The need to be right VS the need to make money

[BSD]

The greatest trick the devil ever pulled, was convincing the world he didn't exist.

Suppose I move my stop to breakeven after I'm in a trade for 1 minute and suppose I hardly get stopped out before that minute what would that say about my "risk" (I might get a lot of BE trades but that's beside the point in this particular example)?

Mate, don't get me wrong, but I'm not really into a lot of woulda-coulda-shoulda theories...

All I am on about is saying that high hit rate AND high R/R PLUS scalability cannot co-exist, that no such proof has ever existed...

AND that having high winning % PLUS high R/R is also ABSOLUTELY irelevant for those who want to make the most money, that it is nothing than only a pipe dream sought after with the hope of offering comfort for those who have a need to being right way over wanting to make the most money...

BUT to be fair I will gladly eat a hat, AND pester Mr Tudor Jones to give the guy or gal a job that will make them almost as rich as if they started their own hedge fund...

IF someone pops up here who has more on offer than theories, who can't just talk a beguiling talk, BUT ACTUALLY WALK THE WALK.

WHo can open an account, trade that one year, and show us PROOF.

 

[firewalker99]

Mate, don't get me wrong, but I'm not really into a lot of woulda-coulda-shoulda theories...

There's nothing hypothetical about my example. It's pretty much how I trade. But like I said, it means getting stopped out breakeven in the process and opening yourself the possibility for re-entering. I can tell you I have about 3 out of 10 losing trades. That's not great, but it's not bad either. I didn't say I make money on the rest, because (like I said) some are exited breakeven. Now you tell me, based on what I said, what is my risk:reward since I hardly ever but myself at any "risk"?

IF someone pops up here who has more on offer than theories, who can't just talk a beguiling talk, BUT ACTUALLY WALK THE WALK.

What do you want me to do? You want me to show you some trades?

 

[BSD]

What do you want me to? You want me to show you some trades?

Open an account at say Oanda or interactivebrokers, give us the account number, trade that one year, compounding it in a way that is scalable, where you can keep compounding, ie no one pip stop losses or 5 pips take profits scalping nonsense, and then, at the end of a full year, have it show us that your hit rate is not below 70%, and that on average your rewards are not smaller than three times the size of your losers, and that unlike at the hedge funds I cited the bulk of your profits does not come from less than say 40% of your trades, and that we have at least a few hundred trades to make the sample relevant.

Then I will start pestering Mr. Tudor Jones for a job for you or anyone else who can do that, and I really mean that.

 

[firewalker99]

Open an account at say Oanda or interactivebrokers, give us the account number, trade that one year, compounding it in a way that is scalable, where you can keep compounding, ie no one pip stop losses or 5 pips take profits scalping nonsense, and then, at the end of a full year, have it show us that your hit rate is not below 70%, and that on average your rewards are not smaller than three times the size of your losers,

Could you define what exactly you mean by "hit rate"? Like I said, I get many breakevens and I lose on average 3 out of 10 trades. This could look like a batch of my trades:

0 / 0 / +80 / -10 / 0 / +100 / 0 / -10 / +450 / -10

..and that unlike at the hedge funds I cited the bulk of your profits does not come from less than say 40% of your trades, and that we have at least a few hundred trades to make the sample relevant.

Why is that? You've added a new condition now... Since about 1 out of 3 are trending days, my best trades only happen on these days and the bulk of the profits come from these trades which make up for only a small part of the profitable trades.

I'm sure you know it's highly unlikely that every profitable trade you put on, is going to be a home-runner...

PS: it would be nice if IB or Oanda kept records of your hit rate, because otherwise there is no way of knowing.

 

[BSD]

Hit rate, winning trades, ie > 0 pips / ticks / points whatever.

A scratch would in my book be a losing trade as it wasn't a winner, hmm, but if we're going down there I can tell you straight away its not going to be scalable, as scalable systems will have ever increasing slippage, and you won't be able to keep exiting at breakeven.

As for following hit rates etc, isn't there trade / account analysis software that IB offers for people wanting to set up a track record for attracting investor money.

Think Oanda had similar plans.

 

[firewalker99]

Hit rate, winning trades.
A scratch would in my book be a losing trade,

Okay, then I have to admit that I cannot produce 7 out of 10 winning trades. If the trade doesn't go in my direction quickly, I exit at breakeven and stand aside and await for a better opportunity. If this means having to get out and back in minutes later, so be it. It's how I prefer to trade, because it minimizes risk. This means sometimes I need to take three entries before the trade starts to move. It's not ideal, but I'm still refining my entries as high probability trades.

This doesn't change the fact that on the (not hypothetical) batch example I gave my losses were 30 and my profits 630 while I only lost out on 3 trades. It might not be a 70% hit rate by your definition, but I'm sure you would agree it's not bad?

but if we're going down there I can tell you straight away its not going to be scalable, as scalable systems will have ever increasing slippage, and you won't be able to keep exiting at breakeven.

That's why I said that trading huge size is a different ballgame. However, by the time you get slippage from the size, you'll probably don't care.

 

[BSD]

This doesn't change the fact that on the (not hypothetical) batch example I gave my losses were 30 and my profits 630 while I only lost out on 3 trades. It might not be a 70% hit rate by your definition, but I'm sure you would agree it's not bad?



That's why I said that trading huge size is a different ballgame. However, by the time you get slippage from the size, you'll probably don't care.

No absolutely not, it IS good, and just to reiterate, I am by absolutely no means putting down guys that make a great income off of trading AT ALL, I fully respect that !!!

OK mate, gotta go and have some fun off to Cologne what with the great weather and all.

See you later or next week.

Have a good weekend and good trading next week !!!

PS my offer is still up: Anyone who can PROVE via opening an account etc that they can do 70% winners with winners of on average three times the size of losers will have me on my knees phoning till Tudor Jones gets em a job.

What we'd expect to see with this random equity curve generator here is on average a return after 450 trades of round-about a 1000 percent.

Random Equity Curve Simulator of a trading system. Learn it before you trade

Which translates into turning a say 30K account into over 300K within a year or so, few hundred trades / year shouldn't need longer than a year or a year and half at most.

So do that, and of pestering Paul I go.

 

[foredog]

To confirm Markus' point about it being a numbers game.....

today, i'd had one breakeven and two scrappy losses, i shorted AZN as i traded through the days low at 2300, and on the open of the US it swiftly jumped up to my stoploss,

now with 4 not so great trades today i held back taking the trade in PRU going through the high at 312, now they're trading at 330.

1 trade in those 5 would've made my P&L


Trade 1 +0.005& of account
Trade 2 -0.4%
Trade 3 - 0.16%
Trade 4 - 0.27% (so far - 0.825%)
Trade 5 +1.65% (if i'd taken it)

P&L +0.825% ... i wish

 

[Depth Trade]

Open an account at say Oanda or interactivebrokers, give us the account number, trade that one year, compounding it in a way that is scalable, where you can keep compounding, ie no one pip stop losses or 5 pips take profits scalping nonsense, and then, at the end of a full year, have it show us that your hit rate is not below 70%, and that on average your rewards are not smaller than three times the size of your losers, and that unlike at the hedge funds I cited the bulk of your profits does not come from less than say 40% of your trades, and that we have at least a few hundred trades to make the sample relevant.

Then I will start pestering Mr. Tudor Jones for a job for you or anyone else who can do that, and I really mean that.

Hey BSd, give that guy a call for me. Consider it done.

 

[foredog]

Why do we do it?

Small profit there and we decide not to do what our plan say becasue we know best.

The order books thinning out and i'll lose the small turn, quick take it.

Oh crap, gone up 40p since then...muppet

 

[JTrader]

The need to be right VS the need to make money

I am learning that IMO the need to be right lends itself to - upset, lost confidence, hesitation, doubt and then missed opportunities when things are not going well

I am learning that the need to make money lends itself to - sticking to the plan even after losses and executing all valid signals. Non-emotional attachment to trades, just tally up the pips at the end.

Ego leads to the need to be right.

Where does greed fit in?

 

[BSD]

Great points guys !!!

Outrepped vs you again J ;-)

 

[FXSCALPER2]

I don't think people do what they do in order to be right. All the wrong things like taking tiny profits all the time and running losses are done because people don't know what they are doing. Imagine a situation where it is known in advance that one would win £300 30% of the time and lose £50 70% of the time. If this was known with certainty, everyone would follow the method which produces that result. This shows us that people do what they do because they really don't know what their expectancy is.