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The MOST important piece in trading
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The MOST important piece in trading

  #1 (permalink)
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The MOST important piece in trading

After you have some setups and you are disciplined, I'm not so I don't trade discretionary, what is the MOST important issue to be profitable?
I will answer this question after I get answers to another question.
Can it be profitable to trade a loosing setup together with a winning setup? And why?

Baruch

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  #2 (permalink)
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I think yes.

Enter with RRR (risk reward- ratio) all of 1:2.5 and strict Money- management

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  #3 (permalink)
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a bit stupid question if you know which set up is profitable why continue to trade loosing set up, just for fun ?
I thought the name of the "game" is constant search and prove of profitable set ups and determining and deleting loosing set ups, i.e. stable profit improvement

Krgds,
Andrew

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  #4 (permalink)
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Andrew,
From your answer I understand that you can't see how a losing setup can make you more profitable.
Well although you are the only one who tried to think about this issue, I'll give you an example.

The game you play is coin toss. (Its not exactly trading. The odds are constant, but its close).
Setup 1:
You win 4 if you get head and lose 1 if you get tail.
Is it a profitable setup? Would you play(trade) it?
Setup 2:
You lose 3 if you get head and you win 2 if you get tail.
Is this a profitable setup?

Now tell me what would happen if you play(trade) both of the setups?

From that example you can conclude that if you have two or more setups with -1 correlation, it can be more profitable even to have a losing setup.
I can demonstrate it with real trading setups, but because you are the only one who is interested, I'll pass.
Its funny that in this "great" community no one tries to understand what trading is about.
The only responses you get is when you give some useless indicators or complete setups, but if you try to get people to think, no one is interested.
I stand behind the title "This is the most important piece in trading", but apparently all the crowd knows it or is ....

Baruch
p.s.
That was my last attempt to encourage this community (and myself) to think and understand more about trading.

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  #5 (permalink)
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Baruchs,

Your stand of point is interesting to me and I'll be glad to discuss it further!
A few comments from me, but I'm not arguing,
Coin toss, I've read about 1 year ago, that some really reputable and serious scientists (source of that info don't remember, but also was quite famous and reliable) made tests and found that results of coin toss could be "corrected', i.e. classic theory about coin toss is not quite right
+
the name of the "game" in trading is to get as much as possible advantages at your side, minimizing failures, so when you find something that works bad to stop use it, if you find something that works better you start use that more.
I hate that conception, but it's dealing with evaluation of probabilities and the work is to select high % probabilities and remove low % probabilities, thus increasing % of positive result, which in it turn deals more with statistic (which I like a lot)
Statistic shows "complete picture" of process with its minuses and pluses, then it's analyzed and if possible optimized (minuses removed as much as possible) + it gives opportunity to rate expectancy of minuses and price it into your calculations.
meaning that there are no anything completely perfect in anything and you have always to deal with 2 things : minimize minuses and know that they couldn't be removed completely.
Does it seems we spoke about one thing using different approaches

P.s. +1 and +1
again, the idea is interesting, but seems I'm not catching wave yet.

Krgds,
Andrew

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  #6 (permalink)
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baruchs View Post
Andrew,


Its funny that in this "great" community no one tries to understand what trading is about.
The only responses you get is when you give some useless indicators or complete setups, but if you try to get people to think, no one is interested.
I stand behind the title "This is the most important piece in trading", but apparently all the crowd knows it or is ....

Baruch
p.s.
That was my last attempt to encourage this community (and myself) to think and understand more about trading.

Baruch

Well that would be a shame if this was your "last attempt" to think . This great community would miss your input. I think there are many who are interested in what you are proposing. Most of the trading world is on break right now. The volume of people using this site will increase greatly in the next week. I would make the case that it is possible by using a chart to predict a time/price that price is likely to trend. You may or may not be right - that is why money management matters. I think at these points your "edge" is better than 50/50. This look into the market is not possible with a coin toss. I feel most traders get a better than 50% win ratio but then lose because of poor money mgt or discipline. IMHO. Look forward to hearing more from you...

More info from this great community - courtesy of Richard @ move the markets
http://www.movethemarkets.com/downloads/rwt/RWT-007.pdf

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  #7 (permalink)
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just randomly remembered great phrase
indicators just derivatives

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  #8 (permalink)
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Websouth,

Quoting 
I think at these points your "edge" is better than 50/50. This look into the market is not possible with a coin toss.

I think all the time. I don't take any think for granted. If someone makes a statement I analyze it and decide for myself if its a valid statement.
The play with coin toss that I gave, does have an "edge". I hope that you do know that trading setups consist of two ratios (one is winning percentage, the other... read my other thread). So setup with 30% win ratio can be better than setup with 85% win ratio.

Andrew

Quoting 
the name of the "game" in trading is to get as much as possible advantages at your side, minimizing failures, so when you find something that works bad to stop use it, if you find something that works better you start use that more.

I have another question to you (I actually asked it on another thread, not on holidays, without any response).
You have two setups and in a period of time (doesn't matter how long) those are the results:
Net Profit DD
1 40K 6K
2 10K 1K

Which is better and why?

Baruch

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  #9 (permalink)
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Baruchs,

I'm enjoying your questions, please keep asking further.
One of my principles is : holidays are when you got huge profit - that's the best holiday.
I'm not workaholic it's just the matter of shape - like sportsmen why you are training constantly you are often winning, if you are training say as that do most of others, then you are winning at the same rate
Well, with regards to below one, I'm not sure I got it right, so will answer with remarks.
40 K / 6 K
If 40K is profit 6K loss
and
10K 1K
also profit/loss
then
10K / 1K is certainly best as better to have smaller profit, but also smaller % to profit of losses

if

40 K / 6 K
40K is profit 6K profit
and
10K 1K
also profit/profit
then
40K / 6K is best because of % of profit difference is higher, however in that particular case its higher just by 0.5 %, so if to keep that % of profit difference higher just by 0.5 % 40K/6K could not be such good thing if both of results are made withing same time period 40/6 has potentially higher rate of possible "not forecasted" loss about 25 % higher, but not less than 12,5 %
I don't think it's too complicated conclusion because when dealing with market you have to keep in mind "human factor" sometimes even such : some commercial UK traders got to much cocaine today and made some trades which could not be explained logically even by themselves, keeping in mind volume concentrated in their hands they if not move, but at least can push market which in it turn could cause big move. It's not ferry tales, believe me.
Awaiting yours further.
Krgds,
Andrew



baruchs View Post
Andrew

I have another question to you (I actually asked it on another thread, not on holidays, without any response).
You have two setups and in a period of time (doesn't matter how long) those are the results:
Net Profit DD
1 40K 6K
2 10K 1K

Which is better and why?

Baruch


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  #10 (permalink)
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Andrew,

Quoting 
some commercial UK traders got to much cocaine today

Are speaking about yourself?
If you really want me to continue, please give your answers when you are not under influence.

Baruch
p.s.
The question was:
Setup 1 - NP=40K DD=6K
Setup 2 - NP=10K DD=1K

To answer it correctly you have to answer what would be NP and DD of a second setup if you traded it with 6 contracts.

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