Breakeven Stops: At Entry or 1-2 Tic Profit? | Psychology and Money Management


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Breakeven Stops: At Entry or 1-2 Tic Profit?

  #9 (permalink)

Chicago IL
 
Trading Experience: Advanced
Platform: SierraChart
Broker/Data: Transact, SC
Favorite Futures: ES, NQ
 
Posts: 11 since Aug 2012
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centaurer View Post
I would just add I would be very careful with the definition of expectancy when you click on the link. That basically comes from the expected value calculation of an independent and identically distributed random variable(iid).

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I just don't think moving the stop is even the right question then. At the least this movement would have to scale with volatility. You can't do the same thing like this with the VIX at 10 vs the VIX at 50.


Exactly right, and that's the point I think. You must remove as much randomness as possible until you've got a solid foundation. Expectancy for me - trading the ES, NQ, CL is simply (Win% x Avg Win) - (Loss% * Avg Loss), in ticks, not dollars. And my homework requires I track every possible trade opportunity offered under the rules of my plan. My homework is without emotion. There I can determine my probabilities. I'm trying to whittle down the randomness to my own emotional limitations and abilities to do my job, follow the rules.

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