THT
Active member
- Messages
- 124
- Likes
- 8
More Insight into TREND
DOWN trending section #1:
Moving Averages then flatten out, twist and turn as price goes sideways, price breaks out to the upside and...........
UP trending section #2:
Like I've said before - you don't need that many 3R+ trades per month to win at this game - Don't chase crap set-ups, they add to the risk, just be absolutely steadfast to your set-up - let all those going bust, chase the risky set-ups.
If you're of the cautious nature, then you could sell a portion of the position once up X R profit etc - to bank initial profits, then trail up the rest of the position, but that dilutes things a bit, so you need to work out if that's you or not
Lets pretend that we take 16 trades per month (for the maths in this example) using TREND set-up & it has a 50% win rate
8 wins and 8 loses - we'll assume NO mistakes and an average of 3R win nett of costs and an exact 1R cost for loses
8 x 3 = 24 R wins minus 8 R losses = Net 16R per month
If 1R = £150 then £150 x 16 = £2,400 per month - that's £24,000 if you work 10 months of the year
Then to make more, you just increase the position sizing, so keeping everything the same, but this time lets say our account is £50k and we want to risk 1% of it £500 per trade then............................
We make £8k per month and £80k per year based on 10 months
Lets worsen the parameters and our system only wins 40% of the time, we'll leave the risk at £150 per trade
16 trades = 6 wins and 10 losers
6 x 3 R = 18 R per month less 10 R = nett 8R profit per month
8 x £150 = £1,200 = £12k per year if only trade 10 months
Based on £500 = 1R = £4k per month or £40k per year based on 10 months
Once you have total confidence in your methods, you can then just manipulate the numbers to get to where you need/want to be
Now in the process of typing up this post, I've been interrupted a lot of times - one of those days the phone is going non-stop on things I have to answer/take - So apologies if I've messed up with the maths anywhere
DOWN trending section #1:
- Moving averages in PERFECT order + STEEP ANGLE = Pressure to the downside
- Price pulls back to the 10/20 SMA's and drops
- It also forms the 123/Ross Hook
- So you can go short on either the pullback to the MA's or when the ross Hook is exceeded
Moving Averages then flatten out, twist and turn as price goes sideways, price breaks out to the upside and...........
UP trending section #2:
- Moving averages move into PERFECT order = POSSIBLE up trending section
- Price then stays ABOVE the 10 SMA - NO 2RSI <25% on this one, BUT
- There were multiple Ross Hooks to the upside which then forced the SMA's into a STEEP angle
Like I've said before - you don't need that many 3R+ trades per month to win at this game - Don't chase crap set-ups, they add to the risk, just be absolutely steadfast to your set-up - let all those going bust, chase the risky set-ups.
If you're of the cautious nature, then you could sell a portion of the position once up X R profit etc - to bank initial profits, then trail up the rest of the position, but that dilutes things a bit, so you need to work out if that's you or not
Lets pretend that we take 16 trades per month (for the maths in this example) using TREND set-up & it has a 50% win rate
8 wins and 8 loses - we'll assume NO mistakes and an average of 3R win nett of costs and an exact 1R cost for loses
8 x 3 = 24 R wins minus 8 R losses = Net 16R per month
If 1R = £150 then £150 x 16 = £2,400 per month - that's £24,000 if you work 10 months of the year
Then to make more, you just increase the position sizing, so keeping everything the same, but this time lets say our account is £50k and we want to risk 1% of it £500 per trade then............................
We make £8k per month and £80k per year based on 10 months
Lets worsen the parameters and our system only wins 40% of the time, we'll leave the risk at £150 per trade
16 trades = 6 wins and 10 losers
6 x 3 R = 18 R per month less 10 R = nett 8R profit per month
8 x £150 = £1,200 = £12k per year if only trade 10 months
Based on £500 = 1R = £4k per month or £40k per year based on 10 months
Once you have total confidence in your methods, you can then just manipulate the numbers to get to where you need/want to be
Now in the process of typing up this post, I've been interrupted a lot of times - one of those days the phone is going non-stop on things I have to answer/take - So apologies if I've messed up with the maths anywhere