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Why 7% is the Difference between Failure and Success in Trading
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Why 7% is the Difference between Failure and Success in Trading

  #11 (permalink)
Live Your Bliss
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liquidcci View Post
60% is a very nice edge I would not call it monstrous. It is doable for long stretches of time.

60% at 1:2 RR is huge as indicated by the trials.

If it's doable, I'd like to see some records over longer periods of time. No takers yet.

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #12 (permalink)
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Anagami View Post
60% at 1:2 RR is huge as indicated by the trials.

If it's doable, I'd like to see some records over longer periods of time. No takers yet.

Endless debate about putting trading records up. I for one will not do it because they are private and can be fabricated on a message board like this anyway. So it is moot.

This is definite doable and I think mistake to overlay your own experience onto what others have done and can do. I will say key though is to setup system that needs much less than 60% to survive and make money.

"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."
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  #13 (permalink)
Live Your Bliss
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liquidcci View Post
Endless debate about putting trading records up. I for one will not do it because they are private and can be fabricated on a message board like this anyway. So it is moot.

This is definite doable and I think mistake to overlay your own experience onto what others have done and can do. I will say key though is to setup system that needs much less than 60% to survive and make money.

Maybe even 66% is possible at 1:2 RR if one is very, very selective in setups. I have not achieved that and have not seen others do it, so it's in the "maybe, but unlikely" category.

Yes, it misses the point of the thread entirely, so I'm not sure why people keep bringing it up. For some strange reason, people are riled up to defend something.

More trials to come, with 1:1 RR and 1:0.5 RR (scalper targets).

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #14 (permalink)
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Anagami View Post
Maybe even 66% is possible at 1:2 RR if one is very, very selective in setups. I have not achieved that and have not seen others do it, so it's in the "maybe, but unlikely" category.

Yes, it misses the point of the thread entirely, so I'm not sure why people keep bringing it up. For some strange reason, people are riled up to defend something.

More trials to come, with 1:1 RR and 1:0.5 RR (scalper targets).

I like your thread and find it interesting. Not trying to miss point of thread but threads tend to take on a life of their own and I think 60% at 1:2 RR is within the scope of discussion. It does take being selective in setups to get that win percentage with that ratio but is doable was my only point. Being selective is part of the game but it is possible to be to selective.

"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."
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  #15 (permalink)
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liquidcci View Post
I like your thread and find it interesting. Not trying to miss point of thread but threads tend to take on a life of their own and I think 60% at 1:2 RR is within the scope of discussion. It does take being selective in setups to get that win percentage with that ratio but is doable was my only point. Being selective is part of the game but it is possible to be to selective.

The point of the thread is to explore the question: what percentage do I need to improve over randomness to be profitable?

With respect to 1:2 RR, that percentage seems to be 7 (or the ballpark is somewhere there).

60% at 1:2 RR is virtually a license to print money. Since that is a huge edge and since over 90% of people in this business are losers and probably the same percentage of people are full of it, I am quite skeptical.

Just because it's doable doesn't mean it's doable for very many people out there. Some people go to Olympics and some receive the Noble prize. I personally have not met either.

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #16 (permalink)
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I suspect that for the majority of people out there, their entries (and probably trade management) is worse than random. They are below the random 33% category at 1:2 RR (meaning they are trapped more often than a random trader would be).

The public loses more than it's entitled to, as Bacon famously notes.

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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Anagami View Post
The point of the thread is to explore the question: what percentage do I need to improve over randomness to be profitable?

With respect to 1:2 RR, that percentage seems to be 7 (or the ballpark is somewhere there).

60% at 1:2 RR is virtually a license to print money. Since that is a huge edge and since over 90% of people in this business are losers and probably the same percentage of people are full of it, I am quite skeptical.

Just because it's doable doesn't mean it's doable for very many people out there. Some people go to Olympics and some receive the Noble prize. I personally have not met either.

I understand being skeptical. Reality most people are not even profitable thus the high failure rate. I am speaking from own experience I can get 60% with 1:2 risk to reward ratio. But to not be as selective I tend to get around 55% consistently at a 1:2 ratio. I am still selective and setup my system to limit trades with purpose. Quality trades with good money management to scale trades is a license to print money.

"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."
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  #18 (permalink)
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liquidcci View Post
I understand being skeptical. Reality most people are not even profitable thus the high failure rate. I am speaking from own experience I can get 60% with 1:2 risk to reward ratio. But to not be as selective I tend to get around 55% consistently at a 1:2 ratio. I am still selective and setup my system to limit trades with purpose. Quality trades with good money management to scale trades is a license to print money.

If true, those are some excellent stats and you're making a boatload of money. Thanks for sharing!

Later today, we'll be looking at the 1:1 ratio.

"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
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  #19 (permalink)
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Anagami View Post
At 1:2 RR, 40% winning rate overcomes vig (that's not to say that vig isn't important. It is.)

Yes, edges are stronger on higher timeframe, but there's much less opportunity.

Suppose one goes from trading 5 min charts to daily charts. You have just reduced your opportunity by a factor of 81!! (There's 81 bars every day on 5 min chart).

Absolutely correct.


liquidcci View Post
I understand being skeptical. Reality most people are not even profitable thus the high failure rate. I am speaking from own experience I can get 60% with 1:2 risk to reward ratio. But to not be as selective I tend to get around 55% consistently at a 1:2 ratio. I am still selective and setup my system to limit trades with purpose. Quality trades with good money management to scale trades is a license to print money.

As stated above if this edge is executed regularly this is a very strong edge indeed. However, I do want to note again that holding time matters a great deal. It is not that difficult to design a method that has an average of a 1:2 ratio and 55-60% win ratio if that system is taking 5 trades a month. Certainly to design such a system is not within the realm of "liar". Translating that into a system that can take 5 trades a week and keep the same statistics is a whole nother ball of wax.

Personally, I find a system that can get about 5 trades per week with a mere 50% win ratio and 1:1.5 average is more than enough license to print money.

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Anagami View Post
At 1:2 RR, 40% winning rate overcomes vig (that's not to say that vig isn't important. It is.)

Yes, edges are stronger on higher timeframe, but there's much less opportunity.

Suppose one goes from trading 5 min charts to daily charts. You have just reduced your opportunity by a factor of 81!! (There's 81 bars every day on 5 min chart).

Edges are stronger on a higher timeframe?

Can I ask where you get that from? The edge that 99% of prop firms teach is trading off the order book, which is arguably the lowest timeframe of them all.

As for reducing your opportunity by 81 - how did you calculate this? Surely opportunity is measured by what comes along and not by a mathematical formula...

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