Risk Reward Myth

[theroguetrader]

I really am losing the will to live.

How precisely do you go about assessing whether 'the trade can achieve R1' (or any other target/reward level)? You can't.

That's the whole point.

If it's worth going in, you go in. You stay in all the while it's worth staying in. When it's no longer worth staying in, you get out.

What's your reward. That's nice. How does it relate to your risk? Who cares? Next trade.

Quite apart from there being a morbid fear amongst newbies/non-traders of taking a reward less than the risk there seems to be a lack of understanding at the most basic level about what trading is all about.

" you cant " ?? ....

" whether you think you can, or whether you think you cant - your right " .... !!
(Henry Ford) -

 

[Atilla]

Here is another pair of trades for GBPUSD - based on 15min charts.

Saw another trade - looking back, that would have failed to the upside but succeeded to the downside. In red circle.

Also put another one earlier on AUDUSD based on daily charts. This is a biggy but same principals - two trades either side of BB. May take a month to hit target but with big market questions I'm expecting gold to make some big swings either way and thus should impact AUD. Struggling with inflation they are also raising rates.

I was expecting upside but the downside sell has become the active trade so it's nice to have a system that doesn't care what you think...

 

[timsk]

Hi Atilla,
Take a gander at AUD/USD - it might be a good candidate?
Tim.

 

[Atilla]

Hi Atilla,
Take a gander at AUD/USD - it might be a good candidate?
Tim.

Well spotted. Have already put two pairs in and the short has taken the hook with 200:400

About to put another pair in for USDJPY on the 5mins charts. Braking rules here as I prefer not to go below 15mins. Jumping the gun as I feel USDJPY will break out to the upside.


I was talking to one of my colleagues and he said to thoroughly test a system he said you should pick your sample size ie say 50 trades and test them 10 or 20 times to confirm system is valid.

He said the stats weren't too important just take the mean of everything or the max and min as running %.

Another interesting comment he made is that if the markets were perfect one could never make money. It is the inperfections and spooting those that makes the money. I thought that was an interesting statement. Anyway once 50 trades done I'll get the stats and throw at XLS and see what comes out...

 

[Shakone]

Another interesting comment he made is that if the markets were perfect one could never make money. It is the inperfections and spooting those that makes the money.

What does it mean to say that the markets are perfect?

 

[Atilla]

What does it mean to say that the markets are perfect?

I asked him the same question and he said for you to place an entry somebody has to take a opposing view. Theoretically how can one have perfection with opposing views?

 

[Shakone]

Imperfect people? Differing aims?

 

[Atilla]

Imperfect people? Differing aims?

Perfect people? Imperfect aims?

No Harmony in the World or Peace is there?

 

[Atilla]

Imperfect people? Differing aims?

I was listening most of the time but reflecting I think markets always tend towards equilibrium assuming one (all players) have perfect information to make judgement.

However, I've dispensed with all the assumptions and theoretical mumbo jumbo. Like diarrhoea every now and then economic BS kind of seeps out...

 

[timsk]

Anyone following this thread might be interested in this golden oldie by dbphoenix . . .
The Springboard
Enjoy!
Tim.

 

[timsk]

As an aside, I've been asked what happened to dbphoenix. What follows is my own personal assessment and, as you'll soon sumise, it's not one that he would agree with if he was around to speak for himself!

He was an excellent contributor to T2W and soon became one of the resident gurus. The problem with gurus is that they tend to jossle for pole position and have egos the size of something bigger than a very big big thing. Sooner or later, they make unreasonable demands on T2W which are either refused or ignored. With their ego dented, they shuffle off to find a new forum. This is my recollection/interpretation of what happened with dbphoenix. The forum he moved to was Traders Lab' where, like here, he became the guru in residence. I don't spend any time on that forum, so I don't know what happened there but, as far as I'm aware, he no longer participates on a regular basis. This is pure conjecture on my part, but I would hazard a guess it's for much the same reason(s) that he left T2W. This all sounds vaguely critical and, in a way it is. That said, I publicly acknowledge a big debt to dbphoenix, as I enjoyed reading his often brilliantly written posts and learnt a huge amount from him. It's worth pointing out that his detractors - most notably SOCRATES - thought that he spouted nothing but quagmires of brown sticky stuff and polluted the minds of wannabe newbies - like I was at the time. For my money, he was like a lot of very talented people: their talent comes at a price and, in his case, it was an uncompromising dogma that the path to success - the only path - was his path. You either followed it without question or you were cast out into the wilderness. That said, IMO, his posts are among the most stimulating ever written by any T2W member and remain a valuable resource for us all today. The OP of the thread linked in my previous post being a case in point.

I would stress that the above is all my personal opinion/recollection and is not written in an official capacity with my T2W hat on.
Tim.

 

[Atilla]

As an aside, I've been asked what happened to dbphoenix. What follows is my own personal assessment and, as you'll soon sumise, it's not one that he would agree with if he was around to speak for himself!

He was an excellent contributor to T2W and soon became one of the resident gurus. The problem with gurus is that they tend to jossle for pole position and have egos the size of something bigger than a very big big thing. Sooner or later, they make unreasonable demands on T2W which are either refused or ignored. With their ego dented, they shuffle off to find a new forum. This is my recollection/interpretation of what happened with dbphoenix. The forum he moved to was Traders Lab' where, like here, he became the guru in residence. I don't spend any time on that forum, so I don't know what happened there but, as far as I'm aware, he no longer participates on a regular basis. This is pure conjecture on my part, but I would hazard a guess it's for much the same reason(s) that he left T2W. This all sounds vaguely critical and, in a way it is. That said, I publicly acknowledge a big debt to dbphoenix, as I enjoyed reading his often brilliantly written posts and learnt a huge amount from him. It's worth pointing out that his detractors - most notably SOCRATES - thought that he spouted nothing but quagmires of brown sticky stuff and polluted the minds of wannabe newbies - like I was at the time. For my money, he was like a lot of very talented people: their talent comes at a price and, in his case, it was an uncompromising dogma that the path to success - the only path - was his path. You either followed it without question or you were cast out into the wilderness. That said, IMO, his posts are among the most stimulating ever written by any T2W member and remain a valuable resource for us all today. The OP of the thread linked in my previous post being a case in point.

I would stress that the above is all my personal opinion/recollection and is not written in an official capacity with my T2W hat on.
Tim.

I found him to be arrogant and full of himself. Along with Chump they blustered their way with dismissive abuse. Subsequently I grew to like Chump but db I never warmed to.

I do recall him plugging his book to some newbies. How cheap is that? Just business I guess. I'm sure he needs it...

 

[hoodoo man]

What kind of an idiot trebles his capital in three days and thinks he is a trader?

How much money did you risk to be able to do that?

Trading is about consistent returns.

Demo competition is just a bit fun for traders to have a laf.

You don't have a clue as to what you are doing.

Ahh, I see Mr Committed Loser is Losing, Every Single Day, on the forex competition. Perhaps we should all listen to your sage like advice. Perhaps you ought to have remained respectful and open minded, and then you may have learned something. You are onto a dead end with this BB squeeze rubbish, but hey - free world, pal!

Perhaps you lose on the competition because profits and growing of accounts are for idiots?

Now you make a public spectacle of yourself by being rude and disrespectful, then prove to the world that you cannot trade your way out of a paper bag. Can't give it up though, can you? I suspect you gave up live trading many years ago after constant losses but your ego feels the need to big yourself up here on an internet forum. Pathetic. Now who is the idiot?

 

[DionysusToast]

Hoodoo - are you in the comp? I noticed the 2x in 3 days & thought it was on the comp. Can you point it out - I am sure it'd make good reading...

Cheers

DT

 

[Lightning McQueen]

at least he's playing!

where you in the comp? why not enter yourself hoodoo before slagging off others, enter the comp and show what you can do, or just leave it out.

 

[DionysusToast]

at least he's playing!

where you in the comp? why not enter yourself hoodoo before slagging off others, enter the comp and show what you can do, or just leave it out.

Based on earlier posts on this thread - I thought he had entered and tripled his equity in 2 days.

I did go and look at the time but couldn't find it. I'd presumed it was in week 4.

As I said - it'd be interesting to see where he put the trades.

I tried to register myself but for some reason - didn't get approved - heard nothing back at all

 

[Lightning McQueen]

Based on earlier posts on this thread - I thought he had entered and tripled his equity in 2 days.

I did go and look at the time but couldn't find it. I'd presumed it was in week 4.

As I said - it'd be interesting to see where he put the trades.

I tried to register myself but for some reason - didn't get approved - heard nothing back at all

as far as i recall hoodoo hasn't entered the comp, the triple equity bonanza was on another platform?

and no hoodoo man registered accounts

 

[Lightning McQueen]

actually no proof was ever posted of hoodoos efforts, admirable as they are, we can only take his word for it. at this time it's just puff, wind and bluster

 

[DionysusToast]

I thought there was a draught...

 

[Atilla]

Ahh, I see Mr Committed Loser is Losing, Every Single Day, on the forex competition. Perhaps we should all listen to your sage like advice. Perhaps you ought to have remained respectful and open minded, and then you may have learned something. You are onto a dead end with this BB squeeze rubbish, but hey - free world, pal!

Perhaps you lose on the competition because profits and growing of accounts are for idiots?

Now you make a public spectacle of yourself by being rude and disrespectful, then prove to the world that you cannot trade your way out of a paper bag. Can't give it up though, can you? I suspect you gave up live trading many years ago after constant losses but your ego feels the need to big yourself up here on an internet forum. Pathetic. Now who is the idiot?

Hoodoo I assume you are internet savy and would like to ask you one question if I may please?

Below you will see 6 demo accounts. Wk#5 is indeed in loss over a 1wk period. 5 other accounts are in profit.

These demo accounts were conducted alongside my extremely busy work and home life... Now for the questions.


QUESTION1. Why do you take so much effort to screen capture my one losing account out of 6 and scribble LOSER for everyday..?

QUESTION2. How long have you spent sniffing around my trades?

QUESTION3. Hooooow much free time doooooo you have in your hands? :cheesy:

QUESTION4. Can you explain how I managed to make +ve returns on the other 5 accounts?

QUESTION5. Can you explain or demonstrate your claim to treblin your account in three days?




I told you before - you have psychological flaw that you MUST be right and cannot be wrong. You lack the ability to say OMG I've got it wrong - pooh bear.

That's why you pick the one losing account out of 6 accounts. Totally irrational but justifies your necessity to be right.

Do you hear voices in your head? :cheesy:

Look at my screen capture?

What voices are you hearing in your head now?