on SWM he was down ~15K which was maybe -5% from where he entered. SWM could have gone down >50%, which is known to have happened to various stocks. Since presumably there were no stops in place, the risk was ~50% or more. So lescor was prepared to take 150K dive I presume. The reward was ~1% I assume. You can estimate R:R from this to be on the order of 50:1.
I'm sorry, but it's crazy to risk 50 ticks to make 1 tick, especially with rtm type strategy (unless I misunderstood your point)... this is a certain path to financial ruin...
Hi, this is a great thread, and don't get me wrong the OP is great, but some of you are putting him at god-like ability. I've worked at different prop firms and after reading this thread I didn't learn anything. It's pretty obvious what his strategies are, but I will not discuss them openly. If your interested in what his strategies are PM ME.
DeltaSpread, thanks for your post. I appreciate hearing that and am glad you've gotten something out of this thread. Regarding risk:reward, again, you guys have to remember that I am trading multiple different strategies all with different stats and time frames. I can't answer a question about what I look for "in a trade" without breaking things down per strategy. Yes, I could go through my stats and calculate the r:r by looking at all the winners and losers. But then I'd have a number that I wouldn't do anything with. It might be interesting to know but wouldn't change the way I trade. Your 50:1 SWM example is ludicrous.
Yeah, these all seem like reasonable assumptions to me. Perfectly logical.... The insanity in this place never ceases to amaze me.
why is that? would not you lose 150K if it dropped 50%? if your target was let's say 5%, it is still 10:1 R:R for this trade. this is just the reality of trading without stops.
So if you trade ANY stock overnight, knowing a stock could go down 50% overnight (and your stops will be useless) that means you also have a 10:1 or 50:1 r:r? What about probabilities?
i understand what you are saying. there are different R:Rs. there is R:R for a given trade which could be extremely good or bad and there is cumulative R:R that covers many trades. yes, if lescor averages all his trades for the last several years (max drawdowns, profits, losses) he will have a cumulative R:R which is much better than 10:1. but the outlier trades have to be focused on for the worst case scenario. an RTM trader can blow up with just one or several outliers in a row. in my example, lescor would have certainly be able to stomach 150K=3-4month profits.
Excellent thread... just read again from the start. Can you tell me; what is your long vs. short ratio? How do you maintain (do you maintain) a market-neutral mindset? I found this past week that my personnal (market-short) bias materially handicapped me. The previous week it served me well. This weekend I'm trying to return to a more neutral stance... try and and "get back in the zone". Any "tricks" for getting your psychology back on track after leaving the zone? Cheers, Joe