Realized expectancy of your discretionary system

Discussion in 'Risk Management' started by Zyker, Sep 22, 2013.

  1. Thank you for your response.

    Yes, I would like to share anything you wish to know.

    I'll reread the thread to find out your timeframe. Mine is 5 minutes on ES and I position trade stocks and do sector rotation in stocks (4 1/2 week holds).

    Edit: I trade mechanically and do not use descretion except for maximizing the use of the extreme on the profit segment bar turns.
     
    #11     Sep 23, 2013
  2. In toolazy's terms and using two significant figures my results are

    Profit = 1.1 as compared to your .2

    Loss = 0.24

    Net = 0.90 as compared to your .2

    You also asked for trade duration; an average is 7.8 times 5 = 39.0 minutes.

    My post probably seems like it should be ignored as you suggest. But, if you just double your performance three times, then we are on the same plane.
     
    #12     Sep 23, 2013
  3. Sergio77 made a suggestion to you about your math. He is correct.

    My numbers are in your terms (incorrect) as a way of presenting what is possible to you. Toolazy also used your schema.
     
    #13     Sep 23, 2013
  4. Sergio77

    Sergio77

    From an hour to 72 hours. Avg is about 8 hours.
     
    #14     Sep 24, 2013
  5. Zyker

    Zyker

    Thank you for your feedback, gentlemen, and again, apologies for misusing the terminology. I am just accustomed to using expected per-trade outcome as THE measure of system performance as it directly relates to the assumed risk.

    JH: My 0.2 is the expected (net) trade outcome relative to the assumed risk. If you can expect to make 0.9 per trade in 39 minutes, then my hat is off to you. But I cannot follow your reasoning leading to this figure; for statistical expectancy, you'd need to weigh the average win and average loss by their respective frequencies to get the expected outcome.

    Sergio: My holding time is typically about 96 hours. A typical holding period of 8 hours, as in your case, would reduce my expected per-trade outcome to about 0.05-0.07. This is something I've been working on to improve, but currently have to resolve by dominantly sticking to end-of-day trading.

    EDIT: clarification regarding reply to JH
     
    #15     Sep 24, 2013
  6. Four people commented. You asked for how long it takes as well. So you can now "normalize" the numbers so they can be compared. When this happens the contrast among the numbers grows to much greater extremes.

    The next Q to be answered is relative "in the market" time. I am in for 78 of 81 bars. I do not do entry/exit/sideline All I do is hold/reversal. This is not a discussion of anything but the thread topic, so it is not a good idea for me to go afield again. (See your comment to Sergio)
     
    #16     Sep 24, 2013
  7. toolazy

    toolazy

    ok, if that is the way you look at it.

    I am working too on increasing yield per trade. Actually looking at JH framework right now to get some ideas. Thanks JH for sharing. I am a swing guy and not interested in shorterm. Benefit of swing is that one can increase size to very large levels without worrying about algos, etc. Achieving 10 net wins will be huge step for my account.

    Should mention that I papertraded this for long time and convicition level is high, many 100 samples over long period.
    edit: papertraded is not right word as positions were real. Except using different methods.
     
    #17     Sep 25, 2013
  8. Sergio77

    Sergio77

    Why is that? Does the market know when you are placing a trade that you are a swing trader or something else? Can you explain?
     
    #18     Sep 26, 2013
  9. toolazy

    toolazy

    sure. contrary to popular belief, I believe market will engeener stop loss chase, bigger, more incentive. swing positions my stops are in range of 1-2 day ATR. If trade is right, it is going to take huge effort to stop me out so I am quite comfortable.

    Shortterm, your 20 pips stop on 10 contracts may be more attractive than you think.

    I may be paranoid but worry about this before my trade size hits problematic levels. If hedge funds 10B + are too big today to handle, then 20 pip stop may be cat mouse play.

    In swing I double size after each winner. .
     
    #19     Sep 27, 2013
  10. YVW....
     
    #20     Oct 2, 2013