Risk Reward Myth

[Atilla]

Hi DT - 10 successive losing trades. OMG :-0

https://www.forexdesk.com/traders/Atilla/accounts/193



I get to have some humble pie... Accounts in loss too.

System is imperfect. Needs fine tuning. Early success could not be maintained.

Was it Bramble who said it could work at market tops or bottoms.

I still hold the view R1:R2 as a target is useful but needs further refinement and better trade management technique. Perhaps trailing stops might make a difference???

I will continue testing with this account under same rules but placing weekly trades to see if they catch on. I'll try and pick the longer time frames at where I think we may get trend reversals to see if it has better chance of success than on the very short time frames.



It has been very interesting for me to say the least and thanking you all kindly.

 

[DashRiprock]

oi atilla u f8ggin plonker

wat dus 1o l0sses in a r0w m3an?

fink abut ur r:r

find vols

du somes

 

[Atilla]

oi atilla u f8ggin plonker

wat dus 1o l0sses in a r0w m3an?

fink abut ur r:r

find vols

du somes

errmmm - bad luck

My first thoughts were that markets trending sideways without clear direction. Need to review them all yes but need to go to bed zzz time.

If you could throw a bone or two for the old dog - it'll help me digging around for them.

 

[theroguetrader]

eur/gbp

bid 8862, stop 8812, tp R2 8962

 

[JahDave]

RT - 10 successive losing trades. OMG :-0

https://www.forexdesk.com/traders/Atilla/accounts/193



I get to have some humble pie... Accounts in loss too.

System is imperfect. Needs fine tuning. Early success could not be maintained.

Was it Bramble who said it could work at market tops or bottoms.

I still hold the view R1:R2 as a target is useful but needs further refinement and better trade management technique. Perhaps trailing stops might make a difference???

I will continue testing with this account under same rules but placing weekly trades to see if they catch on. I'll try and pick the longer time frames at where I think we may get trend reversals to see if it has better chance of success than on the very short time frames.



It has been very interesting for me to say the least and thanking you all kindly.

It seems in my humble opinion that your system works well in consolidated markets, but not so well in trending markets...........

God Trading,
Dave

 

[DionysusToast]

Atilla

good to see that you didn't doctor the results.

Now - the thing is - would you consider that the R:R had nothing to do with this failing and that it would have had nothing to do with the any success.

It's just there's possibly no edge with the mechanical entry technique you have chosen. Or maybe there's an edge in fading it!

DT

 

[theroguetrader]

eurgbp, take off half 1 lot at R1 (and a bit) - (+68 pips)

 

[hoodoo man]

RT - 10 successive losing trades. OMG :-0

I get to have some humble pie... Accounts in loss too.

System is imperfect.

Hi Atilla

As I explained to you in the beginning you cannot construct a profitable trading system by making up risk: reward ratios. However, you have impressed me by taking responsibility for your trading and finding things out for yourself.

I am sure many here have found your experiments very informative indeed. You need to understand what will not work in order to find what will, and this is a positive first step for you. Good for you putting yourself on the line and testing your ideas.

I still hold the view R1:R2 as a target is useful but needs further refinement and better trade management technique. Perhaps trailing stops might make a difference???

Trailing stops may or may not produce better results. Again this is more of a cul-de-sac rather than a solution to a successful trading system. However, we must learn (and sometimes prove) which are the dead ends. Only then can we make real progress.

I would suggest that mechanical rules are unlikely to be successful in the long term due to the principle of every changing cycles. Bacon describes this in his book, Secrets of Professional Turf Betting - which I think is a very good book for aspiring speculators.

It has been very interesting for me to say the least and thanking you all kindly.

Interesting for me to observe also, and hopefully the discussion on this thread about risk:reward may bear some interesting fruits after all. You are most welcome.

 

[Atilla]

Hi Atilla

As I explained to you in the beginning you cannot construct a profitable trading system by making up risk: reward ratios. However, you have impressed me by taking responsibility for your trading and finding things out for yourself.

I am sure many here have found your experiments very informative indeed. You need to understand what will not work in order to find what will, and this is a positive first step for you. Good for you putting yourself on the line and testing your ideas.

Trailing stops may or may not produce better results. Again this is more of a cul-de-sac rather than a solution to a successful trading system. However, we must learn (and sometimes prove) which are the dead ends. Only then can we make real progress.

I would suggest that mechanical rules are unlikely to be successful in the long term due to the principle of every changing cycles. Bacon describes this in his book, Secrets of Professional Turf Betting - which I think is a very good book for aspiring speculators.


Interesting for me to observe also, and hopefully the discussion on this thread about risk:reward may bear some interesting fruits after all. You are most welcome.

Cheers Hoodoo,

I think this is your best post by far and I do appreciate your comments.

I will be looking into it further as and when time permitting and will update in due course.

Regards,

 

[Atilla]

Atilla

good to see that you didn't doctor the results.

Now - the thing is - would you consider that the R:R had nothing to do with this failing and that it would have had nothing to do with the any success.

It's just there's possibly no edge with the mechanical entry technique you have chosen. Or maybe there's an edge in fading it!

DT

I'm not sure how to answer your question re: failure or success. I feel it needs further testing under more strict controls such as specific time frames for me to draw conclusions.

I really would like to sit down and go through each of the trades to see what the market did in that time frame.

Be good to stick it in a spread sheet and get some mean numbers too.

In summary though - I will not be phasing out BBs or RRs just tweaking them and using them with more restraint. Somedays / sometimes they work a treat. Some - obviously not. Trick right now is to identify those treats.

 

[hoodoo man]

Cheers Hoodoo,

I think this is your best post by far and I do appreciate your comments.

I will be looking into it further as and when time permitting and will update in due course.

Regards,

Looking forward to your update.

What has happened to your trading? EK1 has just posted an update and it shows your account in loss, again! (just tongue and cheek you understand :cheesy

Since everyone has been asking me to put up or shut up I have shared three consecutive trades in real time from the predictive trading model I use over on the competition thread, for a net total of over 170 points (2 main swings, 1 opposite swing). There should be enough there for a determined newbie to work it out for himself in 18 months - 2 years.

Hope you like it!

 

[Atilla]

Looking forward to your update.

What has happened to your trading? EK1 has just posted an update and it shows your account in loss, again! (just tongue and cheek you understand :cheesy

Since everyone has been asking me to put up or shut up I have shared three consecutive trades in real time from the predictive trading model I use over on the competition thread, for a net total of over 170 points (2 main swings, 1 opposite swing). There should be enough there for a determined newbie to work it out for himself in 18 months - 2 years.

Hope you like it!

Haven't seen it or caught it I'm afraid.

I'm not sure this sort of thing justifies. Why not open a demo account and even if it is only two trades a week stick it in there. Then we know time of entry, stop/limit, exit etc.

Not inclined to troll through loads of blogs to decipher it either. No disrespect as before but if you suspect people going to jump through hurdles to study your trades - that is a big ask spread imo.

Well done I'm happy for your trades.

As for the demo accounts they'll rumble on. I've taken a view Euro is on shaky grounds in the short term and will continue to be so irrespective of the news. See what happens by the weekend.

 

[Atilla]

Looking forward to your update.

What has happened to your trading? EK1 has just posted an update and it shows your account in loss, again! (just tongue and cheek you understand :cheesy

Hope you like it!

Here Hoodoo man and Mr Clarette player (I assume it was you two who bet on me that I wouldn't be able to learn how to trade and make money);

How is it that you have used about 10 posts to highlight when I make a loss but you never seem to comment on my profitable returns. Where is the cut and paste WINNER art work???

Admittedly - some of the accounts have taken longer than a week - but over 7 accounts and approx 7 weeks that's a pretty good return - wouldn't you agree?

Perhaps not at your level of trebling the account every three days but it helps keeping me off the streets.

Finally, on two of those accounts I endured a 10K and 5K loss due to Stops not working, which I recovered from.

Furthermore - accounts managed on a part time basis. I don't sit on my **** all day long but do some real good service work. Would you like to see what my retention bonus is? :cheesy:

 

[Atilla]

Hi guys,

Interesting observation from #4 weeks competition.

Although the competition is over the entry orders are left on there. I noticed today that one of them got hit.

Once again the R1:R2 I usually adhere to but simply placed a while back at some point when BB's narrowed.

Because this #4 is not the RR-Reward account I've taken the profits to lock them in rather than leave em on the table.


Key point I would say is BBs highlight congestion and market re-appraisal of rises and falls. Subsequently on the path down or up the same areas become decision points for continuation or reversal.

Hence, if one checks account intermittantly as in my case - easy money when system works. I like to think of it as Money-fishing...

PS: What I'm trying to say is there is real merit to this system if anybody chooses to invest time in it whilst not being chained by their ankles to the trading terminal...

 

[smilejamaica]

Trading without stops

If everyone traded without stops and limits, how would that make the bigger boys trade, i mean they can see where the stops and limits are. hence no need for risk and reward.

 

[Jason101]

Hi guys,

Interesting observation from #4 weeks competition.

Although the competition is over the entry orders are left on there. I noticed today that one of them got hit.

Once again the R1:R2 I usually adhere to but simply placed a while back at some point when BB's narrowed.

Because this #4 is not the RR-Reward account I've taken the profits to lock them in rather than leave em on the table.


Key point I would say is BBs highlight congestion and market re-appraisal of rises and falls. Subsequently on the path down or up the same areas become decision points for continuation or reversal.

Hence, if one checks account intermittantly as in my case - easy money when system works. I like to think of it as Money-fishing...

PS: What I'm trying to say is there is real merit to this system if anybody chooses to invest time in it whilst not being chained by their ankles to the trading terminal...

An addition to the method is to place a keltner channel on the chart with a 12 and 1.5 setting.
And the setup is when the Bollinger band sits inside the keltner channel there is a high chance of a volatility breakout.

 

[new_trader]

Re: Trading without stops

If everyone traded without stops and limits, how would that make the bigger boys trade, i mean they can see where the stops and limits are. hence no need for risk and reward.

Do you mean hard stops and limits? If so, it would probably make little or no difference because everyone still has an uncle point...or they go broke.

 

[Splitlink]

I have always considered a low risk entry as being the ideal to look for in a trade The reward has always been unconsidered because I havn't a clue. I take what I can get and, as the trade develops, I act accordingly. I am not , necessariily a "let the profits run" trader. I know what is a good profit for me and what time of day I am running into. Lunchtime is, often a choppy period.

IOW, I'm happy to get out with a small loss or, I'm happy to get out with any kind of profit or, I'm delighted with a run away profit. Ending the day happy is, for me, the way to start the next day in a happy state of mind.

Ending the day with that unhappy, sinking feeling, is not a good way to start the next one because you have a negative "I had better make make a profit today" state of mind.

 

[Splitlink]

another reason why R:R is bogus is because getting out of a position just because you are losing money is not always good. It by defenition puts you in the "weak hand" group

I mean if the reasons for your long trade are still good, and its gone against you, buy more!

You buy more!

 

[andycon]

Scaling in or scaling out, or both? Personally I don't like either, but I'm aware many people do. Scaling out seems to be the more popular.