51%

Anyway, having quoted you, no you can't unless he's been completely systemic which I substantially doubt.
 
>> That whole notion of having a system that's got a 51% chance of leaving you with profit (R:R 1:1)

I would presume, that having a 1:1 system, you would need to be more on par with a 60% strike rate to cover slippage, commissions and then enough to stay ahead of the game.

I use a 2:1 system. In Theory one would need a 33% strike rate to “break even”. I find over hundreds of trades that it hovers around 42%, enough to cover any slippage and commissions.

A few years back I used a 3:1, but found my strike rate to drop down to the 38% range. This meant statisically more losing trades and in reality it didn’t come out any better than 2:1. For me 2:1 suits me, but then everyone has their own thresholds that suits them.

>> I need a system that's much higher so that when I make mistakes or there's a power outage or I need the toilet or get a phone call

I found I was never really good a “discretionary” trading, and it caused more mental pain than it’s worth. I fell into systematic trading, of having a clear set of rules which had to be adherred to with no exceptions. Now when when trade you are more a robot to your rules, but as an emotional human executing them, I found I would bend the rules :) Which leads to technology. If your rules are clear and can be written down, they most likely can be turned into computer code which can then execute the trades for you. I turned my systems into computer code which now execute my rules and thus now there is no need to “watch the market”. Also I can trade multiple systems over multiple financial instruments with ease. This leads you to having more time on your hands. If you do fun things outside the market and lead an active, fulfilled life, there is very little inclination to mess with it, but just let it do it’s thing.
 
shadowninja said:
The time-frame is irrelevant. The number is all that matters.
Click to expand...

I'm not sure I agree with this.

I mean, I do in principle but time frame has to come into it!

For example, part of the criteria for a robust system is that it holds up under different market conditions.

So if you had 40 trades all taken on one day and 40 trades taken over 4 years, I would rather back the latter.

OK, it's still, perhaps, a statistically insignificant number but its at least been open to shifting market cycles. And I do think that gives it some weight.
 
In a sense and for example, a day on a 1min trigger trigger is worth x days on say a 1hr or y months/years on a 1day trigger. If you take the dramatic 2.11.62 - 1.3505 fall in cable we see many such moves of this pro rata magnitude on the 1min chart.

G/L

trader_dante said:
I'm not sure I agree with this.

I mean, I do in principle but time frame has to come into it!

For example, part of the criteria for a robust system is that it holds up under different market conditions.

So if you had 40 trades all taken on one day and 40 trades taken over 4 years, I would rather back the latter.

OK, it's still, perhaps, a statistically insignificant number but its at least been open to shifting market cycles. And I do think that gives it some weight.
Click to expand...
 
robster970 said:
If TD gives us the mean and Standard Deviation of his 45 trades, I think I can work out the likelihood of him achieving this by accident.
Click to expand...

Thank you Robster but then it's all just going to get a bit silly, isn't it?

I'm aware that a monkey can eventually come up with the random letter placement to form the complete works of Shakespeare and that no one ever made any money in this game through skill but purely by chance because for a big enough sample size there are always going to be that one wiiiiiiiiiiiiiiiiiiiiiiiiiiiii

Sorry, I fell asleep on my keyboard ;-)
 
trader_dante said:
Thank you Robster but then it's all just going to get a bit silly, isn't it?

I'm aware that a monkey can eventually come up with the random letter placement to form the complete works of Shakespeare and that no one ever made any money in this game through skill but purely by chance because for a big enough sample size there are always going to be that one wiiiiiiiiiiiiiiiiiiiiiiiiiiiii

Sorry, I fell asleep on my keyboard ;-)
Click to expand...

I don't think so as this thread is about empiricism and I was about to demonstrate that you weren't the proverbial monkey even with a sample size of 45.

Have it your way then, I'll take my calculator off somewhere else.
 
robster970 said:
I don't think so as this thread is about empiricism and I was about to demonstrate that you weren't the proverbial monkey even with a sample size of 45.

Have it your way then, I'll take my calculator off somewhere else.
Click to expand...

Bring your calculator to the next seminar when Dentist arranges it :)
 
robster970 said:
On a slight detour, I thought me and DonaldDuke were coming round to your house to watch all your ladders and your 'Carry On Film' collection...
Click to expand...

come around on Friday! Can you make North Greenwich tube for 6:20am?

(p.s. It's not a 'Carry On Film' collection. It's hardcore pornography. Sorry for any misunderstanding)
 
shadowninja said:
And to be honest, this whole notion of "it's a probability game" is, frankly, nonsense.
Click to expand...

Go and play some poker and try to understand that there is a very fine line between gamble and skill. That line is never still, always moving in a constant change due to every hand being played.
If you gamble ie. all in, over the long term, you will not survive; if you use your skill, you will last longer because you will know when to fold and when to attack. it is a probability game.

In trading, it is the same!
 
Dante, do you have any open trades? For all we know you could have some open with Spanish stops that have gone thousands of points offside.... ;-) Just kidding. 89%...... Good work. Even if it is only 45 trades that's still good!!!

Sam.
 
Well Muel, he said it's 0.5R, so you could be right, he's just getting 50% movement in his instruments...long term options could still fit the bill I guess.
 
megamuel said:
Dante, do you have any open trades? For all we know you could have some open with Spanish stops that have gone thousands of points offside.... ;-) Just kidding. 89%...... Good work. Even if it is only 45 trades that's still good!!!

Sam.
Click to expand...

lol No Megamuel, the strategy puts a fixed stop in on every trade that is simply 2 X the target.
 
trader_dante said:
lol No Megamuel, the strategy puts a fixed stop in on every trade that is simply 2 X the target.
Click to expand...

When you say "the" strategy, is this your strategy? So, do I understand this correctly, you are now going for a high win rate, small profit strategy? Isn't this a 180º flip from what you used to advocate? Perhaps I should follow you on twitter so I can keep up with your weekly strategy recommendations :LOL:
 
Agree with some previous posts on this thread

a. R:R has to be viewed in the context of strike rate.
b. It would seem that the higher the strike rate the more difficult it is to achieve > 1:1 R:R, but not impossible.
c. Expectancy is key, ie over any sample of trades beit a week, month, year or a specified representative numver, do you have a positicve expectancy to your trading edge/your execution of it.

G/L
 
bbmac said:
Agree with some previous posts on this thread

a. R:R has to be viewed in the context of strike rate.
b. It would seem that the higher the strike rate the more difficult it is to achieve > 1:1 R:R, but not impossible.c. Expectancy is key, ie over any sample of trades beit a week, month, year or a specified representative numver, do you have a positicve expectancy to your trading edge/your execution of it.

G/L
Click to expand...

I'm not sure why anyone thinks this way. This presupposes that a trader determines their strike rate first. This is the common mistake system/mechanical traders make and doesn't factor in the way a discretionary trader approaches things. It would be like a football team aiming for a 90% win rate before the season starts but ends up winning only 75% of them, and a football team that tries their best to win every game and ends up winning 100% by the end of the season. I do my best to win every trade I enter. Possible or not is irrelevant.
 
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