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  • #521
  • Dec 31, 2011 2:07am Dec 31, 2011 2:07am
Quoting the redlion
to add to that, when shorting...the same mechanism is applied but now using the Average High Range that yields the greatest chance of scenario below open.
and what i stated above as for trading long would be the same as shorting but price entrances would be adjusted to attempt to short at best possible price to mitigate risk aka selling rallies.
i dont think it ever gets more professional than this Red. very well calculated probabilities as always. but is it too hard when trading? or do you usually plan first the formulas? or do you go as you trade?
Have I got something on my face, SOLDIER?
  • #522
  • Dec 31, 2011 2:56am Dec 31, 2011 2:56am
it's really not that hard (for me), basically i spent a good amount of time, learning to ANALYSE price, and now i am spending the same amount of time analyzing risk.

($ per pip)(number of pips)/ account size is your risk exposure.
so for a desired exposure then you figure out leverage size to use.

and i have concluded that no matter what $ you have on your account.
the net leverage size always remains constant.
1:3=1000:3000
=2000:6000
=3000:9000
=100,000:300,000........

now when performing statistics on a big data set, there are 5 points of data you are looking for.

minimum,1st Quartile, Average,3rd Quaritle, and maximum.
minimum= the absolute minimum value ever
1st quartile= 25% of events fall below this
Average= the Average of value (mean x/n, mode is by frequency of event, median is by midpoint, you decide what suits you best)
3rd quartile= 25% of data falls above this
Maximum= the absolute maximum value ever.

so then how did i determine my 61 pip stop? is because that is the average low range so i ran statistics and seems to be a crucial point. as statistics indicate.

(i am not using this information to trade, so i am not cluttering my chart reading skills concerned on all the data i found, i am using it strategically for money management)

as i said above, if my analysis of price movement, indicate that there is more of a positive expectancy to open long positions (remember i only trade in one direction, due to mathematical probabilities) then my stop will be a rigid 62 pip stop below open. as statistics indicate that i would be a fool and would be going against objective data, once my stop is triggered as price will no longer close above open, which is what my assessment of market indicated thus long positions where opened.

so now, i would have to analyse whether i continue to trade, or will sell rallies now.

with a rigid stop above open at distance of 62 pips as well as the evidence is overwhelming on the similarity of distribution.

do i make more sense now, or should i explain further?
AVT INVENIAM VIAM AVT FACIAM
  • #523
  • Dec 31, 2011 3:21am Dec 31, 2011 3:21am
now as Aaronward pointed out earlier the best risk management is good entrance, so using this strategy risk can decrease with a good entrance but is capped at 1.86% if using 1:3 leverage (which in my opinion is the maximum prudent leverage for an initial position)

however if the entrance is > than the open price to reduce risk, you simply decrease the leverage.

(my money management is based Solely on RISK management) my reason for entering the market on my chart reading skills
AVT INVENIAM VIAM AVT FACIAM
  • #524
  • Edited 4:53am Jan 2, 2012 4:34am | Edited 4:53am
Quoting Chicky
Yes, I just got time to check the thread and am surprised at the number of posts. Will read all of them later.

Not one, but three things are wrong with my trades.

1. Entries
2. SL / TP positions
3. Timing of trades

However, I take blame only for number 2 above. I have no time for 1 and 3 unless I lower minimum pip limit from 60 to let's say 20 or 30. I can enter and conclude a 20 to 30 pip trade in few hours. But 60 to 250 pip trades require keeping an eye on all three sessions which I cannot afford.

My sl and tp positions have...
i have bit deferment view, you getting bad tp & sl due to your early entry. if you place pending then you can overcome this issue [My way or no way]

i am always one big doubt
Should SL placed @ level it will save the trade or Stick with risk policy ?
most of of the time i have stick with rule for my SL , but it's annoying me when price move just to touch my sl.
Mohan
  • #525
  • Jan 2, 2012 5:39am Jan 2, 2012 5:39am
great thread. just got a few questions/comments

statistically, would it be feasible to risk 2% instead? it seams like 50 consecutive losses is highly unlikely with a 60% overall win rate.

also, what do you guys think about reducing the position size by 50% once price reaches 50% retracment from you entry toward your stop? there will obviously be times when price will turn around and become a wining trade, but most of the times, it will likely continue in that direction to a loss. reducing the position size by half when it is half way to a loss would give a better statistical edge in the long run.
  • #526
  • Jan 2, 2012 5:59am Jan 2, 2012 5:59am
Quoting jowsom
great thread. just got a few questions/comments

statistically, would it be feasible to risk 2% instead? it seams like 50 consecutive losses is highly unlikely with a 60% overall win rate.

also, what do you guys think about reducing the position size by 50% once price reaches 50% retracment from you entry toward your stop? there will obviously be times when price will turn around and become a wining trade, but most of the times, it will likely continue in that direction to a loss. reducing the position size by half when it is half way to a...
main reason chicky choose 1% risk is to accommodation this policy
"trade should not give stress to trader" if you can remain ice cool when 2% sl hit 5 or 10 trade in a raw, why not.
Mohan
  • #527
  • Jan 2, 2012 9:16am Jan 2, 2012 9:16am
Quoting the redlion
-------
62 pip stop from daily open at 1:3 leveraged = 1.83% of account risk no matter the size.
This is correct only if you trade USDUSD otherwise the currency quote must be factored in any leverage calc.

For EURUSD at quote 1.3, leverge is 3*1.3=3.9 and for GBPUSD at quote 1.5 leverage is 4.5, if 62 pip stop equates 1.83% acct risk. Only for AUDUSD at quote 1.02 would leverage be 3 (or 3.06 to be exact)

It makes little difference so long as you are far from margin call but why not use math correctly?

Rgs
  • #528
  • Jan 2, 2012 9:29am Jan 2, 2012 9:29am
Quoting Baifu
This is correct only if you trade USDUSD otherwise the currency quote must be factored in any leverage calc.

For EURUSD at quote 1.3, leverge is 3*1.3=3.9 and for GBPUSD at quote 1.5 leverage is 4.5, if 62 pip stop equates 1.83% acct risk. Only for AUDUSD at quote 1.02 would leverage be 3 (or 3.06 to be exact)

It makes little difference so long as you are far from margin call but why not use math correctly?

Rgs
i calculated a 61 pip stop instead of a 62 pip stop at 62= 1.86% you are right, inputted the wrong value, thanx.

like you said is of little importance.
AVT INVENIAM VIAM AVT FACIAM
  • #529
  • Jan 2, 2012 9:54am Jan 2, 2012 9:54am
Quoting the redlion
here is some more stats Chicky, since inception,

64.84% of the time when price fails to break previous high closes below open
65.65% of the time when price falls below prev low it closes below open

these are statistical facts obtained over 2854 trading days
Redlion

This is all cool stuff. Keep them coming. How are you compiling these statitics? Some kind of EA?
Kill the ego, or it will kill the mission.
  • #530
  • Jan 2, 2012 10:03am Jan 2, 2012 10:03am
Quoting AaronWard
Redlion

This is all cool stuff. Keep them coming. How are you compiling these statitics? Some kind of EA?
no, by R.

i can get statistics on anything in minutes. thousands of data sets are analysed pretty effortlessly.

took me a week to learn the language programming but, it was worth it.
AVT INVENIAM VIAM AVT FACIAM
  • #531
  • Jan 2, 2012 10:22am Jan 2, 2012 10:22am
Quoting the redlion
no, by R.

i can get statistics on anything in minutes. thousands of data sets are analysed pretty effortlessly.

took me a week to learn the language programming but, it was worth it.
R? a name of a programing language?
Kill the ego, or it will kill the mission.
  • #532
  • Jan 2, 2012 10:26am Jan 2, 2012 10:26am
Quoting AaronWard
R? a name of a programing language?
Yes R, is actually a well known statistic tool.

that is the name of the program, and it works by input of data, and operations through programming language.

example, to get the total number of closes of the euro since inception first you input the closes.

>close<-scan()
1- (here you paste it)

then to see the actual length of data set is

>length(close)
[2856]

do a google search it is a free program, the most challenging part is learning the language commands.
AVT INVENIAM VIAM AVT FACIAM
  • #533
  • Jan 2, 2012 10:28am Jan 2, 2012 10:28am
Quoting the redlion
Yes R, is actually a well known statistic tool.

that is the name of the program, and it works by input of data, and operations through programming language.

example, to get the total number of closes of the euro since inception first you input the closes.

>close<-scan()
1- (here you paste it)

then to see the actual length of data set is

>length(close)
[2856]

do a google search it is a free program, the most challenging part is learning the language commands.
Great, thanks, it is on my (very long) to do list.
Kill the ego, or it will kill the mission.
  • #534
  • Jan 3, 2012 11:31pm Jan 3, 2012 11:31pm
We try several trading methods before selecting few. However, its always good to revisit discarded methods to see if we make them work with new knowledge and skills.

I was trying to figure out why I discarded 1:10 (or 1:5) risk/reward ratio trades. If one has no real edge, with 1:1 risk/reward ratio 50 out 100 trades would be winners and equal number of losers. With 1:10 risk/reward ratio 10 out of 100 trades should be winners. The end result would be the same, however, with 1:10 risk/reward, if first few trades are winners, it would increase the trader's operating capacity.

Found these four reasons why I did not adopt 1:10 (or any other less risk:high reward method).

1. If my sl is 100 pips, it would require 1,000 pip trade to get a winner. Similarly if my sl is 50 pips, only a 500 pip trade would get me a winner. Those moves are infrequent.

2. I won't be able to go for 50 to 100 pip trades, because normal market noise would keep on hitting my few pip sls. Also, any small or big news release volatility would knock me out. Then again pa moves several pips in either direction before opening or close of a session (NY, London, Tokyo, Frankfurt, etc)

3. It would require a lot of screen time in order to get on board a good opportunity or re-enter for the next attempt. A lost opportunity would mean another long wait.

4. 10% to 20% retraces are very normal. Some even consider 50% retrace a normal retrace. With 1:10 to 1:5 risk/reward market would throw me out of the trade on a normal retrace of 10% to 20%.
The Thief of Wall Street
  • #535
  • Jan 5, 2012 11:43pm Jan 5, 2012 11:43pm
Quoting Chicky
Trade #60. Just entered. Long for 160 pips
Trade# 60 hit sl. Loss 1%. There should be no excuses for a loss but as mentioned earlier, tp was poorly placed near that blue dotted line. It should have been a bit lower, that is, below last High.

Waiting for a bounce opportunity. Missed one tonight while at gym. No problem, there will be another.
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The Thief of Wall Street
  • #536
  • Jan 6, 2012 12:02am Jan 6, 2012 12:02am
Trade #61. Long for 70 pips.
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The Thief of Wall Street
  • #537
  • Jan 7, 2012 7:28am Jan 7, 2012 7:28am
for Chicky The Great

Inserted Video



AS
  • #538
  • Jan 7, 2012 11:33am Jan 7, 2012 11:33am
Quoting simpleman
for Chicky The Great

http://www.youtube.com/watch?feature...S_59Cjwuk#t=1s


AS
Inserted Video
The Thief of Wall Street
  • #539
  • Edited 12:12pm Jan 7, 2012 12:01pm | Edited 12:12pm
Quoting Chicky
Trade #61. Long for 70 pips.
Trade #61 hit sl. 1% loss.

Trade #62 entered and running. Long for 60 pips.

SL of trade 61 was just above a resistance (yellow line) and was very much expected to hit sl with this strong down move, which it did. Providing an opportunity to re-enter at the sl level with a lesser number of pip trade. Will continue longing this pair and taking 1% losses until a major retrace gives 3 to 4 consecutive winners when pa repeatedly bounces off from a strong support and probably a couple of more winners when it shows a decent retrace.

Risk is part of the game but fear should not be. Risk is what you are willing to give up for a possible gain but fear comes from if you don't know what you are doing. Let thrill be there but not fear.

I think the win/loss ratio after 61 trades is 50:50. This little over 1% realized profit you see is the temporary loan from the market to be paid back in spread.
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The Thief of Wall Street
  • #540
  • Jan 7, 2012 1:28pm Jan 7, 2012 1:28pm
Quoting Chicky
http://www.youtube.com/watch?v=X1LV0iO1NH8
good one
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