I agree, but I find the pressure also tends to start at 3 losers in a row. If he really can do a 65-70% win rate. He might not get 3 losers in a row before he hits his target.
Thanks for the post. Yah, I did some monte Carlo in Excel and because of the ridiculously insane win rate after 10-15 trades in most scenarios he'll already be crushing it. That assumes he either 2x or 50% his money each trade. That winrate is ridiculous though, in my opinion. You can't run like God for that long. I would think taking 2 hours to expire options and betting the NQ will move 0.5% or more, getting a great assymetrical win rate, risking 20% to 30% of your money and hitting a handful of times may make more sense as at least there luck can be on your side and your trades are deeply assymetrical. He won't consistently hit his ratio I wouldn't think, it's impossible for that long, but he can run like God for a handful of massive trades perhaps. In 2002, 2003, and 2007, 3x I started with 1k (all I had) and moved it to 50k twice and 30k once as I perfectly spotted the bottom in 2002, 2003, and the rise before the top in 2007. I used options and hit it perfectly. So a fair amount of luck there but regardless these are perfect events for this. I don't see this market offering that kind of edge, even if you get super lucky. I of course may be wrong. Also, due to misunderstanding of utility I lost in all within 3 weeks all three times. I should have adjusted sizing significantly as I hit milestones not continued kamikaze trading, lol. I hope since it's a journal he posts his trades. It could be fun to root for him in realtime.
from $7000 to $1M is not big deal but 50% risk per trade is by far too much, you should reduce Risk percentage by Half after winning every trade. 1st trade 50% Second 25% third 12.5% and after every trade 6% risk this way it will be possible, otherwise 2 continuous Stop lose and you will be out of your challenge. Anyways Good luck mate
Agree, traders (who have a positive risk to reward) do sometimes win at a 65%+ win rate over say 20 trades but that is after the fact and the win rate will revert back down to something lower over the long run. You just can't do it on demand, like declare over the next 20 or 60 trades I will have something close to a 65% win rate. Unless the OP is one of the best ES/NQ trader in the world that is. A fantasy for all traders is to obtain a mythical 65% win rate with even a 1:1 RR ratio, then start with $1K and reinvest profits at fully Kelly for that system which would be 30% risk per trade. Any trader who can maintain a 65% win rate with even a 1:1 RR will crush it sooner rather than later even starting with $1K as long as they bet full Kelly or even half Kelly. But the markets don't work like that, typically win rates are below 50% but the RR is above 1:1. Making the high win rate fantasy impossible to pull off in reality. And meaning you should only really risk a maximum of 5% per trade in the long run.
I think he can like how you did previously below. Why can't it offer that kind of edge again? There will be a near-perfect confluence again, but he will need to be riduculously patient for these daytrades. In one month there may be a perfect trend day where it opens at low of day and closes at high of day. The OP implies he has an ability to identify these perfect trend days with high probability. I certainly do not.
There is a lot of hindsight bias involved. It is easy to remember the times when we nailed a big home run or spotted an obvious trend day, but forget all the times we took a small loss or what looked like an obvious trend day reversed before the close. (We tend to remember very big losses though, lol). So our win rate is never as good as we remember or think it is.
Fwiw my historical run from 7->300 involved swing trading and relativly far otm spreads. These spreads offered 4 to 5 baggers. Still the best option for retail I asume. Then at 300 a big hit came and I lost it mentally. Were some pretty dark weeks I remember
I have two trading aphorisms based on my experience, slight that it is. 1) When in doubt, go long. 2) Trading is a mind f*ck business.