Did you ever doubt yourself?

[Rossini]

I'm spread betting, my leverage is 9:1. My automated stop is typically 40-50 points away. If I get stopped out I lose 19.9% of my equity, but the risk reward is better than it looks since my win rate is high.

Break even on these figures is 10 wins to 1 loss, but I have always pulled the plug before my stop loss gets hit... I'm currently averaging 17 wins for each loss and losses have been between 7 and 12 points.

Looks like my current bet is not going to work for me since the index has been ranging between the top and middle Bollinger all day, so I bought on the middle Bollinger (something I never normally do - so, I taught myself the lesson for the day!!!) As soon as I did that the price tanked 20 points.

I'm going to hang on to this one though as I'm confident it's coming back up for a break even or it might even pull a profit.

Even if it doesn't do it today, I might consider rolling it since the dividend payment tomorrow will more than pay for the rollover cost.

I hate to say thats not going to work, after all that N_T's line. But mate, thats not going to work.

 

[jackolan]

thats not going to work.

What isn't? And why?

 

[Rossini]

You can only be wrong 5 times and you wiped out. And so many other reasons. Thats not to say that trading with wins smaller than losses can not be profitable but come on, can you not see what you are doing is just daft?

 

[RedGreenBen]

when you finally found the strategy for you, and you started winning, did you ever start to worry that it was all luck, and that it would all come to an end one day and you'd be back to square one??

To get back to the original question (even if the diversion has been fun)...

I doubted myself a lot more in a 'real job'. With trading you have a nice simple measure that tells you if you are any good or not. Before trading I did jobs that I was crap at, yet got promoted through luck and circumstance, so often felt that I was riding my luck.

Now I have only myself to rely on and only a PnL to judge my ability. What is there to be confused about?

Ben

 

[masnachu]

risking 40-50 pts to chip out 7pt trades.

if you think that's fine , you've no concept of risk.

 

[jackolan]

You can only be wrong 5 times and you wiped out. And so many other reasons. Thats not to say that trading with wins smaller than losses can not be profitable but come on, can you not see what you are doing is just daft?

You're not taking into account the win/lose ratio... sure, if I call it wrong 5 times on the run then I'm wiped out... but boy... I would have to be a real idiot to get it wrong 5 times on the trot, especially when my track record says I get it right 17 times out of 18.

The risk reward is satisfactory... in fact, I have often thought it is too conservative. But hell, when I started this I thought I was mad looking for a return of 2% a week!!!

 

[jackolan]

risking 40-50 pts to chip out 7pt trades.

if you think that's fine , you've no concept of risk.

I'm risking 40-50 points to chip out 119 points. If you can't do the math then you shouldn't be a trader. Or another way to look at this is I'm risking 40-50 points with a probability of 1:18 of it being taken, against a 7 point win with a 17:18 chance of it being pocketed. You own mileage on these probabilities will vary according to your skill, or lack of it.

 

[Rossini]

You're not taking into account the win/lose ratio... sure, if I call it wrong 5 times on the run then I'm wiped out... but boy... I would have to be a real idiot to get it wrong 5 times on the trot, especially when my track record says I get it right 17 times out of 18.

The risk reward is satisfactory... in fact, I have often thought it is too conservative. But hell, when I started this I thought I was mad looking for a return of 2% a week!!!

Ok, let me know if your still around in a year. I will give you flowers.

 

[Technically Fundamental]

I'm risking 40-50 points to chip out 119 points. If you can't do the math then you shouldn't be a trader.

So you've came up with a new ratio? Math:Risk?

i have one for you Logic-Longevityrofit

 

[Technically Fundamental]

What you are doing is called sytematic gambling mate. I'm not bothered like... whatever makes you happy but I'm just wondering where you're getting this 1:17 and 17:18 from? Records?

 

[dr.blix]

when you finally found the strategy for you, and you started winning, did you ever start to worry that it was all luck, and that it would all come to an end one day and you'd be back to square one??

i must admit, i haven't bothered to read through this thread, as more often than not they're nonsense.

but, responding to the original question, if you've been developing/testing your 'strategy' for a year or two, and you start trading with a good p/l ratio...then i don't think that would be luck.

if you've been messing about trading for a few weeks/months and had some gains...then yes, that's luck.

 

[masnachu]

It's pointless discussing it with him Aaronmalins, he's invincible, just let the market do it's thing.

 

[Technically Fundamental]

Im just curious.

 

[jackolan]

Ok, let me know if your still around in a year. I will give you flowers.

Thanks. :cheesy: Please make them expensive ones, my girl is quite particular!!

What you are doing is called sytematic gambling mate. I'm not bothered like... whatever makes you happy but I'm just wondering where you're getting this 1:17 and 17:18 from? Records?

Yes, records... as outlined in this post earlier in the thread.

Unless you can control the instrument you are trading in, then there will always be an element of gambling in trading. Why do you think the concept of risk reward exists when talking about trading? Precisely because the outcome is uncertain. And if the outcome is uncertain, then you are gambling.

The key to earning a profit is to reduce the chances of getting on the wrong end of a trade. This does not mean that you are aiming to have no bad trades, just that you want the overall value of your losses to be less than the overall value of your wins.

There are many ways to increase your ability to do this, fundamental analysis, technical analysis... but not one of these will offer you a 100% guarantee of winning. Therefore you are (by definition) "gambling systematically" on an uncertain outcome.

Keeping records is an essential part of this... you have to be able to measure how much you're losing against how much you're winning, and alter your money management as appropriate.

Did you think trading was something else?

"Buy low, and hope you can find someone to buy it higher!"

Jack

 

[trade4life]

To get back to the original question (even if the diversion has been fun)...

I doubted myself a lot more in a 'real job'. With trading you have a nice simple measure that tells you if you are any good or not. Before trading I did jobs that I was crap at, yet got promoted through luck and circumstance, so often felt that I was riding my luck.

Now I have only myself to rely on and only a PnL to judge my ability. What is there to be confused about?

Ben

In my view, having confidence in a methodology is only a part of the puzzle. It is a complex problem also having to do with circumstance. So, one might lose confidence in a methodology, regardless if the system is well constructed and thought out. For instance, if one is afraid of the fact that he has been diagnosed with a terrible disease, losing confidence isn't so difficult to understand. My trading plan involves making sure that I am of a positive mindset. This eliminates sometimes, the reality that when an overwhelming problem seems to face me, I don't "give up" or make lots of stupid mistakes.

 

[new_trader]

But nobody ever gets it.

Funny isn't it? As if the principles of trading change so much that the answers to the same types of questions must be unique every time. Maybe that's what system traders need, answers that change with the market...hilarious..

 

[jackolan]

So I'll ask this question a second time...

If you don't have a "system" how do you (personally) determine your entry and exit points? The flip of a coin? (Hmmm... but actually, isn't that a system?) EVERYONE has a "system"... even you.

 

[jackolan]

Unless... oh, of course... you don't actually do any TRADING... therefore you don't NEED a system

 

[new_trader]

So I'll ask this question a second time... let's see if you can provide an answer where the original person who made this comment failed...

If you don't have a "system" how do you (personally) determine your entry and exit points? The flip of a coin? (Hmmm... but actually, isn't that a system?) EVERYONE has a "system"... even you.

You should know, you appear to be doing OK with all those impressive scalps on the FTSE. But, those who know what's what, and know they know, don't need to ask 'how'...do you see? So I figure you are bluffing your way through this thread because you say a 'system' needs to change as the markets change into something else...so I dare say you will lose all your profits tomorrow or the day after...or the day after that when the market suddenly changes catching you by surprise.:-0

 

[candles]

If you're winning 10 trades out of 11, and you're prepared to acknowledge that your system works "for now" and may (will) need to change when the market changes personality... then run with it until you need to change... no system will last you for years (or even months)... just make money with what you have while you can.

How many more months of profitable trading would you say TraderDante for example has left, with trading price action at support/resistance zones? Just curious.....