How much would you risk on a GOOD trade?

Yes, you're right. There's an error, most likely with the counting of the 1-run whipsaws between heads and tails... That's what 15 min gets you - close, but not close enough...

 

Double-checked - no error.

If you multiply the run * total, and then add all of them together, you get the correct number of tosses...

That is, if I have a run of 7, you don't increment the run totals for 1, 2, 3, 4, 5, 6, and 7. You just increment 7.

 

Finally some sensible comment on ET….....

Average monthly profit makes a lot of sense. I also agree with your statement that wall street would “clean up” a good setup. That’s part of the concern that you would have when you find a good setup, it will not last long.. so whatever you are in early that’s where you will mostly make the money..

 

Go it ... thanks.

 

It depends on the liquidity of the instrument. Assuming liquidity is not an issue, the bet should anywhere from 1/10 to 1/2 of the Kelly Criterion. However there are psychological considerations, if the trader is very active, that might lead to lower bet sizes

 

Three Times the risk i normaly would

 

Depends on how much money u have made so far....if you are up 20-30% for the year, might risk 10%.

See Druckenmiller interview in market wizards

 

High probability trades are a figment of a trader's imagination



But.., for arguments sake - let's say I believed a high probability trade existed... say it 95%... even 99%

I still need to manage the 5% to 1 % probability it'll fail

So what have I gained - not 1 damn thing - it could still fail....

At best - I've only lulled myself into a false sense of some sort of security - that flat out does not exist

Pfffttt

Mkt is uncertain - adapt

or not

RN

 

As long as you don't risk enough to severely damage your account it doesn't matter.
You risk a little; it's safer, but you don't make as much.
You risk a lot; it's not as safe, but you make more.
It all works itself out over time the more trades you make.

 

Not true...there have been a number of times when there was almost a no brainer trade.

The following come to mind:

2009, fed announces qe, stocks begin bull market

1994 when Greenspan unexpectedly raised rates, fairly obvious that bonds and stocks would go down heavy.

1992, Soros bet 10% of his fund that sterling would be forced out of the ERM.