Im in search of traders who are willing to explore all ways to cover a string of losses.
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I get strings of losses due to two reasons - sudden increase in volatility and trend failure. But I don’t find either significantly damaging to the account. They’re annoying but I think of them as inevitable.
Why should I get involved in trying to eliminate these strings?
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There are two ways to pay for a string of losses, two extremes. Im seeking creative types that resonate with this insight and are curious about the details.
Exactly. Every successful strategy must have losses. It should work off probability. Trying to over optimise a strategy is going to make it worse imo
Yes, I have experienced that.
Optimizations to decrease loss count makes it worse only when it makes it worse. We’re dealing with historical data which can guide us through the process of reducing the max expected loss count. That is not what Im discussing here.
Im talking about the two competing methods to pay for a string of losses.
What did you have in mind?
Read the thread and you tell me.
You said “ways to cover a string of losses.”
What do you mean by that? Do you want to create a chat group of traders looking to share trade ideas? To improve trader psychology? Hedging ideas?
It is possible to make a lot of profit by learning from a loss. A trader can make a lot of profit if he agrees to develop trading skills.
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After each consecutive loss some traders cut their position size for the next trade, some use a fixed position size and some multiple their position size. I encourage my team to master each one of these styles. Doing this extensive work and becoming familiar with the math behind it, and what you need to tweak to make each one of them profitable is the path to success in this game. The combinations of styles and parameters may seem endless but I assure you it is finite. As usual, the game can be mastered. I seek traders that are willing to put in the work.
For those that see the value in focusing on what I’ve outlined here, think of it this way. There are 20 active hours in a day, 5 days in a week. Thats about 100 samples in one week if you’re trading the hourly trend. One week is not enough for an efficacy qualification. Now zoom out to the weekly trend, there are about 100 weeks in a 2year period. The same way one week is not enough, two years is not enough.
I know a few people that have gotten lucky for years leading to inflated convictions. I need at least 5000 samples for elevated conviction levels. This high standard exposes worst case scenarios and produces a focus on sophistcated payment methods for a string of losses. The hit it big for a few years and run approach is not a generational solution. A trader that cannot daytrade if he chooses is no trader at all.
I wont elaborate too much because there could be numerous reasons,though the conditions of the markets could be more volatile and unpredictable( an example nasdaq at moment ) at times and a total rookie may not be aware.It would probably be beneficial to take a break for a few days come back with a fresh mind.
Food for thought, since you want to be spoon fed.
100 15min in 25hours
100 hours in a week
100 4hrs in 20days
100 days in 5months
100 weeks in 2years
100 months in 9years
100 samples is not enough. So 9years is not enough time to confirm a monthly trend system, the same way 2years is not enough for a weekly trend system, the same way 5months is not enough for a daily trend system, and so on. Markets are giant fractals.
A trader overthinking their strategy is a laughable notion. Trading is highly complex and it will take a lifetime of creative thinking to reach superior optimizations. Most of us do not have the intellectual capacity to afford an issue as luxurious as overthinking something. Chances are you’re not a genius, don’t ever stop developing.
Read all my posts in this thread, connect the dots. You’re welcome
There is a point at which risk of ruin goes from 0 to 100. Find it and work back from there. Once you’ve tested 5000+ samples your conviction raises to absolute certainty, this is where the stress fades. Once you have this optimized extractor in production, you are free to continue gradual development that lowers the 0 to 100 threshold for larger extractions. You don’t have to trade this way but having the option to is proof of mastery. We think like a company, having every possible way something can be done. Indefinite research and development.
I encourage my students to apply endless development to life in general. Don’t you get bored otherwise, doesn’t the apathy get to you? Settling is easy, as a society we admire difficult feats. We are programmed to consider the easy route pathetic. Live effortfully.
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There are 2 categories, entry systems and target systems. Position sizing is pip valuing, which dictates how preserving an entry/target method combination needs to be. Higher frequency entry systems produce higher loss counts. Higher distance target systems also produce higher loss counts. Bigger size requires lower entry frequency and target distance. Smaller size allows for higher entry frequency and target distance. The former is where everyone on my team starts, they graduate to the convoluted latter.
These are the 3 core elements in any trading operation, size, entry, target. There is a 4th and much more valuable factor that most don’t include in their work…time. It is the most precious commodity. We are ChronoTraders.
An entry system is easier to pin down than a target system. Get the entry the best you can then explore all the size and target combinations possible.
Refer to my post about how many samples are required to raise conviction levels. A bad system can make money for years before showing its true colors. What will you do with a broker statement, it will not impact your conviction. A detailed strategy can be tested and will always be the only verifiable document of substance. Verification requires tedious testing of 5000+ samples. There is no shortcut.
5000+ Samples=Certainty
Example: There are about 5000 forex market hours in a year. So if you test or trade a year’s worth of an hourly trend system, that is certainty. Refer to my post outlining how to get to certainty on each timeframe.
I know its difficult to combat the idyllic mindset, its so easy to chalk things up as unreasonable or impossible. Its just so enticing isn’t it, to do nothing in the face of tedious work and convince yourself that its unrealistic. Companies on the cutting edge don’t think this way. Its your choice to be an audience member, watching the world be built around you. Its an indication of an apathetic state, minus the a.
Emotion fuels accuracy.