Prudent Risk Management + No Edge = Positive Expectancy??

Discussion in 'Risk Management' started by ironchef, Nov 14, 2023.

  1. ironchef

    ironchef

    I actually tried to take profits and take losses roughly the same, because that increased the win rate to ~55% from < 45%, perhaps that is a bad idea.

    True, it is more like playing roulette than a fair coin toss.

    The more I day trade the more respects I have for day traders. It is a tough game. Hat off to you guys.
     
    #101     Nov 28, 2023
  2. tiddlywinks

    tiddlywinks


    Bad idea.

    You seem to think you control the order/sequence in which gains and losses occur. You do not.
    Using your 50/50 metric, using your 25 trades/day metric, are you prepared for 13 CONSECUTIVE losses in a day?

    It is the order/sequence in which gains and losses occur that generates the 50/50 (W/L) metric. Not the other way around. And it applies to any measurement interval... Daily, 13/25, Weekly, 63/125, etc.

    What if market(s) and/or trading instrument(s) do not offer "X" number of trades in a given day that are acceptable to you? So, yea, there's that too.

    Better would be to analyze "streaks" and determine some squishy probabilities. But that involves knowing your set-ups, which you are reluctant to look at.
     
    Last edited: Nov 28, 2023
    #102     Nov 28, 2023
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  3. ironchef

    ironchef

    It is not uncommon that investors prefer a steady 5% over a volatile 10%: risk adjusted return concept.
     
    #103     Nov 28, 2023
  4. ironchef

    ironchef

    Thanks for your comments. Those are very constructive feedbacks that is needed.

    You are right, my thought process may be flawed.
     
    #104     Nov 28, 2023
  5. SunTrader

    SunTrader

    Right - investors.

    And why comfort and day trading are for the most part mutually exclusive.
     
    #105     Nov 28, 2023
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  6. ironchef

    ironchef

    Good point Mr SunTrader. Thanks for the coaching.

    I may have to learn how to be uncomfortable, just like learned how to take lots of small losses and not be too upset.

    I was hopping to have my cake and eat it too.
     
    #106     Nov 28, 2023
    SunTrader likes this.
  7. hilmy83

    hilmy83

    I remember the days when I traded manually. Some days I would get nervous just cause I traded a little big.

    But I liked that feeling. Somehow the nervousness gives me a little energy. When the trade ends in profit, it's like a little climax.

    Nowdays, it's boring. Like watching paint dry kind of boring.

    Even after almost a year not trading myself, I still have the feeling to just put on manual trades...

     
    #107     Nov 28, 2023
    Zwaen and ironchef like this.
  8. ironchef

    ironchef

    Based on your input, I changed my approach.

    Instead of getting a fixed # of trades, today, I kept trading based on price movement, stopped when price started to consolidate and range and there were no more entries I like.

    Called it a day, another positive day.

    Thanks @tiddlywinks.
     
    #108     Nov 29, 2023