Best Thread Firewalker's Journey: A path of discovery in search for enlightenment

[firewalker99]

If you're entering at 3 ticks above R or below S, numbers should be exact.
Trend is not a consideration.

Yes, but it's not easy to distinguish ticks on this small chart. Assuming your S/R lines are at round numbers, then my exact entries (3 ticks away from S/R) would have to be:

(1) Long @ 1555.75 around 0930
(2) Short @ 1554.25 around 0945
(3) Long again @ 1555.75 second top
(4) Short again @ 1554.25 around 1025
(5) Short @ 1549.25 around 1030 (or 1549.75 with S at 1550.50)
(6) Long @ 1550.75 at right end of the chart (or 1551.25 with S at 1550.50)

 

[dbphoenix]

Yes, but it's not easy to distinguish ticks on this small chart. Assuming your S/R lines are at round numbers, then my exact entries (3 ticks away from S/R) would have to be:

(1) Long @ 1555.75 around 0930
(2) Short @ 1554.25 around 0945
(3) Long again @ 1555.75 second top
(4) Short again @ 1554.25 around 1025
(5) Short @ 1549.25 around 1030 (or 1549.75 with S at 1550.50)
(6) Long @ 1550.75 at right end of the chart (or 1551.25 with S at 1550.50)

Assuming a 1pt stop, which of these would be winners and to what degree and which would be losers and to what degree?

 

[firewalker99]

Assuming a 1pt stop, which of these would be winners and to what degree and which would be losers and to what degree?

Winners:
(4) Shorting here is the only time price went in the direction for about 5 points. Assuming this is a reasonable target, 5 points of profit would be in the pocket.

Losers:
(1) If the target were only 2points, this could have been a win, but I'm assuming that's not reasonable.
(2) Could be a winner if target was only 3 points, depending on whether I'm allowed to move my stop to BE or not, this would be a loser.
(3) Idem as (1) but target hit almost in seconds rather than minutes.
(5) About right after the entry price went the other way, stop would have been hit almost immediately.
(6) Looking at the charts that follow, price didn't go beyond 1552. So my stop would been hit.
As with a 1pt stop, all my losers would lose 1 point each.

 

[dbphoenix]

Winners:
(4) Shorting here is the only time price went in the direction for about 5 points. Assuming this is a reasonable target, 5 points of profit would be in the pocket.

Why are you assuming that 5pts is a reasonable target?

 

[firewalker99]

Why are you assuming that 5pts is a reasonable target?

Gaining 5 points, with risking 1 point only would seem reasonable... We haven't talked much about setting targets or goals so I have no real frame of reference and it's only an assumption, I'm open for suggestions though.

 

[dbphoenix]

Gaining 5 points, with risking 1 point only would seem reasonable... We haven't talked much about setting targets or goals so I have no real frame of reference and it's only an assumption, I'm open for suggestions though.

The chart will tell you what your target should be. For the time being, choose whatever target you like.

 

[firewalker99]

The chart will tell you what your target should be. For the time being, choose whatever target you like.

Well if I cannot use ATR, I would say 3 times my stop, so 3 points.

 

[dbphoenix]

Well if I cannot use ATR, I would say 3 times my stop, so 3 points.

So go through your trades again with a 3pt target and determine which are winners and by how much and which are losers and by how much.

 

[firewalker99]

So go through your trades again with a 3pt target and determine which are winners and by how much and which are losers and by how much.

Winners:
(4) -> +3 points
(2) -> +3 points

Losers:
(1) -> -1 point
(3) -> -1 point
(5) -> -1 point
(6) -> -1 point

Net result = 2 points

 

[dbphoenix]

Winners:
(4) -> +3 points
(2) -> +3 points

Losers:
(1) -> -1 point
(3) -> -1 point
(5) -> -1 point
(6) -> -1 point

Net result = 2 points

So what are

1. your win rate, or win:lose ratio

2. your profit:loss ratio

3. your maximum loss on any single trade

4. your longest uninterrupted string of losing trades

 

[firewalker99]

So what are

1. your win rate, or win:lose ratio

2. your profit:loss ratio

3. your maximum loss on any single trade

4. your longest uninterrupted string of losing trades

Based on this particular example:
1. 1:2
2. 3:1
3. 1 point
4. 2 trades

 

[dbphoenix]

Based on this particular example:

2. 3:1

How did you arrive at this number?

 

[firewalker99]

How did you arrive at this number?

The profit I take from each trade = 3 points, the (stop)loss = 1 point.

 

[dbphoenix]

The profit I take from each trade = 3 points, the (stop)loss = 1 point.

That's a reward:risk ratio, not a profit:loss ratio. The latter is the ratio of profits to losses.

 

[dbphoenix]

Do you have your profit:loss ratio yet?

 

[firewalker99]

Do you have your profit:loss ratio yet?

sorry, I was afk
3:2 then?

 

[firewalker99]

That's a reward:risk ratio, not a profit:loss ratio. The latter is the ratio of profits to losses.

This comes from traderpedia and that's why I answered 3:1 : "The Profit/Loss ratio is generally taken to be the ratio between a trading system's average winning trade result and its average losing trade result. For example, if a particular system's winners average 1.50 points and the losers averaged 0.75 points, the Profit/Loss ratio would be 2.0 (1.75/0.75)."

 

[dbphoenix]

This comes from traderpedia and that's why I answered 3:1 : "The Profit/Loss ratio is generally taken to be the ratio between a trading system's average winning trade result and its average losing trade result. For example, if a particular system's winners average 1.50 points and the losers averaged 0.75 points, the Profit/Loss ratio would be 2.0 (1.75/0.75)."

Your profits are not three times your losses. Therefore, for this purpose, I suggest you make a simple comparison.

Now go on to the next chart in the series: same trigger, same target, same stop. Then bring all your records up to date at that point.

 

[firewalker99]

Your profits are not three times your losses. Therefore, for this purpose, I suggest you make a simple comparison.

6 points gained, 4 points lost, doesn't that add up to 3:2 or am I still hitting it wrong?

Now go on to the next chart in the series: same trigger, same target, same stop. Then bring all your records up to date at that point.

Do you mean the next couple of charts, because the next one in the series would only add one entry?

 

[dbphoenix]

6 points gained, 4 points lost, doesn't that add up to 3:2 or am I still hitting it wrong?

3:2 is correct.

Do you mean the next couple of charts, because the next one in the series would only add one entry?

Just the next chart.