timsk
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Yes indeed JT, but you still have to act on your observation(s), manage the trade, apply risk and money management criteria etc. If your holy grail was accurate 99.9% of the time, you can bet your bottom dollar that the one time you bet your whole bank on a trade, that that'll be the 0.01% occasion when you'd blow your account!
Tim.
Hoggums
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This is only true if you accept the hypothesis that all future events are related to past events in some way. Personally, I don't accept this is true 100% of the time although it does happen a lot and probably most of the time. This statement also suggests that you can find a strategy that will reap a 100% win ratio. Anything less could not be considered a holy grail because the one losing trade can wipe you out.
Personally I think the answer to this question is : yes (sometimes).
JTrader
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Hi Hoggums
thats why i referred to it as "The Holiest Grail possible", rather than a holy grail. Holy grail would mean perfect/near perfect. For me, "The Holiest Grail possible" means something like maybe 3/4 perfect
.I find that if everything on the chart points to buy (or sell), it tends to be right 60% of the time, which if you apply discipline (by not risking more than 0.3 to 0.5% of your portfolio per trade) then yes one will be successful. Wont set the world on fire but will be up long term
Citizen2007
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Interesting point, it has been said that the best way to hide something is to put in open view, so i guess it must be true.
Now it just boils down to knowing EXACTLY what it is we are looking for, in order for us to recognise it when we do eventually find it.
I think for the most part that is the difficult bit to define.
Now it just boils down to knowing EXACTLY what it is we are looking for, in order for us to recognise it when we do eventually find it.
I think for the most part that is the difficult bit to define.
dbphoenix
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Unless you know what you're looking for, you cannot test it, much less screen for it. If you have not tested it, you have no idea of the probability of its success. With no idea of the probability of success, any trades made are essentially guesses.
http://www.trade2win.com/boards/showpost.php?p=202729&postcount=5
Db
JTrader
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An interesting exercise is to get an indicator free chart (any), and try and develop a set of rules/conditions that lead to a high % of winners. Maybe using nothing else but a straight line drawn on the chart.
Once you have been able to do this on this section of chart, on the same instrument, look at a fresh period of market action, and see if the rules work on that session. If they do, then keep doing the same exercise for several more screenshots.....
Or, perhaps the rules/conditions need modifying from 1 to the next screenshot, in order to improve their solidity, etc. etc. which is good, as you are continually refining the approach...
If throughout these exercises you do come up with something interesting, you may then want to demo trade it. If demo trading goes well, progress to small amounts etc.....
Grey1
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100% agree timYes indeed JT, but you still have to act on your observation(s), manage the trade, apply risk and money management criteria etc. If your holy grail was accurate 99.9% of the time, you can bet your bottom dollar that the one time you bet your whole bank on a trade, that that'll be the 0.01% occasion when you'd blow your account!
Tim.
There are three points in any trade
A= entry
B= stop loss
C = target
1) The distance between A to B is RISK,, Risk needs managing
2) The distance between A to C is profit,,, Profit needs managing too
if I had to ask you which one of 1 or 2 is more important I am sure most of you would say 2,.. This is what they tell you and read all over internet,
The fact is No 1 determines if you survive in the market or not and No2 determines how wealthy you become.
Before you become a millionaire in this game make sure you can survive the market for the first few years and if you did then concentrate on NO 2
Risk management and what you want to do about your trade when risk become excessive is crucial to your survival as a day trader,,
Grey1
Well I find point 2 hardest to manage. when you are in profit one doesnt know when to pull out. if its cruising your way you think there is more room, especially in this last 2 weeks volatility. Taking partial profits (given i only risk 0.2% of portfolio per trade) really leaves you with very little. trailing stops is ok but even that if u want to put ur stop at a S/R level, you end up giving back half your profit. I was short the dow today 13170, what was I supposed to have done when it was crashing thru 13100 with all charts/indicators pointing strongly downwards. I came out 13120 (before the last leg which took it to 13055
)But for me implementing point one is easy. if it hits your stop, you are out. next plan
JTrader
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Well I find point 2 hardest to manage. when you are in profit one doesnt know when to pull out. if its cruising your way you think there is more room, especially in this last 2 weeks volatility. Taking partial profits (given i only risk 0.2% of portfolio per trade) really leaves you with very little. trailing stops is ok but even that if u want to put ur stop at a S/R level, you end up giving back half your profit. I was short the dow today 13170, what was I supposed to have done when it was crashing thru 13100 with all charts/indicators pointing strongly downwards. I came out 13120 (before the last leg which took it to 13055
But for me implementing point one is easy. if it hits your stop, you are out. next plan
I too find point 2 hardest to manage. It really anoying to take a +20, only to see +80 become available - but there's no way of knowing in advance this would happen.
But its equally annoying to be +20, only to see it pull back to +10, where you may exit with a TSL.
With intraday stuff, eg. 15-min, one candle will very often take you out - either PT, TSL, SL or BESL, so its a rare luxury to be able to manage the trade over multiple candles, letting profits run until the point that the candlesticks indicate an exit - i.e. a broken trendline.
This means that you may end up with an equal sized PT & SL, which is not ideal. But if you can achieve 70% winners, it is workable.
For me, regarding 1 its a case of finding the optimum level of SL, the maximum pips i will risk per trade before exiting. The max. SL isn't always hit - eg. a SAR signal may see me reverse b4 hand. I decide on the value through backtesting - usually visually....
just happened to me. was short EURCAD 14355 came out 14335 and 2 mins later market was 14300!
