Failure to understand risk/reward and why you're losing as a trader.

Discussion in 'Trading' started by Laissez Faire, Jan 9, 2025.

  1. ironchef

    ironchef

    Depending on relativity, your trade relative to the market size.

    But that is just my opinion, not based on my results.

    Can't argue with that. Would you believe, in one of my live trading days recently, as an experiment, I made 56 trades, 30 wins but profit was only slightly above daily average!

    Great post. Appreciate your perspectives.

    Final point, I believe @volpri's method (reward:risk < 1) works because I am using it now to trade live. The devil is in the details.
     
    Last edited: Jan 24, 2025
    #331     Jan 24, 2025
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  2. ironchef

    ironchef

    Let me show you folks the results of 2 years of realtime paper trades, using 2 different methodology, each consists of about 120 days of paper day trades. Here are the two different approaches:

    1. Applying the "best practices" of what conventional wisdoms espoused: High R:R (reward:risk) ~5:1; tight SL; let profits run...

    2. Applying the "@volpri" approach: Low R:R ~1:3; wide SL (relative to R:R); grab quick profits...

    Here is a quick summary

    upload_2025-1-25_4-58-48.png

    upload_2025-1-25_4-59-30.png

    The 2 consecutive losing months was why I quit that method, even though the profit is ~5.5x (w/o the two, >8x) of @volpri, I terminated the paper trades and moved over to trade @volpri's approach.

    I never found out why two losing months (the method did not change).

    You decide.

    Caution: Doesn't prove anything, just two small sample tests
     
    #332     Jan 25, 2025
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  3. Sekiyo

    Sekiyo

    I want to be an EliteAnalyst.

    What are the current trends ? What's the news ? Does it reinforce or weaken the trend ?
    What are the consequences ? Time and cross-sectional ?

    Go with the flow. Think one move ahead.
    Put the odds in my favor.
     
    #333     Jan 25, 2025
    ironchef likes this.
  4. ironchef

    ironchef

    I am slow, I think one move behind. :(:(:(:(

    A turtle. :p
     
    #334     Jan 25, 2025
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  5. Sekiyo

    Sekiyo

    Remember, the turtle wins !

    ChatGPT can help thinking ahead :D
    That's not sexy but the goal is to make money.

    I mean .. That's what it is made for.
    Aggregate all the noise and extract meaning.
     
    Last edited: Jan 25, 2025
    #335     Jan 25, 2025
    ironchef likes this.
  6. ironchef

    ironchef

    How?
     
    #336     Jan 25, 2025
  7. ironchef

    ironchef

    I think you suffered from mistaken identity.

    This turtle is not the Market Wizards' Turtles nor @murray t turtle. :D
     
    #337     Jan 25, 2025
  8. volpri

    volpri

    Who is StevenH? Does he have a journal?
     
    #338     Jan 25, 2025
  9. ironchef

    ironchef

    #339     Jan 26, 2025
    traderen and HawaiianIceberg like this.
  10. volpri

    volpri

    #340     Jan 26, 2025