I have three systems which work with acceptable expectancy. They took me three years to develop and cost me about $9K in losses to perfect. Why the fuck do you think I would GIVE you these?
High percent of winners means nothing if your losses are greater than your gains. I once traded a scalping system that was right 80% of the time and I lost money. How? The losers were nearly 4 times greater than the winners. Add commissions, slippage, and associated fees and you're down for the month.
after searching around this site for some time, i have come to the conclusion that 95% of the people here dont know what that means.
High percent of winners means nothing if your losses are greater than your gains. I once traded a scalping system that was right 80% of the time and I lost money. How? The losers were nearly 4 times greater than the winners. Add commissions, slippage, and associated fees and you're down for the month. -------------------------------------------------------------------------------- two words. risk management OK! I'm not too proud to ask. How would risk management save this system? I had be one of those black box, magical mystery systems. Trade either set up or it didn't. Assumeing the set up occured I jumped in with a market order, which was what the system dictated, market orders. By the way this was for currency futures which I was trading about two years ago. The goal was 6 ticks. Real world, I got about 4.5 average. As I stated it was 80% accurate. The downside was the 20% losers averaged about 14-16 ticks depending on when the system gave an indication to get out. Trading 10 contracts the best I could do was a profit of $300 - $400.00 per month. System gave about 10 trades per week. I bought this from Howard Goldstein/Trading Dynamics. Web link is http://daytradesystems.com/main.html Any "constructive" suggestions would be helpful. I might be able to trade it again. I just didn't feel sitting in front of my screen from 7am to 1pm everyday and earning a whopping 100 bucks a week was a good use of my time.
Alright bro, how bout this? If you´re going to profit 6 ticks, dont lose more than two. If you´re going to lose 14-16 ticks dont win less than 45 ticks. Don´t wait for your system to tell you when to exit, you exit when your stoploss gets hit... no sooner no later. By doing this you´ll probably get your prob down to 50%, or less... but guess what, if your prob is 30% and you hit a 3:1 profit/risk ratio... you´re winning... A good risk management strategy should have entry parameters, bet size parameters, diversification, a good stop loss, and good exit parameters {for winning trades} It doesnt matter which vehicule you´re using, options, futures, currencies, stock, etf... without sane risk management you´ll go broke sooner or later. No matter how good your strategy is.
It doesnt matter which vehicule you´re using, options, futures, currencies, stock, etf... without sane risk management you´ll go broke sooner or later. No matter how good your strategy is. You are correct. That was the point I was trying to make in my intial post. Winning percetages mean little if your losses are bigger than your gains. I learned that the hard way with the system I purchased. Perhaps I did a poor job of communicating that. We seem to be on the same page.