Risk Reward Myth

[theroguetrader]

Okay, I'll bite.



You talk absolute nonsense. Breaking even is not success.



Now you get to the point. Except we can't be successful trading in fantasy land where spreads, commission, slippage, fast markets, order entry errors, and vig do not exist. These costs exist, so hypothetical scenarios which don't include them are useless in the real world. (and a good indication that the person talking such a hypothetical is either deliberately blowing smoke or doesn't have a clue)



What prevents most people from making money in the market is that they do not know where to trade and why. Whether they trade frequently or infrequently simply dictates how much vig they pay and is a factor in how quickly they blow up. "Junk signals" and "noise" - what nonsense you talk. A trader making an error or getting it wrong is not the fault of the market, noise, junk, or anything else.


This is a correct statement.

As for your chart, let me draw you another one. Easy to say you bought the pin bar in hindsight. How do you know whether to take profit at 1R, 2R, or 3R?

Isn't a double top a valid sell signal? So when Joe Wanabee sells short there, he is wrong no matter what. Whether he sets his fantasy target to 1,2,3 or 5R doesn't matter - the market is never going there without stopping him out first. This is why made up R:R is irrelevant.


What is wrong with this site and trading sites in general is that every idiot spouts off like a know it all. You set yourself up to be flamed by going around telling everyone what THE MOST IMPORTANT THING IN TRADING is according to your own limited point of view. The real shame is that some people choose to believe this without taking the effort to think for themselves. Totally useless and a waste of time.



Anyone who goes around preaching this as though it is gospel is suspected of having a room temperature IQ. I've made this point five or six times in different ways in as many days on this site. It seems as though people are determined to be dumb losers who don't think, don't improve, and ultimately don't profit in the markets. Their choice.

I'll leave the incurably deluded to their risk:reward ratios. Whatever makes you happy.

TOTALLY CORRECT - break - even is NOT success !! - The pressure is completely off tho and you can look at your trade analytically WITHOUT any emotions clouding your judgement !!

if your trading a " well defined/confluent " pin bar in either direction - even if the trade goes DOWN THE PAN - the price will still get to the end of the pin before pulling back - so if you enter at say the 50 % level - you make a profit ANYWAY !!

" How do you know whether to take profit at 1R, 2R, or 3R "......??

You can take a profit at ANY POINT on the pin - all your doing is altering the risk by entering on different positions on the pin .. !! -
Im saying your " PROFIT TARGET " should me meausured in MULTIPLES OF YOUR RISK - NOT " swinging for the fences " - like MOST people do ... !! (GREED)

 

[TheBramble]

No need to apologise to the special class who can do this.
Maybe take a look at - http://web.archive.org/web/20050707013433/http://marketmonk.blogs.com/pmtc/
$5k to over $8 million in six weeks trading the emini with Gann / price and time structure.

There is a chap who used to post here by the name of fudgestain who completely kills the futures markets using price and time. There are many others. Evidently you are not successful as you do not believe success is possible.

If it was possible, why haven't you turned yourself into Croesus?

A rambling, disjointed and illogical response. But I’ll do my best to make sense of your delirium for the benefit of those who don’t know who you are.

Gannites/Ellioticians a special class? Undeniable, but not in the way you suggest. A large class of successful traders? Unlikely. You state there are many others. Who? Don’t dodge. Name names to we can confirm your claims.

The only ones who have ever claimed to be experts in the field write books about it which convey nothing of utilitarian value. That’s true of most gurus who write books on any subject so no special insight there. That some may be genuine experts and that it may be a genuine technique is of course possible, but extremely unlikely.

Was I successful using Gann/Elliot techniques? No. Of course not. Never got the hang of how anyone could seriously consider it as a viable trading methodology given its infinite divergences, exceptions and modifications which explain away every event – after the event and to be fair, even when I discovered it lacked sufficient credentials to warrant further study, never felt the need to expend the effort necessary to empirically invalidate it either.

Where did you get the view that I consider success per se as impossible? I am, successful in making money using more traditional and basic trading techniques as have been documented, albeit infrequently, in the posts on this site. Posts with which you are well acquainted I suspect.

$5k to over $8 million in six weeks trading the emini with Gann / price and time structure.

LOL

That you’re not a new member to this site and claim knowledge of a member who hasn’t posted for a couple of years is no surprise to me. That it is to the mods, and that you are still here, is a surprise.

You may want to augment your provenance with this site by mentioning the nature of Fudgestain’s off-site activities and why when Mr. Marcus blew the whistle on him he disappeared forever.

$5k to over $8 million in six weeks trading the emini with Gann / price and time structure.

Some things never change.

Take care.

 

[theroguetrader]

Okay, I'll bite.



You talk absolute nonsense. Breaking even is not success.



Now you get to the point. Except we can't be successful trading in fantasy land where spreads, commission, slippage, fast markets, order entry errors, and vig do not exist. These costs exist, so hypothetical scenarios which don't include them are useless in the real world. (and a good indication that the person talking such a hypothetical is either deliberately blowing smoke or doesn't have a clue)



What prevents most people from making money in the market is that they do not know where to trade and why. Whether they trade frequently or infrequently simply dictates how much vig they pay and is a factor in how quickly they blow up. "Junk signals" and "noise" - what nonsense you talk. A trader making an error or getting it wrong is not the fault of the market, noise, junk, or anything else.


This is a correct statement.

As for your chart, let me draw you another one. Easy to say you bought the pin bar in hindsight. How do you know whether to take profit at 1R, 2R, or 3R?

Isn't a double top a valid sell signal? So when Joe Wanabee sells short there, he is wrong no matter what. Whether he sets his fantasy target to 1,2,3 or 5R doesn't matter - the market is never going there without stopping him out first. This is why made up R:R is irrelevant.


What is wrong with this site and trading sites in general is that every idiot spouts off like a know it all. You set yourself up to be flamed by going around telling everyone what THE MOST IMPORTANT THING IN TRADING is according to your own limited point of view. The real shame is that some people choose to believe this without taking the effort to think for themselves. Totally useless and a waste of time.



Anyone who goes around preaching this as though it is gospel is suspected of having a room temperature IQ. I've made this point five or six times in different ways in as many days on this site. It seems as though people are determined to be dumb losers who don't think, don't improve, and ultimately don't profit in the markets. Their choice.

I'll leave the incurably deluded to their risk:reward ratios. Whatever makes you happy.

" Except we can't be successful trading in fantasy land where spreads, commission, slippage, fast markets, order entry errors, and vig do not exist " - all wonderfull excuses for people who refuse to see whats in front of their eyes -

" set & forget " - !! - its not orbital mechanics dude, its only trading !!

 

[theroguetrader]

Okay, I'll bite.



You talk absolute nonsense. Breaking even is not success.



Now you get to the point. Except we can't be successful trading in fantasy land where spreads, commission, slippage, fast markets, order entry errors, and vig do not exist. These costs exist, so hypothetical scenarios which don't include them are useless in the real world. (and a good indication that the person talking such a hypothetical is either deliberately blowing smoke or doesn't have a clue)



What prevents most people from making money in the market is that they do not know where to trade and why. Whether they trade frequently or infrequently simply dictates how much vig they pay and is a factor in how quickly they blow up. "Junk signals" and "noise" - what nonsense you talk. A trader making an error or getting it wrong is not the fault of the market, noise, junk, or anything else.


This is a correct statement.

As for your chart, let me draw you another one. Easy to say you bought the pin bar in hindsight. How do you know whether to take profit at 1R, 2R, or 3R?

Isn't a double top a valid sell signal? So when Joe Wanabee sells short there, he is wrong no matter what. Whether he sets his fantasy target to 1,2,3 or 5R doesn't matter - the market is never going there without stopping him out first. This is why made up R:R is irrelevant.


What is wrong with this site and trading sites in general is that every idiot spouts off like a know it all. You set yourself up to be flamed by going around telling everyone what THE MOST IMPORTANT THING IN TRADING is according to your own limited point of view. The real shame is that some people choose to believe this without taking the effort to think for themselves. Totally useless and a waste of time.



Anyone who goes around preaching this as though it is gospel is suspected of having a room temperature IQ. I've made this point five or six times in different ways in as many days on this site. It seems as though people are determined to be dumb losers who don't think, don't improve, and ultimately don't profit in the markets. Their choice.

I'll leave the incurably deluded to their risk:reward ratios. Whatever makes you happy.

" A trader making an error or getting it wrong is not the fault of the market, noise, junk, or anything else "... !!

Your right, its not, but if " the trader " takes the time to learn some basic " price action set ups " - waits PATIENTLY for their edge to appear, because they know EXACTLY what theyre looking for - and then calmly take the trade - they wont make so many mistakes by taking RANDOM entries through OVER TRADING will they ? !!

 

[hoodoo man]

That you’re not a new member to this site and claim knowledge of a member who hasn’t posted for a couple of years is no surprise to me. That it is to the mods, and that you are still here, is a surprise.

You may want to augment your provenance with this site by mentioning the nature of Fudgestain’s off-site activities and why when Mr. Marcus blew the whistle on him he disappeared forever.

Fudgestain posts as Cheese on Elite Trader. What were his off-site activities?

 

[TheBramble]

Fudgestain posts as Cheese on Elite Trader. What were his off-site activities?

You claimed knowledge of his postings on this site. Don't try and divert attention from your prior activities on this site under your original name.

You know full well what his offsite activities were, why Mr. Marcus outed him and why he fled with his tail between his legs.

Now, respond to my other queries or if you prefer, we'll let them rest as I take no pleasure in kicking a man when he’s down, even you. But if you engage me again, make sure you’re prepared as I won’t be so gentle next time.

 

[hoodoo man]

You claimed knowledge of his postings on this site. Don't try and divert attention from your prior activities on this site under your original name.

You know full well what his offsite activities were, why Mr. Marcus outed him and why he fled with his tail between his legs.

Now, respond to my other queries or if you prefer, we'll let them rest as I take no pleasure in kicking a man when he’s down, even you. But if you engage me again, make sure you’re prepared as I won’t be so gentle next time.

His activities, my activities? My original name? I'm not fudgestain / cheese.
The only thing I can find with fs and Mr. Marcus is this post:
http://www.trade2win.com/boards/t2w-announcements/17924-banned-members.html#post224603 Neither of them post here any more, but they both joined in the same month and year. Interesting.

Kicking me when I'm down? It is good to hear that you don't take pleasure in that, but I do think you have me confused with somebody else. Maybe you've stayed in this place a little too long ha ha

 

[TheBramble]

Any chance you'll respond to my queries or will you just sidle off, again?

Each of your posts has fewer and fewer words and less and less bluster.

 

[theroguetrader]

Okay, I'll bite.



You talk absolute nonsense. Breaking even is not success.



Now you get to the point. Except we can't be successful trading in fantasy land where spreads, commission, slippage, fast markets, order entry errors, and vig do not exist. These costs exist, so hypothetical scenarios which don't include them are useless in the real world. (and a good indication that the person talking such a hypothetical is either deliberately blowing smoke or doesn't have a clue)



What prevents most people from making money in the market is that they do not know where to trade and why. Whether they trade frequently or infrequently simply dictates how much vig they pay and is a factor in how quickly they blow up. "Junk signals" and "noise" - what nonsense you talk. A trader making an error or getting it wrong is not the fault of the market, noise, junk, or anything else.


This is a correct statement.

As for your chart, let me draw you another one. Easy to say you bought the pin bar in hindsight. How do you know whether to take profit at 1R, 2R, or 3R?

Isn't a double top a valid sell signal? So when Joe Wanabee sells short there, he is wrong no matter what. Whether he sets his fantasy target to 1,2,3 or 5R doesn't matter - the market is never going there without stopping him out first. This is why made up R:R is irrelevant.


What is wrong with this site and trading sites in general is that every idiot spouts off like a know it all. You set yourself up to be flamed by going around telling everyone what THE MOST IMPORTANT THING IN TRADING is according to your own limited point of view. The real shame is that some people choose to believe this without taking the effort to think for themselves. Totally useless and a waste of time.



Anyone who goes around preaching this as though it is gospel is suspected of having a room temperature IQ. I've made this point five or six times in different ways in as many days on this site. It seems as though people are determined to be dumb losers who don't think, don't improve, and ultimately don't profit in the markets. Their choice.

I'll leave the incurably deluded to their risk:reward ratios. Whatever makes you happy.

" Whether he sets his fantasy target to 1,2,3 or 5R doesn't matter - the market is never going there without stopping him out first. This is why made up R:R is irrelevant " ... !!

thats a " fantasy statement " ... !! how can those be " fantasy targets " ? - if the price gets to R1, the risk has been eliminated !! - If your trade cant get even get to R1 - you entered at the wrong place - simple !!
If you learn to read the price action the RIGHT WAY - youll KNOW where to trade & why .. !!

 

[hoodoo man]

Any chance you'll respond to my queries or will you just sidle off, again?

Each of your posts has fewer and fewer words and less and less bluster.

What queries? Yes, you're noticing I'm getting tired of this. You make vague references to offsite activities of another poster, imply that I am him, keep going on about another guy "outing" someone. Do you want to tell me what you were going on about or not?

 

[TheBramble]

His activities, my activities? My original name? I'm not fudgestain / cheese.
The only thing I can find with fs and Mr. Marcus is this post:
http://www.trade2win.com/boards/t2w-announcements/17924-banned-members.html#post224603 Neither of them post here any more, but they both joined in the same month and year. Interesting.

Kicking me when I'm down? It is good to hear that you don't take pleasure in that, but I do think you have me confused with somebody else. Maybe you've stayed in this place a little too long ha ha

Good to see you know your way around.

 

[TheBramble]

What queries? Yes, you're noticing I'm getting tired of this. You make vague references to offsite activities of another poster, imply that I am him, keep going on about another guy "outing" someone. Do you want to tell me what you were going on about or not?

The queries in my earlier post which you are nervously avoiding.

I’m not implying you are fudgestain at all. Most of us old hands are all too well aware of who you are (were). That the mods allow you to remain, while they allow you to remain, is for their own pleasure, and a bit of payback I susect as you squirm.

As for what I am going on about, please refer to my earlier, longer post - or not.

 

[hoodoo man]

The queries in my earlier post which you are nervously avoiding.

I’m not implying you are fudgestain at all. Most of us old hands are all too well aware of who you are (were). That the mods allow you to remain, while they allow you to remain, is for their own pleasure, and a bit of payback I susect as you squirm.

As for what I am going on about, please refer to my earlier, longer post - or not.

I've asked you twice what queries. I've no beef with the mods - payback for what? You're obviously a troll who won't put up or shut up.

 

[TheBramble]

Side step. Ignore. Divert.

Anything but answer the questions.

Your credibility is about the same as it was when you exited stage left last time. Zero.

Don’t waste any more of my time.

 

[hoodoo man]

Side step. Ignore. Divert.

Anything but answer the questions.

Your credibility is about the same as it was when you exited stage left last time. Zero.

Don’t waste any more of my time.

What question? Ask it again. Don't keep making vague references. This is getting boring.

 

[TheBramble]

Read my earlier post. Answer the questions or not. I really don't think you will, nor do I care. Nor does anyone else.

Last post to you on this subject.

I'll let you wriggle out....

 

[hoodoo man]

Read my earlier post. Answer the questions or not. I really don't think you will, nor do I care. Nor does anyone else.

Last post to you on this subject.

I'll let you wriggle out....

I'd like to see you say that to my face.
Go around looking to cause trouble do you?
Make up innuendos, then when challenged directly don't state any facts or ask any questions, but imply that someone is wriggling.

You will not state a question. That is the game isn't it? Why won't you answer my question? What do you have to hide.

 

[Atilla]

I'd like to see you say that to my face.
Go around looking to cause trouble do you?
Make up innuendos, then when challenged directly don't state any facts or ask any questions, but imply that someone is wriggling.

You will not state a question. That is the game isn't it? Why won't you answer my question? What do you have to hide.

Mr Hoodoo man you are back again banging your drum about RR...

In my humble opinion - to me, RR means the probability of the trade should be in your favour. It is an indication or a target.

On the whole it goes without saying one should look towards making more money than losing. Risk < Reward factor is what ever you want to make it in your trading. BUT it has to be Risk < Reward!

I doubt anyone favours a trade where they could lose more than they can gain if they don't see any edge in their favour.

I'm confused as puke in hell how anybody can argue about abstract RR mumbo jumbo stuff just to make your self out to be some bleeding expert opinion on a thread because you turned $10K to $40K on a demo account using your trading system.

I'll tell you something about your psychology which is an ultimate flaw in your trading ability imo. - You can not tollerate being wrong or even to be perceived to be wrong. You must always be right otherwise you become disturbed and imbalanced. There is no charge to this piece of advice but I'm happy to accept donations from your $40K portfolio when you realise its real value...

If a trade is going against you and you are short - have you ever closed your position and went long? Personally I struggled a lot with this but find I'm doing it more often.
I learnt it that lesson from Fireworks but sadly he no longer visits this site.

Do you ever say - pooh bear, I've got this one wrong I better change my perspective.


Also like all the instruments and indicators out in the big wide world any one can build their own R:R factor into their trading system and not necessarily wait for either to be hit but take the exit at market levels.

R:R is here to stay and anyone who argues against it is chasing their tail to make an obtuse point. Maybe an interesting point but three quarters of this thread is all ego **** and the other quarter useful stuff to reflect on.


Typical from your first point onward you not only present a meal but you force someone to eat it and then ask why you no eat my food you dog? You've made right pigs ear of a good dogs dinner you have... :cheesy:

Lighten up a little won't you...

 

[DashRiprock]

look the f8ccin problem with R:R is that it takes a human bias (like wanting to risk less than reward) and enforces it upon a system where it has no place (markets).

You pays your money you makes your choice. whether you are any good or not os only known at the end.

 

[Atilla]

look the f8ccin problem with R:R is that it takes a human bias (like wanting to risk less than reward) and enforces it upon a system where it has no place (markets).

You pays your money you makes your choice. whether you are any good or not os only known at the end.

Agreed - pretty much saying the same thing.

When does individual bias ever not enter a trade unless you're using a black box autmated trading system?

Here is another question? When setting stops and limits on trade who ever sets stops>limit?

R:R is not a problem. It is a concept of probability to aim for.

If one wishes to use alternative words or another trading style by all means do so but what's the big deal? I don't see R:R factor enforcing anything on me.

For example tonight on demo trade half trade got limited out and the other closed with market order. Why give anything back to the market. However, Limit>stops - Reward>Risk.


You saying don't make it a hard rule in your trading - that I can understand.

Saying its a load of ******** and rubbishing it as a concept is what I don't understand. If I'm to dispose of my comprehension of R:R what am I going to replace it with.

What ever is my entry exit and stops levels are and that's it????

I'm then going to look for a pattern and aks well what is that ratio?

If you guys haven't already examined passed trades than perhaps you should and see what you information you can glean about your personal R:R


Have I misunderstood something?