So pretty much everyone here spouts the same thing. But, almost everyone here is a losing trader. If you had a 50% win rate and 1:2 rr you would make a ton of money. Even at 40% you would still be very profitable, and at 35% you're still a winner. So why doesn't it work? Or maybe a better question is why are so few traders profitable with this strategy? Are they trading on way too short a time frame, or they just can't actually let winners run and end up taking profits closer to 1:1 and then moving their stops to break even? This strategy seems like a slow painful drain of an account.
One thing I noticed was that many times these stops are hit both ways. It didn't matter if the trader went long or short when they entered the position, their tight stop would have been hit in both directions before the market went on to make a move.
Do Hedge Funds and traders at bank desks trade this way? I don't know, but I find it hard to imagine that they do. They probably enter a trade using whatever information they have at their disposal and then trust themselves to manage it as new information (technical or fundamental) becomes available.
One thing I noticed was that many times these stops are hit both ways. It didn't matter if the trader went long or short when they entered the position, their tight stop would have been hit in both directions before the market went on to make a move.
Do Hedge Funds and traders at bank desks trade this way? I don't know, but I find it hard to imagine that they do. They probably enter a trade using whatever information they have at their disposal and then trust themselves to manage it as new information (technical or fundamental) becomes available.
