Kiss

[new_trader]

In your earlier example of being right 30% of the time etc., but with like 4:1 reward:risk, or being right 40% of time, but with 3:1 reward to risk (equal to 1:1 reward to risk with 80% winners). The being right more often than you are wrong, shouldn't be a factor. This desire is only a result of our egos - like you said. As they say -

It's not how big it is, it is how yo use it .

If I'm right 80% of the time, but my net average profit is 5 pip, and my net average loss is 20 pips, i only break even. So the being right more often than not part is irrelevant.

Seeing the bigger picture of being able to stay in the trade long enough to achieve the payouts of the good potential reward:risk ratios is good to grasp.

JTrader,

Trading is the only profession I know where people are encouraged to strive for mediocrity. Taking the hypothetical 7/3 ratio and applying it to the ES contract using theoretical minimums.

The result after 10 trades:
7 losers = (7.00)
3 winners = 9.00
Commission = (1.00) approx
Net Profit = 1.00 x $50 =$50.00

If you could do this consistently you can make a nice living trading 10 contracts, perhaps fewer. But what if I were to suggest that through more study and practice you could actually attain a better win loss ratio? What if I was to suggest that for every 1 hour the average person puts in you put in 3 hours? What if instead of going to the pub on Saturday night to drink with your mates you studied the markets? Would you accept that you could actually attain a ratio of 7 wins and only 3 losers or even better? Not only that, but that your winners were more than 3 times bigger than your losers! I doubt you would think it’s possible. Not only that, the majority will convince you that it is impossible and any effort to try is a dead investment. Few people are willing to go to the very bottom of things. Is it any wonder that success is for the few?

 

[dbphoenix]

In your [BSD's] earlier example of being right 30% of the time etc., but with like 4:1 reward:risk, or being right 40% of time, but with 3:1 reward to risk (equal to 1:1 reward to risk with 80% winners). The being right more often than you are wrong, shouldn't be a factor. This desire is only a result of our egos - like you said. As they say -

It's not how big it is, it is how yo use it .

If I'm right 80% of the time, but my net average profit is 5 pip, and my net average loss is 20 pips, i only break even. So the being right more often than not part is irrelevant.

Seeing the bigger picture of being able to stay in the trade long enough to achieve the payouts of the good potential reward:risk ratios is good to grasp.

You and BSD are confusing an academic exercise with real trading. Technically, everything the two of you propose is correct, i.e., mathematically correct. But in real trading, risk should be the first consideration, not reward, and having a high success rate is far more important than having a low one for a variety of reasons, not the least of which is developing and maintaining the self-confidence to trade one's plan.

Being right more often than wrong is not irrelevant; it is critical.

Db

 

[new_trader]

[EDIT]

Being right more often than wrong is not irrelevant; it is critical.

Db

Yes, and I'm glad you said it!

 

[darktone]

not the least of which is developing and maintaining the self-confidence to trade one's plan

If your talking about newbies perhaps! That shouldnt be an issue for someone whos done their time tho.

 

[dbphoenix]

If your talking about newbies perhaps! That shouldnt be an issue for someone whos done their time tho.

If someone has "done [his] time" and still can't come up with something that provides a success rate of better than 30 or 40%, something's wrong.

Db

 

[darktone]

If you could do this consistently you can make a nice living trading 10 contracts, perhaps fewer. But what if I were to suggest that through more study and practice you could actually attain a better win loss ratio? What if I was to suggest that for every 1 hour the average person puts in you put in 3 hours? What if instead of going to the pub on Saturday night to drink with your mates you studied the markets? Would you accept that you could actually attain a ratio of 7 wins and only 3 losers or even better? Not only that, but that your winners were more than 3 times bigger than your losers! I doubt you would think it’s possible. Not only that, the majority will convince you that it is impossible and any effort to try is a dead investment. Few people are willing to go to the very bottom of things. Is it any wonder that success is for the few?

Its got nothing to do with how many times you are right! It has everything to do with.

1) where you enter.
2) how you manage the risk during that entry.
3) leaving it alone till target.

If trader is eying an entry with 300 pips in it why should he worry about having X amount of entries retraced as long as he keep my costs small to nothing! As i remember even socos thinking went along these lines! The only time i can see it being a problem is if trader throws the in towel through a 'Fk it i got stopped again!!' attitude rather than the PA showing him hes wrong!

It makes no sense to me other than to serve ego!

 

[new_trader]

Its got nothing to do with how many times you are right! It has everything to do with.

1) where you enter.
2) how you manage the risk during that entry.
3) leaving it alone till target.

If trader is eying an entry with 300 pips in it why should he worry about having X amount of entries retraced as long as he keep my costs small to nothing! As i remember even socos thinking went along these lines! The only time i can see it being a problem is if trader throws the in towel through a 'Fk it i got stopped again!!' attitude rather than the PA showing him hes wrong!

It makes no sense to me other than to serve ego!

What is your definition of being "right"?

OR

What do you think my definition is?

 

[darktone]

If someone has "done [his] time" and still can't come up with something that provides a success rate of better than 30 or 40%, something's wrong.

Db

2 traders, same position view of a 300 pip move.

Trader I employs a 100 pip stop to his entry!
Trader II attempts to gain entry in a smaller tf!

They are proved correct in there view. However, it took trader II 5 attempts to enter!
They both take their profit at +300.

The difference? With size not considered!.....None! :whistling
If size is considered! Well, it doesnt take much thinking about does!!:clap:

Size matters baby!

 

[dbphoenix]

2 traders, same position view of a 300 pip move.

Trader I employs a 100 pip stop to his entry!
Trader II attempts to gain entry in a smaller tf!

They are proved correct in there view. However, it took trader II 5 attempts to enter!
They both take their profit at +300.

The difference? With size not considered!.....None! :whistling
If size is considered! Well, it doesnt take much thinking about does!!:clap:

Size matters baby!

2 traders. same position view of a 300 pip move (though there's no way of knowing in advance what the potential reward of any given trade is going to be).

Trader i employs a 100 pip stop to his entry.
Trader II attempts to gain entry in a smaller tf.

Trader I doesn't know how to enter. He's stopped out for -100.
Trader II does know how to enter. He's either in immediate profit or is stopped out at BE.

The difference? Trader II knows how to enter; he therefore winds up with a trade to manage. Trader I does little more than take a stab at it and hope for the best.

Db

 

[darktone]

What is your definition of being "right"?

OR

What do you think my definition is?

"Intolerable!" remember? p25

 

[darktone]

2 traders. same position view of a 300 pip move (though there's no way of knowing in advance what the potential reward of any given trade is going to be).

Trader i employs a 100 pip stop to his entry.
Trader II attempts to gain entry in a smaller tf.

Trader I doesn't know how to enter. He's stopped out for -100.
Trader II does know how to enter. He's either in immediate profit or is stopped out at BE.

The difference? Trader II knows how to enter; he therefore winds up with a trade to manage. Trader I does little more than take a stab at it and hope for the best.

Db

Thats another example. Fair doos. So why the win/loss importance?

 

[dbphoenix]

So why the win/loss importance?

Could you elaborate?

 

[darktone]

Could you elaborate?

Post 65. You understand me just fine!

 

[dbphoenix]

Post 65. You understand me just fine!

Post 65: If someone has "done [his] time" and still can't come up with something that provides a success rate of better than 30 or 40%, something's wrong.

You're asking "why the win/loss importance".

The answer is obviously to make more money, but I assume you're going for something else.

 

[darktone]

The answer is obviously to make more money

be
be
-5
be
be
-10
be
-5
be
+300

or

-20
+300

Makes no difference.

 

[dbphoenix]

be
be
-5
be
be
-10
be
-5
be
+300

or

-20
+300

Makes no difference.

This doesn't reflect the content of my reply. I said:

Trader I doesn't know how to enter. He's stopped out for -100.
Trader II does know how to enter. He's either in immediate profit or is stopped out at BE.

Worst-case scenario for TII is that he's out at BE. However, he might not be, in which case he remains in the trade until he receives a reversal signal. Regardless of how much he makes, he's in better shape than TI, who's out 100.

 

[darktone]

This doesn't reflect the content of my reply. I said:

Trader I doesn't know how to enter. He's stopped out for -100.
Trader II does know how to enter. He's either in immediate profit or is stopped out at BE.

Worst-case scenario for TII is that he's out at BE. However, he might not be, in which case he remains in the trade until he receives a reversal signal. Regardless of how much he makes, he's in better shape than TI, who's out 100.

tut tut tut!

p62

Being right more often than wrong is not irrelevant; it is critical.

?

 

[dbphoenix]

tut tut tut!

p62



?

p62: You and BSD are confusing an academic exercise with real trading. Technically, everything the two of you propose is correct, i.e., mathematically correct. But in real trading, risk should be the first consideration, not reward, and having a high success rate is far more important than having a low one for a variety of reasons, not the least of which is developing and maintaining the self-confidence to trade one's plan.

Being right more often than wrong is not irrelevant; it is critical.

So what are you tutting?

 

[darktone]

Being right more often than wrong is not irrelevant; it is critical.

Is it?

 

[dbphoenix]

Yes.