Target of 10 points

[Profitaker]

dunno - depends on the ratio of (trader A stopped out) / (trader B stopped out), which depends on the market noise and the quality of the original entry

They both trade the same underlying and so are subjected to the same volatility. In fact they are equal in every way, except their level of stops.

Socarates, I know, that you know, that you have no clue WRT expectancy and frequency, which is why you cannot answer my scenario question above. But, you have the opportunity of proving my wrong.....

 

[commanderco]

Could I ask each Poster to begin by stating whether they are discussing trading or simply hypothesizing.
If it is trading for money, then count me in on this discussion but if it is hypothesizing, I will go & do something else.

 

[SOCRATES]

They both trade the same underlying and so are subjected to the same volatility. In fact they are equal in every way, except their level of stops.

Socarates, I know, that you know, that you have no clue WRT expectancy and frequency, which is why you cannot answer my scenario question above. But, you have the opportunity of proving my wrong.....

Listen, you have no conception of what exactly is my perimeter of knowledge and ability, and I am not obligated to reveal it to you either in whole or in part, this is not because I cannot, but because I choose not to.

But the 1 to1 idea is STUPID. I have already explained why, and I am not going to waste a Sunday afternoon arguing with you, that's all.

Read my posts above until you understand them, if you don't, read them again until you do.

All of it is obvious, you don't have to go round the houses with it, trying either to invent problems that do not exist, or in trying to have the last word, UNLESS, you concede the STUPIDITY of the idea and WHY.

 

[Profitaker]

Socrates

I know exactly where you're coming from - as evidenced by your inability to answer my fairly basic question.

Enough time wasted on you here.

 

[Bigbusiness]

So what about Chris Kobewka? He claims to be making lots of money with a stop that is larger than his target. If a 1:1 is stupid, how can he do that?

 

[Profitaker]

So what about Chris Kobewka? He claims to be making lots of money with a stop that is larger than his target. If a 1:1 is stupid, how can he do that?

It's all about frequency and expectancy. Socrates will explain LOL

 

[commanderco]

So what about Chris Kobewka? He claims to be making lots of money with a stop that is larger than his target. If a 1:1 is stupid, how can he do that?

hi BB
I refer you to my post # 33
If Chris can make good consisent profits using a larger stop than his target, then he is a very clever Trader.
Since he is a clever Trader, he would then adjust his entry to reduce his risk ( stop) and thereby increase his run to profit.
Just take a moment to think this one through, as it is very important.
It is similar to the misconception that 38% accuracy is terrific if your profits out weigh your losses. You try slapping 500 lots on a system like that and please dont tell me that your 2% rule will protect you.
You must allow "lots traded" to do the work and once you accept this into your trading life, you will see the game in a different light

 

[SOCRATES]

hi BB
I refer you to my post # 33
If Chris can make good consisent profits using a larger stop than his target, then he is a very clever Trader.
Since he is a clever Trader, he would then adjust his entry to reduce his risk ( stop) and thereby increase his run to profit.
Just take a moment to think this one through, as it is very important.
It is similar to the misconception that 38% accuracy is terrific if your profits out weigh your losses. You try slapping 500 lots on a system like that and please dont tell me that your 2% rule will protect you.
You must allow "lots traded" to do the work and once you accept this into your trading life, you will see the game in a different light

Yes, that is correct. Clever traders can do what appears to be stunts to traders who are not so clever.

But because very clever traders are in the absolute minority, everybody else has to be super prudent always and not flirt with unnecessary risks they cannot handle.

One way for these not so clever traders to get themselves into serious hot water is to ignore the wisdom of all the clever traders who have gone before us, who leave their recorded wisdom for all of us to absorb so we may benefit.

It is only the very clever traders that are able to absorb this wisdom and use it effectively.

All of this falls on deaf ears despite repeated repetitions, ad nauseam.

 

[badtrader]

Few! just Log on, thanks for the replies cant get through them all. The market in question is the Mini Russel2000 10 points shows up as a 1 point move,example 664.20 ..665.20.

The only way I can prove you wrong is trade it live for 1 day. to shut SOCRATES up.

 

[commanderco]

Few!
The only way I can prove you wrong is trade it live for 1 day. to shut SOCRATES up.

Hola BT,
You dont need to prove me wrong ... or right for that matter.
Just make yourself good consistent points and then apply volume.
Goodluck

 

[badtrader]

Hola BT,
You dont need to prove me wrong ... or right for that matter.
Just make yourself good consistent points and then apply volume.
Goodluck

I dont use Volume in terms of single bars.There no wrong way or right way to trade.infact you could make money on a flip of a coin with good money management

 

[Profitaker]

Let give you a scenario to think about. Trader A and trader B both trade the same underlying and with the same directional succes rate. Both exit when a profit of 10 points has been achieved. But trader A uses a 5 point stop, trader B uses a 10 point stop. Who makes the most profit ?

The answer is that they will both have the same profitability – they both have the same expected returns.

Trader A will incur more frequent (but smaller) losses than trader B.

Trader B will incur less frequent (but larger) losses than trader A.

 

[badtrader]

Here another one for you to think about. trader d, the same 10 target 10 stop. we base it on 1 lot. enter market if the market moves against you by 7 ticks buy 1 more lot. you know wait for you stop to be hit which is know only 3 ticks away, and you target is now 17 ticks away

 

[commanderco]

I dont use Volume in terms of single bars.There no wrong way or right way to trade.infact you could make money on a flip of a coin with good money management

I mean your volume. ie the number of lots you are applying to your strategy.

 

[fxmarkets]

how far down the alphabet you gonna go with these.. ? hmmm we get to j k l m and n then trader o decides crikey better reverse just as the market does counter to o position ?

how are they basing their entry, why am I risking here ? do they have exact same entry price? just different attitudes to open risk needed ?

 

[Profitaker]

how far down the alphabet you gonna go with these.. ? hmmm we get to j k l m and n then trader o decides crikey better reverse just as the market does counter to o position ?

how are they basing their entry, why am I risking here ? do they have exact same entry price? just different attitudes to open risk needed ?

All of that is very subjective and worthy of another thread (or perhaps 50 threads). But as a comparison, and when comparing two otherwise identical traders - a trader that uses a 5 point stop will be no better off than a trader that uses a 10 point stop. The same applies to any exit strategy where a limit order is used.

 

[badtrader]

how far down the alphabet you gonna go with these.. ? hmmm we get to j k l m and n then trader o decides crikey better reverse just as the market does counter to o position ?

how are they basing their entry, why am I risking here ? do they have exact same entry price? just different attitudes to open risk needed ?

All the same entry's

I mean your volume. ie the number of lots you are applying to your strategy.

Agree Size does matter.Well that's what my wife keeps telling me

 

[badtrader]

A successful strategy must be very clear on where stops must be placed to limit a loss because even day traders using a mediocre strategy can be successful if they learn proper stop loss placement techniques, but until someone can tell me the proper stop placement which I dont think they can (SOCRATES) I will carry on, with what I know, how to make money.That's the bottom line making money

 

[fxmarkets]

come on bad trader feed back, whats the reason to warrant risk of 10 in that market how does that relate to the entry why 10...

 

[c6ackp]

Originally Posted by Profitaker

Let give you a scenario to think about. Trader A and trader B both trade the same underlying and with the same directional succes rate. Both exit when a profit of 10 points has been achieved. But trader A uses a 5 point stop, trader B uses a 10 point stop. Who makes the most profit ?
The answer is that they will both have the same profitability – they both have the same expected returns.

Trader A will incur more frequent (but smaller) losses than trader B.

Trader B will incur less frequent (but larger) losses than trader A.

Profitaker - are you sure about this?

IMHO if the strategies are correct and the expectation on each trade is > 10...

...and the average market noise is 6, then it's possible that trader B gets 10/10 winners and trader A gets 0/10 winners - to me, that's not the same expected return

I agree that this answer is correct in a random market with random noise and a random entry (i.e. Random A and Random B, not Trader A and Trader B), but that's not much good to us!

Interesting thread tho
Steve