why aren't traders making 200 % a year?

[R.Charnock]

Why bother with all that backtesting rubbish. These guys can teach you to trade in 90 seconds and you'll make 70% in 60 seconds after that.

If that doesn't work I know this guy that was a prop trader for 5 years, or maybe it was 5 minutes.

http://www.trade2win.com/boards/gen...8-onetwotrade-their-fake-testimonial-s-7.html

I normally trade oil and gold, but I'd be interested in shorting props if the spreads are OK.

 

[jungerns]

Read this Trading Lessons Learned

Interesting that part of that Blog advocates a decent Stop Loss for example on the Euro/Dollar of 200-300 points for trading. Tight stops are a waste of time and if you're using S/L with only 20-30 points than you're over leveraged.....:smart:

 

[rsh01]

Tight stops are a waste of time and if you're using S/L with only 20-30 points than you're over leveraged.....:smart:

here we go

 

[The Leopard]

Interesting that part of that Blog advocates a decent Stop Loss for example on the Euro/Dollar of 200-300 points for trading. Tight stops are a waste of time and if you're using S/L with only 20-30 points than you're over leveraged.....:smart:

Well, that depends really.

I don't think one can say that tight stops are good or bad in themselves. It depends upon how they are used.

 

[the hare]

Well, that depends really.

I don't think one can say that tight stops are good or bad in themselves. It depends upon how they are used.

Exactly

 

[The Leopard]

Exactly

Thought you might agree.

Jungerns,

Very few of these things are absolute.

Take for example a high strike rate. Is that good or bad?

I would say that one cannot tell. Most people might at first glance prefer a hit rate of 70% to 35%. But there will be people who operate successfully with both. The 70% might result from a scalping strategy that produced an average net profit of 0.7 R per winning trade and an average loss of 1R per losing trade. Over a series of 100 trades on average one would lose 30R and win 49R, meaning a net gain of 19R.

The 35% might derive from a low probability reversal strategy (otherwise known as a reversal strategy ). Average net profit 4R, average loss 1R.

Over 100 trades one would lose 65R and win 140R, meaning a net gain of 75R.

So presumably it is better to win 35% of the time, because you make more money doing this than you do by winning 70% of the time? Well, it depends.

With a 35% hit rate, you're going to have some prolonged and heavy drawdowns. If you can't cope with this, you're not going to execute properly, which means you will miss the big winners necessary for the strategy to function. So which is better might not be to do win win rate or profitability, but rather to do with one's personality.

Going further, the scalping strategy is likely to produce many more trades than the reversal strategy. Some people are unable to sit on their hands sufficiently to employ strategies of that nature.

One could go on, but the point is that it is rarely a matter of black or white. It depends upon many variables.

 

[15 min tlb]

Hmm, last week.
How much for the last five years or last decade.
Christ I'd want to forwards test for 52 times longer than your backtest
At that frequency, at least 3-4 months forwards testing minimum.
Thats if spreads and comms don't kill it...

A weeks results in forwards testing means nothing.
A weeks backtest is worthless.

1 week's back test took 1 day , so in another 52 days you will have it.

All back tests can be worthless , psych i.e emotions , personality , execution etc are lacking the back testing .

1 week's forward testing will be enough.Live testing is working similarly , but other biases trades etc interfered last week , so this week is going to be a disciplined week.

 

[15 min tlb]

Starting to smell like another vendor in the making...

I will be able to offer you the system with written instructions on 1 page document , you just follow them to mega riches.

 

[15 min tlb]

Cos they are too much busy trading demo and running back tests. Can we ask you why are you not making that kind of money ? Did you imagine the guy on the other side of your trade, who would be armed to the teeth with means of manipulation, is stupid and would hand you money like an ATM ? Or did you imagine there is no one on the other side of your trade and things happen by magic ? Once you start pondering these simple questions, it will dawn on you that demo trading and back testing doesn't mean jack.

The entries don't take a directional view , as outcome of trade is unknown.The timing of entry and exit is based on going with the flow , we had 54 % hit rate , something like 12 out of 26 trades were profitable , almost coin toss entry without expecting the others to pay more.

 

[15 min tlb]

Interesting that part of that Blog advocates a decent Stop Loss for example on the Euro/Dollar of 200-300 points for trading. Tight stops are a waste of time and if you're using S/L with only 20-30 points than you're over leveraged.....:smart:

Nonsense , I use 12 and 20 pip stops and they are adequate , if you pick the right trades and entries.If you pick the right entry timing on decent trade set ups , stop levels are irrelevant.If trade fails exit quickly , and our system is designed for quick exits and re-entries.

 

[15 min tlb]

No. He's busy preping for the beginning of the forex session. He will withdraw from it as if it's an ATM. Soon he will ask for the best strategy for spending the winnings.

I had to go social for the evening ,but I will certainly look for depositing with Goldman's scam investments.

 

[15 min tlb]

Increasing leverage is going to increase volatility in returns and the risk of ruin. At the limits you can bet 0 and return 0, or bet 100% of your capital and get phenomenal returns until the first loser wipes you out. Clearly part of our job is to determine an acceptable trade off.

There's a perfectly good reason why most traders dont increase position size by a factor of 10, and why there's an upper limit of percentage returns that are sustainable over an extended period

We were looking at a risk 0f $320 per trade on a $100k account , that is 0.32 %.The game plan says , we don't increase risk to 3.2 % until the account has made 30 % profit , so all losses from increasing will be from earned profits.

 

[15 min tlb]

Why aren't they making 200% per year? Because if they aimed for results like that they'd be over leveraged and one day be wiped out. Seriously, it's not any more complicated than that.

Read this Trading Lessons Learned

Those returns can be achieved by risking 0.32 % of capital , and if there were 20 consecutive losses , maximum risk would be to 6.4 % of account.

 

[15 min tlb]

here we go

This is t2l

 

[BeginnerJoe]

I will be able to offer you the system with written instructions on 1 page document , you just follow them to mega riches.

No need to offer the system. Just offer a trading statement showing the winnings. Fabricating using photoshop is permitted. I like to make it easy for people.

 

[The Leopard]

No need to offer the system. Just offer a trading statement showing the winnings. Fabricating using photoshop is permitted. I like to make it easy for people.

 

[Trader333]

why aren't traders making 200 % a year?

I know of some that make a huge amount more than this but they are extremely rare. For most people the reality is that markets are just not inefficient enough to allow this and that is all there is to it in my view.

 

[higherSelfishness]

Soon he will ask for the best strategy for spending the winnings.

Enraptured with me, Joe?

I must say I'm flattered you would allude to me in a thread that has nothing to do with me, even if the allusion is in a negative light . . . It's good to know I'm on someone's mind.

You tried to "catch me" in a "contradiction" when I began a topic on a coin-flip system, and now you equate me with the dummy who started this thread?

What's your beef, dude?

(Or am I just being sensitive?)

 

[FringFX]

I know of some that make a huge amount more than this but they are extremely rare. For most people the reality is that markets are just not inefficient enough to allow this and that is all there is to it in my view.

Extremely rare is right.
There are athletes, non-athletes and there are super athletes.

 

[higherSelfishness]

why aren't traders making 200 % a year?

Nice blanket statement. The ones who aren't, aren't because they either don't know what they're doing, or they have a system which bears a lower capacity than 200%/year.

The ones who are, are.

Got any good leads yet on selling your system, here? Is your PM box just blowing up with "tell me more" messages? Why do you stick around defending yourself (and your "system") when you are veritably being booed off the stage?