Hey there,
My trading style is a mix of statistics (probabilities) and basic 'go with the trend enter on the dips' (Entry being at support and resistance levels)
It works pretty well, earn around 100-150 pips a month, but I'm trying to learn more about how it works.
I basically know before any trade what my probability of winning is, my take profit, my stop loss. Everything is planned from the get-go.
I'm only profitable though because I know the long run probability of each support/resistance pattern I trade (I combine this with money management).
I use the below formula
Expectancy of all trades = Average Win (Probability of a win) - Average Loss (Probability of a loss) - Spread
As long as Expectancy is a good deal above 0 (I like to allow lots of room for error) then I'm happy.
But I'd like to research this idea more, does anyone know any good threads, books or articles that specialise in this field? Maybe not so much on specific trading strategies but more focusing on the long run probabilities of different trading opportunities.
Cheers,
Scotty
p.s. If you don't think probabilities are the way to trade, I wish you all the best in your trades but this isn't the thread for a debate
My trading style is a mix of statistics (probabilities) and basic 'go with the trend enter on the dips' (Entry being at support and resistance levels)
It works pretty well, earn around 100-150 pips a month, but I'm trying to learn more about how it works.
I basically know before any trade what my probability of winning is, my take profit, my stop loss. Everything is planned from the get-go.
I'm only profitable though because I know the long run probability of each support/resistance pattern I trade (I combine this with money management).
I use the below formula
Expectancy of all trades = Average Win (Probability of a win) - Average Loss (Probability of a loss) - Spread
As long as Expectancy is a good deal above 0 (I like to allow lots of room for error) then I'm happy.
But I'd like to research this idea more, does anyone know any good threads, books or articles that specialise in this field? Maybe not so much on specific trading strategies but more focusing on the long run probabilities of different trading opportunities.
Cheers,
Scotty
p.s. If you don't think probabilities are the way to trade, I wish you all the best in your trades but this isn't the thread for a debate