Prudent Risk Management Is The Only True Edge In TRADING

Of course you will make money, IF you implement PMM, you aren't limited to a 1:1 payout as you are in BJ, increasing your payout in trading forms part of PMM.

 

Actually--yes you would make money and a lot of it because on the correct trades, you would exploit those for more profit. One doesn't need even 50% winners to be wildly successful. Most traders, especially newbies, chase high win percentage. Most traders lose money.

 

But that isn't an edge.

That's part of maximising an edge. But if you don't have a statistical advantage in the market no amount of discipline or money management will help you.

 

It is the only edge.

 

winning percentage has nothing to do with profitability. I can risk 100 ticks to make 1 or risk 1 tick to make 100 they both end up with the same result without a statistical edge.

This has been my full time living for 10 years trading on prop desks and funds. If you are also making a full time living good for you. I encourage you to carry on your work. You have clearly developed an alternative approach.

But if you are part time/still trying to make a successful full time career from it id urge you to focus your efforts into finding replicable patterns that exploit inefficiencies in market pricing

 

Nonsense. So if I flip a coin and risk 100 to make 500 I will be profitable?

Try it. I guarantee you will not make money after brokerage and slippage

 

It's elementary math, you will make money at 5:1 payout at even odds, after slippage and commissions.

Why do you think binary options are limiting payouts to 85% of the stake?

 

Correct

 

Correct

 

No you won't. How will you make money at 'evens odds'?? Go and do it then show me the results.

Risk 1 to make 1 you win about 50% of the time.

Risk 1 to make 2 you win about 25% of the time and so on.

Win rate and risk reward are linked in a zero edge scenario.

If you risk 1 to make 5 flipping a coin (or another no edge method) you will win about 1 trade in 5 (NOT 50:50) and break even. Then add in brokerage and slippage and you are down.

Trust me I have run thousands and thousands of backtests. It doesn't work.