%% Classic definition, risk $500+ make $2,000= 4 R. RE investing 10% down $500 on $50,000+ service businesses could do better average . Maybe not per month\ average market time for RE in the 20 years I did it was longer than one month; it was 3-6 months. IF some had asked me ''can I make a million buck$ selling pet rocks?? LOL I dont know that also Took more than months to do it.
The 3 R profit can be from any systems with positive expectancy for example 50 % WR with 1:2 RR 6 trades per mo or 66.66 percent WR 9 trades per mo . Result net profit 3 R per mo
Ok, thx, will need to setup and run a MC sim to replicate/verify/confirm it. How do you do get your above results? Pure maths or MC sim? Looks much like the Kelly formula, isn't it?
Hmm. that's indeed interesting if it can independently be replicated. I just tried the Kelly formula, but am getting unsatisfactory results, but maybe I did something wrong. Will report back later... The characteristic Kelly curve, here for other parameters:
This thread reflects the riddle as to why a trader using a strategy with only modestly strong metrics does not do better. A strategy like this should not be as rare as unicorns - 55% WR 2% risk per trade 1:1.5 r:r 1 trade per day
%% NO wonder ,that's a gambling measure; not saying it's totally useless LOL. I use something i gambled with, as pool hall teen. If you think business is the same as gambling/ try winning in Vegas + see how far you DONT get, not funny. As far as 4% risk, seems excessive ; but 4%may not be enough on 1 of 7 or 8 positions. IBD uses 7-8% but thats on one position. Its not really a coinflip also, not near that simple. One of the better book quotes /UNKOWN Market.....Jack Schwager \ ''the market is not an annuity'' But sometime it pays better than annuity. No wonder annuities pay so regular \ its so little % paid