if one can predict market daily movement 55% correctly, how to profit from it ?

Discussion in 'Trading' started by jimshaw, Oct 4, 2010.

  1. MKTrader

    MKTrader

    Not enough information.

    What is "daily movement"? Breaking the prior day's high or low? Reaching a specific level? Closing higher or lower?

    For any of these situations, how much counter movement (i.e., stop loss) must you allow to achieve this 55% win rate? And how much of a profit are you trying to achieve?
     
    #11     Oct 4, 2010
  2. Corelio

    Corelio

    This is the only post that the OP needs to read. The rest is complete garbage.

    Seriously, complete garbage.
     
    #12     Oct 4, 2010
  3. Base hits.
     
    #13     Oct 4, 2010
  4. Where is the analysis of impact of drawdowns, variance reduction (central limit theorem), and probability of ruin? Analysis of average , and variables in it, is not enough and is actually a relatively trivial exercise.
     
    #14     Oct 4, 2010
  5. He must learn to walk before he flies. Anyway, please provide the analysis you suggested. I thought his problem was more fundamental than variance analysis.

    By the way, you think that analysis of averages is a trvial exercise but you be amazed how many are not aware of its consequences. Obviously, someone who comes along and asks "hi guys, I have a 55% win rate, how can I make money?" has some basic ground to cover.
     
    #15     Oct 4, 2010
  6. Intradaybill: I think you are knowledgeable, and I agree with what your wrote. I think I read a post where you may have wrote something like you are a hair dresser. If you are a meaning it in literal sense, that I think you are able to do more things than just hair dressing. If you however mean that you give people hair cuts in markets, then that is a different story. :)
     
    #16     Oct 4, 2010
  7. gtor514

    gtor514

    I believe the OP may have to consider the percentage of his account he plans to risk. With such a low W/L ratio, a large percentage of the losses up front will wipe out his account.

    Here's a screenshot of a Monte Carlo study that may demonstrate the importance of the Risk/Reward ratio and account risk with your Win ratio.

    Initial account Balance: $10,000
    Account risk per trade: 3.00%
    Risk/Reward ratio: 2:1
    Win/Loss: 51/49 =>55%wins
    No. of Trades: 250(1year of trading)
    Final account Balance: $398,104
    Note: no consideration of slippage, commisions, etc.
     
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    #17     Oct 4, 2010
  8. spindr0

    spindr0

    Trade anything that highly correlates with the SPY.
    Leveraged ETF's will give you more bang for the buck.
     
    #18     Oct 4, 2010
  9. spindr0

    spindr0

    It's as simple as that! You can do well with less than a 50% win ratio if your $ gain to loss ratio is good.
     
    #19     Oct 4, 2010
  10. charts

    charts

    Don't forget the size of winners vs. the size of losers ... :)
     
    #20     Oct 5, 2010