DislikedI like that chart Josh and have used it myself.
The only caveat I add with thes figures is that sometimes we plot our previous live trades, demo trades, backtested trades or whatever against this formula and we come up with very precise figures regarding expectancy and the percentage of a certain drawdown and the percentage of a losing streak.
It's an incredibly useful tool and I use it a lot but I think it can give us a reassurance that can be misleading.
We are discretionary traders here. We don't trade moving average crossover systems,...Ignored
Great post as always, I knew of 2 people that could chart better then anyone I have ever seen. They would spend like 2-3 hours with lines and all this good stuff but they never made money, I would trade the charts I had no idea what it was saying but I knew if it looked short or long and I did well. These people used to work for huge firms Merrell and the other was UBS and would give the charts to others to trade. They both quit and tried to do trade but they would freak out everytime they opened a trade and screw up all the rules... Funny thing is they both now run a large hedge fund and do well trading others money lol. Sorry for the long rant I just have seen 1st hand what happens when you think too hard and it seems the more time you spend telling yourself that "This is the one" the more you get attached to it and become emotionaly involved with the trade, then if it goes bad you think you failed.
Keep taking CT trades, I need more money