Webinar: FuturesTrader71 (FT71) on Risk, Sizing, Scaling and Trade Management

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 100,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:

We are here to help. Just let us know what you need.

We work extremely hard to keep things positive in our community.

We do not tolerate rude behavior, trolling, or vendors advertising in posts.

We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.

We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple.

I agree completely that they're useful; we wouldn't be able to think without analogy, metaphor, simile. But people often get caught up in the analogy and forget about its limitations.

Similarly with statistics - they're very useful, but ever since I started looking into various statistics in medicine, I've become extremely suspicious of anything that's bandied about.

The probability that your next trade will fall within the 65% group is either 0 or 1. However, over a series of trades, you should get more 1 than 0. Maybe expressed this way it will be easier to accept the binary nature of this single isolated trade.

The following 2 users say Thank You to trendisyourfriend for this post:

Yes, I basically agree with you. In January 2008 I had 2 very good, dependable and completely uncorrelated equities systems suddenly stop working - thankfully they didn't lose money, but they sure generated lots of pointless commissions. Things do happen.

And yes, I think he is more interesting in emphasizing a concept that will help with the psychology of discretionary trading than anything to do with math.

The following user says Thank You to futuretrader for this post:

That is the way I approach. I have no idea if my next trade will be a win or a loss. It will be one or the other and I don't even care on a trade by trade basis. But based on my stats over a series of trades I expect my system will produce a certain result based on probabilities. I don't apply my probabilities to my next trade but to my overall system.

I just can't see how anyone can survive much less profit over a long period of time without using probabilities.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."

Sadly the mathematical correct way to say that is that this trade has a 65% probability to be a profitable one. For those taht know statistics and can think statistically this is not a prediction it will win - it just means that this trade setup has a higher win chance.

Now, you can say "that next trade" but statistics is neer about that next trade.

> over a series of trades, you should get more 1 than 0.
(65% actually) -> then that means that the next trade has a 65% chance to be a 1.

NOTHING implies that the next trade is a winner in there. This is statistics - and sadly, and here i really agree withteh sense - can not think in statistics.

This is not that bad actually - there is something worse people do. Let's say the next trade is a looser. Then they think the next trade after has a highr chance of winning ("to make up for the 65% chance"), and that is TOTALLY untrue. Distribution within the target curve is random. You can have a 65% win rate and still 10 loosers in a row once ian while. Does not change the 65% chance.

The following 2 users say Thank You to NetTecture for this post:

There is a huge and basic mistake in all of these discussions regarding trading probability.

The probability of an event like a coin toss, roll of a die or a roulette reel is not comparable to trading. the outcome of those events occur outside the control of the participant. The participant has NO control over the outcome.

In trading the outcome is directly controlled by the trader, his actions determine the outcome. The entire probability discussion in regards to trading is misleading and based on an error in logic. A win loss ratio is not the same as a probability of one event occurring over another, it is just a win loss ratio of past events without any predictive value.

A win loss ratio while having no predictive value on next trade does have a value although not absolutely perfect on the expectation of the future performance of an overall system. That is if the win loss ratio is based on a statistical edge which can be identified in the market over many trades.

A trader does not have complete control over the outcome. Identifying points of control (control being points where trader does have control entries and exits) using statistics and probabilities is what allows a trader to win with consistency. A trader does not fully control the outcome but can control entry and exit. The market does have a mind of its own. But using stats and applying math - statistical trends can be identified and leveraged. A trader cannot control the outcome but can be in position to take advantage of what outcomes have the highest probability of happening. The beast can be tamed or at least ridden.

I sincerely believe not using probabilities in trading will eventually lead to account destruction.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."

Last edited by liquidcci; March 23rd, 2012 at 01:43 PM.

You cannot pick to just take the winning trades because the ALL have a 60% chance of winning.

Even if you win 90% of your trades, you can't just pick the winners because you do not know ahead of time which one's will win or lose. Every trade you take in that case has a 90% chance of wining.

Of course - the next trade may win or lose but you can't take 2 possible outcomes to = 50/50 probability. That's a bastardisation of statistics.

Look - if you put me in a room with Brad Pitt and you send Claudia Schiffer in with instructions to screw one of us, the probability of me getting laid is not 50/50.

I understand the point being made but probability is not the correct terminology.

The following 2 users say Thank You to DionysusToast for this post:

Enough of the 50/50 line of debate!!! We've already done this on the other thread. Go create a new thread if you want.

Move on already!

Plenty of other fantastic material in the webinar to discuss!

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.

If you want to support our community, become an Elite Member.

The following 6 users say Thank You to Big Mike for this post: