OKay then, does anyone have any resources for risk management. Books, internet references, specific plans For me, I like to program my trades around specific risk/reward targets. My primary target is 5:1 risk/reward. If that doesn't work out I am looking to cash in at 3:1. I consider anything less to be a net loser, because I know that I can't overcome expenses without getting at least that much return. On top of that I "know" from my testing that I can expect to win X% of the time and my trade history suggests that I will see "runs" of x consecutive trade wins and X consecutive trade losses. I watch these stats close. If things get out of whack, I can get "advance warning" by simply checking out the numbers of consecutive wins or losses. Also if I think my edge is changing, I can go back and check the price action against my strategy. I ask myself some important questions. 1. Is my strategy catching all the behaviors that is was meant to, or is it missing some of them. 2. Once I have a signal to trade, is the position following through like I expect, or is that changing (the nature of the edge). I use Excel to answer these questions. I export the data into Excel and do an analysis each night. So folks, what do you do. Something like me or way different? Hey no pressure, comment or not. Steve By the way Emsj, I dont remember calling you an idiot. I will check my posts and get back to you. Edit: Okay, I checked. No "idiots" in my posts. I'm good if you are.
over the last 2.5 years I have a 60/20/20% win/lose/scratch ratio. because of that i put on every single trade possible where i think i have even the slightest edge. i look to make 1-3 ticks per trade and therefore only take 1-3 tick losers. i have a set max daily loss limit that if i hit i am done for the day. I consider this to be all the RM i need and if you think otherwise i would love to hear so...
and also, im not trying to pick a fight with you. im just trying to "argue constructively" for the possible benefit of others...
As to your question I have no idea. But I know how to find out. You just model your system using Excel. You enter your average number of trades, winners and losers over a statistically significant amount of data, and then play "what if" What if you took only 2 tick losers max What if you could characterize your trades by time of day or type of signal? Taking only specific trades (instead of taking every trade). What if you held your winners for 1 more tick. How many of them would you get to keep. How many would turn to net losers? These are the kinds of stats that you can model with Excel and that might help you increase your profits/decrease your losers.
Steve, I'm sure if I was flailing around like a fish out of water I wouldn't be thinking I was the "best" in anything. a) Either I am a psycho like you and like to make up and lie about all my trades and myself, OR b) I really think I am the best because I have the experience and the trades to back up my thoughts and ideas. <b> WHILE posting many profitable real time trades in my journal and on this board before closing it with a blast looking like the money I am. </b> Most of all, does it really matter? You may notice a money man like myself will never care if what you say is false or ask for proof because I don't care really. You on the other hand tsk tsk tsk, weak man. Its ok to be be jealous old man. Its ok, You can cry on my shoulders. Just don't burn down my computer because I took your red stapler. ---- I will comment on risk management later. Seems like steve46 thinks he's plan is the best when its at best just nerdlike. Time to pick up tradestation old man, excell lol , get with the program its year 2005, not 1956. I backtest all my setups for statistics taking me 30 minutes for each setup/idea. You on the other hand are still sketching it out with a wooden stick on sand.
Your command of the language gets a little shaky when you are angry. Perhaps you should take a moment to compose yourself. I can't for the life of me make out what you are saying there at the end... but you do have a talent for comedy. I can really appreciate that. By the way, do you have anything of substance to say about risk management? You ARE the best aren't you. The "King" of risk management Steve
CoolWhip has become the human pinata around here. He is the "best" in his own mind simply due to the fact that he has no real contact with any other traders. The fact that he was "s*** canned" to the tune of 46-9 on a poll about whether he was a schmuck or not did not seem to dent this pathology of his. Carry on Steve, let the young lad have a taste of reality.
The most successful and smartest people never have to announce how good they are. They're content just to let it be. Small men, small dogs, bark lots, no bite. Get kicked around lots.
Well JB I appreciate that characterization. I do want to emphasize that there is a reality that we have to get tuned to, or we end up broke. The market decides. It took me a long time. Apparently I was a slow learner.
plugger, I'm glad you are hiding down in your moms basement being all humble and all. You are the best role model for all the dorks out there in the world. CONGRATULATIONS! I want to be just like you.