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Almost Skilled (YM)


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Updated November 22nd 2015 by SadPraetor
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Almost Skilled (YM)

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  #31 (permalink)
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Hi,

I noticed you are scalping and you are focusing on win rate. Both are very bad things and I would say classic rookie mistakes.

The smaller the time frame you trade (ie scalping), the more difficult you make it to be successful because the fixed costs are stacked against you (among a million other reasons).

This has been discussed exhaustively on the forum, so I leave it to you to do your own research. But I felt like I should point it out, because I think you are making a fatal mistake with your method.

Mike

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  #32 (permalink)
Prague
 
 
Posts: 41 since Mar 2011
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Big Mike View Post
Hi,

I noticed you are scalping and you are focusing on win rate. Both are very bad things and I would say classic rookie mistakes.

The smaller the time frame you trade (ie scalping), the more difficult you make it to be successful because the fixed costs are stacked against you (among a million other reasons).

This has been discussed exhaustively on the forum, so I leave it to you to do your own research. But I felt like I should point it out, because I think you are making a fatal mistake with your method.

Mike

Ok, you got me confused. I do not want to be defensive, and you are busy man with the whole forum, not sure how to properly response

Define borderline between scalping and trading?

My ideal system produces usually "trades/scalps" with 8-12t stop loss, and targets 18-50t, with majority at 25-30t. Trade length average above 5min, with longest trades around hour. That is ideal, benchmark backtest, what I want it to be. I'm aiming at 50/50 success rate, generating 2-4 trades on normal day.

Now it is true, that my live trades are not same as described system above. I'm closing trades too early, I hesitate, and I do take trades that are not always in line with my rules. Performance therefore is not great. I'm working on it.

I was recently mentioning win rate, because during my SIM test and backtest I was doing below 30% success rate. I suffered a habit creep. Taking too many shots. It did hurt my confidence, so I took 2 weeks of to refresh my habits.

Am I missing something? Do I have blindfold over my eyes?

Anyway thank you for your time and post

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  #33 (permalink)
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Measuring in ticks, to me, says scalper.

Discussing "success" or "win rate", to me, says rookie. Win rate is unimportant. What matters is expectancy. Be sure to include slippage and commission.

Mike

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  #34 (permalink)
Prague
 
 
Posts: 41 since Mar 2011
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Big Mike View Post
Measuring in ticks, to me, says scalper.

Discussing "success" or "win rate", to me, says rookie. Win rate is unimportant. What matters is expectancy. Be sure to include slippage and commission.

Mike

I have to pick a battle with you here
You do realize you stated fallacy in that statement?

Expectancy = (probability of win * average win) + (probability of loss * average loss)

Win rate is important, it is one component of the equation. With 0% win rate you can't make money.
I described the whole style with ticks, identifying my SL and my targets, clearly showing where is my RRR. I wanted you to get a better feel what I'm trying to achieve. I showed you SL, target, time in trades. You can derive RRR from it, and you can see that I'm building it rather on Average winner > Average looser, than big winning rate. With good results I should be getting RRR above 2, with aim 50/50 win rate. Yes I'm failing at achieving it at this moment.

If you want to measure slippage and commission, you have to use $ as measurement unit, and that is what I do in my monthly reports. That is how I track my account, and overall performance.
When I'm talking about single trade, here on forum, I use ticks, it is easier for me to comment.

Maybe I'm scalping by your standards. Is it that important?

If in Backtest I can achieve EV 20$ per contract per trade, average RRR 2.5, and RRR 2, is it that bad? After commissions. I'm hoping I'll manage to nudge it little bit higher. Yes I do realize that there is a space to get more from my trades. But at this moment, I think I'm the bigger problem that needs to be tackled first. I track for my every live trade "theoretical correct execution" and it shows much better results than I achieved so far.
(just to be clear, by correct execution, I mean fire and forget, SL 8t, or target 25t, no meddling)
Currently I'm positive after commissions on my account, so it is not a tragedy.

So the question is, shall I master something that shows promise (and the only problem is me, my psychology breaking the rules) or shall I delete everything and try to start from clean slide?

P.S.
also, YM market, 1point=1tick
You can read all my statements above and just exchange tick for point. I don't mind. If we were talking about ES, I would be using points, it's just a habit thing.

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  #35 (permalink)
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Win rate is the least important. Far to often people only focus on win rate.

If you risk double what your reward is you have to be right 90% of the time to be profitable. That does leave much room to scale or improvement.

Reverse that risk/reward and you can be right as low as 30% and be profitable. Want to scale that, you have 70% room to increase your potential.

Win rate vs expectancy is kinda like speed vs velocity...

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  #36 (permalink)
Prague
 
 
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tturner86 View Post
Win rate is the least important. Far to often people only focus on win rate.

If you risk double what your reward is you have to be right 90% of the time to be profitable. That does leave much room to scale or improvement.

Reverse that risk/reward and you can be right as low as 30% and be profitable. Want to scale that, you have 70% room to increase your potential.

Agreed


tturner86 View Post
Win rate vs expectancy is kinda like speed vs velocity...

Disagree

Speed = scalar quantity
Velocity = vector quantity

Using your analogy, win rate vs expectancy is like (speed or velocity) vs time

Using your analogy, speed vs velocity is like Average RRR vs RRR

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  #37 (permalink)
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SadPraetor View Post
Agreed


Disagree

Speed = scalar quantity
Velocity = vector quantity

Using your analogy, win rate vs expectancy is like (speed or velocity) vs time

Using your analogy, speed vs velocity is like Average RRR vs RRR

My point was the one is part of the equation of the other. i.e. velocity = speed + direction. Speed is a variable of velocity. Win rate is a variable of expectancy. Much like advertising is a part of marketing, but often mistaken for one another.

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  #38 (permalink)
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SadPraetor View Post
Agreed


Disagree

Speed = scalar quantity
Velocity = vector quantity

Using your analogy, win rate vs expectancy is like (speed or velocity) vs time

Using your analogy, speed vs velocity is like Average RRR vs RRR

I do like the time analogy. win rate vs expectancy is live velocity vs time. Expectancy is over a period of time. I like that a lot.

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  #39 (permalink)
Prague
 
 
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tturner86 View Post
My point was the one is part of the equation of the other. i.e. velocity = speed + direction. Speed is a variable of velocity. Win rate is a variable of expectancy. Much like advertising is a part of marketing, but often mistaken for one another.

Oh you are right, I did not recall that equation

I was working with

Speed = distance/time
Velocity= displacement/time

Yes, part of the equation. My mistake

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  #40 (permalink)
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SadPraetor View Post
Oh you are right, I did not recall that equation

I was working with

Speed = distance/time
Velocity= displacement/time

Yes, part of the equation. My mistake


Quoting 
Velocity is a vector quantity. As such, velocity is direction aware. When evaluating the velocity of an object, one must keep track of direction. It would not be enough to say that an object has a velocity of 55 mi/hr (SPEED). One must include direction information in order to fully describe the velocity of the object. For instance, you must describe an object's velocity as being 55 mi/hr, east (SPEED + DIRECTION, i e velocity). This is one of the essential differences between speed and velocity. Speed is a scalar quantity and does not keep track of direction; velocity is a vector quantity and is direction aware.

Speed + Direction is a laymans way for Velocity. Speed and Velocity

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