By the way ... Achieving 2 to 3 odds (60% win) with 2 to 1 setups (2Reward for 1Risk) is an advantage of 26%. Therefore you could safely bet 13% (Half Kelly) of your bankroll. But let's say you're conservative and bet only 5%. It's 4% Expected Gain per Trade. Anyone would kill for that kind of edge. I donno who's dreaming... Edit : My empirical stats tell me I have 0.5 RR and 80%++ win (20% Advantage) which is 1% Expected Gain per Trade (5% Risk). In the end you're better than me (And I've been conservative) but I am the one that's dreaming.
Nonsense is very subjective in trading. I've seen enough price development throughout the years, allowing me to develop effective (quantifiable) handicapping skills, and i'm sure many others have.
So you trade a la Steidlmayer / Koy ? I've read their Markets & Market Logic. It's a nice read. If you don't ... Then I'll have to distrust you because real Risk takers put their money where their mouth is.
That's not how it works, and it's reckless to assume you can't have 10+ losers in a row just because your win rate averages 60%. It's not a static month-to-month win rate, and for that reason, risking 3% of bankroll could potentially ream your asshole to the point of no return. I try to stay around 1%.
Let's agree that timing is a big deal when it comes to trading. The better the timing, the smaller the protective stop needs to be. Yes, it's easy to go down that rabbit hole seeking perfection but, that aside, not all timing mechanisms are created equal. As for "risking very little to make a whole lot," I'll be the first to declare that I never made a "whole lot" on any single trade. But, depending on how the trade is developing, you can add to an existing position risking only the unrealized profit of the ongoing trade, thereby keeping the initial risk upon original entry quite limited. Sure, you might lose that unrealized profit, but you're potentially taking a bigger ride with no additional risk to your starting capital before the original trade was initiated. It's an available risk trade-off, and you can choose to play it only when conditions warrant.
But why attempt to handicap in advance (R:R), when you can react in real time to favorable or unfavorable market action as it unfolds? Why try to predict when you don't have to?
Sure. It ain't a static month-to-month win rate but a I expected more confidence from you in these "years/thousands of day trades" that you've accumulated. Anyway ... It's true ... There ain't no magic. However I just want to point out the probability of 10 consecutive losses knowing the win rate (60%). It's 0.0001048576 (0.01%). Shouldn't happen that often. Good luck.
Didn't say that. He said he earns more in average by predicting. Maybe he's better at reading but it pays less =P However ... To predict without ever reading is prophetic. Even though stats can help the blind man (Think about occurrence of words / letters in an english text).