equation to prove it. It sounds to me like you have a handle on it to make it as a scalper. You have proven to yourself that you can identify with greater than 50% chance that it will continue your direction for at least a brief period of time, you are going to take a profit and not try to let profits run, and you have the discipline to get out quickly if your direction is wrong.

 

Unfortunately it is not mechanical at all.

I cannot quantify it. The only non subjective part is probably the speed of the price movement???

I would be staring at price movements, for many many (a hundred?) ups and downs and maybe feel right once or twice and even then it is only 60% correct.