Stops and Risk Control - ES

Discussion in 'Index Futures' started by rknas, May 31, 2022.

  1. Hello rknas,

    You have to just dedicate your life to watching price on the charts and do the best you can.

    It takes A long time.
     
    #31     Jun 3, 2022
  2. easymon1

    easymon1

    Damn if it don't, lol.
    What would you say have been some projects that you might have been better off to put at the back of the briefcase to free up time and attention for more beneficial trading ideas and pursuits.
     
    Last edited: Jun 4, 2022
    #32     Jun 4, 2022
    SimpleMeLike likes this.
  3. Hello easymon1,

    Great question

    Women and classic cars.

    But I love women and classic cars.

    I am actually done with spending alot of time thinking about trading ideas. It is a waste of time, because there is like 100 trading ideas I can come up with. But not time and energy and motivation to test them out.

    I prefer to just scalp daily and working on scalping algo. Swing trading algo is easy
     
    #33     Jun 4, 2022
  4. wmwmw

    wmwmw

    This is huge improvement over only using stop as a risk management measure.
    But there is still room for further improvement.
    My system uses stops both for entry and exit, at the points where a trend is expected to start and end.
    For example, my swing trading system says spx 4094 will be the stop short entry signal when it hits on next trading day.
     
    Last edited: Jun 5, 2022
    #34     Jun 5, 2022
  5. wmwmw

    wmwmw

    What % risk control depends on your edge.
    The higher your edge, the higher risk you can tolerate.
     
    #35     Jun 5, 2022
    virtusa likes this.
  6. Yes but 5% is in every means a lot. It takes 5 losers in a row and 25% are gone. Even with a big edge this almost means betting the farm.
     
    #36     Jun 5, 2022
    Real Money likes this.
  7. wmwmw

    wmwmw


    First, your assumption is wrong.
    You assume a constant amount of capital. But the correct formula is a constant ratio to your capital.
    For example, if your capital is 10000, 5% is 500. But when your capital reduce to 5000, your 5% is 250. But you assume it is always 500.

    Second, per kelly Criterion if your win rate is 80% and win: loss ratio is 1:1, your best bet percentage is 60%.
    I think 1/4 kelly Criterion is conservative enough, which is 15%.

    You think it is too risky because either your win rate or your win: loss ratio is too low. That means your edge is too thin.
     
    Last edited: Jun 5, 2022
    #37     Jun 5, 2022
    rknas likes this.
  8. easymon1

    easymon1

    1. "spending alot of time thinking about trading ideas"
    2. "But not time and energy and motivation to test them out"

    Could not agree more.
    If you don't benchmark the ideas, why even bother to think about them.

    So ...what triggers your entry?
     
    #38     Jun 5, 2022
  9. rknas

    rknas

    Is there a good platform recommendation where I can simulate an option hedge against a futures trade in ES? I have access to Interactive brokers and Thinkorswim/Ameritrade.
     
    #39     Jun 19, 2022
  10. virtusa

    virtusa

    That's the secret that almost all people deny.
     
    #40     Jun 19, 2022