The Cowabunga System

[Cowaboi]

One more question Cowaboi … So that I better undestand your multiple-orders approach, regading your [U]2nd order[/U]:
[ol]
[li]Do you enter it at market price at the same time as the 1st order but without a take-profit order attached to it? OR
[/li][li]Do you enter it as an entry order instead with an entry price equal to the take-profit target of the 1st order?[/ol]Thanks again for your assistance.

[/li]
1.

Good luck.

[daxm]

Boy did I miss most of the short move today! I only got 25 pips or so and it has dropped almost 200!

I know I didn’t properly interpret based on the Cowabunga System but assuming that I had what should I have done with my SP and Limits? OR should I just be glad that I made 25 pips and not worry that I missed most of the move?

(I think I’m learning a bit about my own psychology here.)

[Cowaboi]

Boy did I miss most of the short move today! I only got 25 pips or so and it has dropped almost 200!

I know I didn’t properly interpret based on the Cowabunga System but assuming that I had what should I have done with my SP and Limits? OR should I just be glad that I made 25 pips and not worry that I missed most of the move?

(I think I’m learning a bit about my own psychology here.)

know how you feel, but the next one will be along soon. The method averages about 35 pips per winner, so it doesn’t hoover the daily range particularly effeciently, but it doesn’t have to, as long as you’re able to trade the rules to the letter and do that day-in, day-out.

[daxm]

know how you feel, but the next one will be along soon. The method averages about 35 pips per winner, so it doesn’t hoover the daily range particularly effeciently, but it doesn’t have to, as long as you’re able to trade the rules to the letter and do that day-in, day-out.

That is what I intend to do! Go figure on my first trade using this system I miss 90% of the move though. np though. Just learning right now!

[tonymand]

Boy did I miss most of the short move today! I only got 25 pips or so and it has dropped almost 200!

I know I didn’t properly interpret based on the Cowabunga System but assuming that I had what should I have done with my SP and Limits? OR should I just be glad that I made 25 pips and not worry that I missed most of the move?

(I think I’m learning a bit about my own psychology here.)

Read todays Blog from PS. Turns out you were right but for the wrong reasons! Never seen a 4H direction change overuled by Stochastics before which meant your short was spot on. Using Cowabunga rules an exit at the round number was the best you could have done. Do not ruminate over so called ‘missed’ profits. Remember in real time you have no idea whats going to happen

[Cowaboi]

…quick pic while waiting for GBP Trade Balance at 9:30. 1st cowabunga trade this morning, on the dip down to the 50 level.

[tonymand]

…quick pic while waiting for GBP Trade Balance at 9:30. 1st cowabunga trade this morning, on the dip down to the 50 level.

Agree with your entry but that is a very low R with a take profit at 13pips less spread and a stop in the region of 28 (ie 0.3R). Reckon your minimum would have to be 1R so close to the round number

[Cowaboi]

Agree with your entry but that is a very low R with a take profit at 13pips less spread and a stop in the region of 28 (ie 0.3R). Reckon your minimum would have to be 1R so close to the round number

Yes, a riskier trade but one that I was comfortable with prior to the Trade Balance.

[cristi12]

Hehe I got the same trade. Waited 'till 2 AM to see some action before today’s news. Slim pickings though, but hey, as long as it’s not a loss…

[hypnos63]

i hope this is not a hijack. but what is ‘R’

[tonymand]

i hope this is not a hijack. but what is ‘R’

R is risk reward ratio. So make 20 pips on a trade with a 20 pip stop your profit is 1R. This is much more meaningful than pips (which actually mean nothing)

[daxm]

R is risk reward ratio. So make 20 pips on a trade with a 20 pip stop your profit is 1R. This is much more meaningful than pips (which actually mean nothing)

I’m sure it is calculated on a order by order basis but is there some methodology on what risk/reward ratio to take? To me a 1R seems not to be a profitable way to work (if your system has a 50% or so success rate). I would suspect something more like 1.5R as a bare minimum.

[tonymand]

I’m sure it is calculated on a order by order basis but is there some methodology on what risk/reward ratio to take? To me a 1R seems not to be a profitable way to work (if your system has a 50% or so success rate). I would suspect something more like 1.5R as a bare minimum.

Depends on your system. The Asia high/low system I trade has a 1R profit target and a 66% win loss ratio. Hence it is highly profitable. Like all these things you have to consider the whole package. Cowabunga trades are often less than 1R as you will see by PS’s results

[daxm]

Depends on your system. The Asia high/low system I trade has a 1R profit target and a 66% win loss ratio. Hence it is highly profitable. Like all these things you have to consider the whole package. Cowabunga trades are often less than 1R as you will see by PS’s results

I haven’t seen PS’s results yet. However, a < 1R would only work if your success rate was quite good (like 75+%) wouldn’t it?

[tonymand]

I haven’t seen PS’s results yet. However, a < 1R would only work if your success rate was quite good (like 75+%) wouldn’t it?

No, as I say it depends on a number of factors and these are covered well in Van Tharps ‘Trade your way to Financial Freedom’. Clearly if all your trades were less than R with a less than 50% hit then you are losing money and need a new system. Although unrealistic consider a system with a 55% hit rate, profit 1R and doing 100 trades per day at 2% risk. We would make 20% per day from such a system. Do you get the idea, there are a lot of factors to consider. Now consider a system that gives you 10R and has a 100% hit rate. You would probably say give me that system but if it only trades once per year which would you rather have now 20% per day or 20% per year

[linalm]

No, as I say it depends on a number of factors and these are covered well in Van Tharps ‘Trade your way to Financial Freedom’. Clearly if all your trades were less than R with a less than 50% hit then you are losing money and need a new system. Although unrealistic consider a system with a 55% hit rate, profit 1R and doing 100 trades per day at 2% risk. We would make 20% per day from such a system. Do you get the idea, there are a lot of factors to consider. Now consider a system that gives you 10R and has a 100% hit rate. You would probably say give me that system but if it only trades once per year which would you rather have now 20% per day or 20% per year

Hi Tonymand - I searched for Van Tharps post and could not find it. Is there a link you can provide? Also, would you please elaborate on your math to get to the 20% a day? I’m not sure I follow you.

Thank you!

[daxm]

Hi Tonymand - I searched for Van Tharps post and could not find it. Is there a link you can provide? Also, would you please elaborate on your math to get to the 20% a day? I’m not sure I follow you.

Thank you!

Let me see if I can answer this. Tonymand can repremand me later.

Since you only have a 55% success rate that means you have a 45% loss rate. Give that the ratio between success and loss are equal (1R) then the difference between the success and losses yeilds your profit gain/loss. In this case 55%-45%=10%. Only risking 2% of your account (money management) on 100 trades means that you’ve gained 20% to your account. The math would be 10% x 100 x 2% = 20%

Is that right Tonymand?

[linalm]

Let me see if I can answer this. Tonymand can repremand me later.

Since you only have a 55% success rate that means you have a 45% loss rate. Give that the ratio between success and loss are equal (1R) then the difference between the success and losses yeilds your profit gain/loss. In this case 55%-45%=10%. Only risking 2% of your account (money management) on 100 trades means that you’ve gained 20% to your account. The math would be 10% x 100 x 2% = 20%

Is that right Tonymand?

It makes sense now. Thank you for your explanation.

[tonymand]

Let me see if I can answer this. Tonymand can repremand me later.

Since you only have a 55% success rate that means you have a 45% loss rate. Give that the ratio between success and loss are equal (1R) then the difference between the success and losses yeilds your profit gain/loss. In this case 55%-45%=10%. Only risking 2% of your account (money management) on 100 trades means that you’ve gained 20% to your account. The math would be 10% x 100 x 2% = 20%

Is that right Tonymand?

Spot on, only reprimand is for being too smart!!!

[tonymand]

[QUOTE=linalm;35254]Hi Tonymand - I searched for Van Tharps post and could not find it.

Not a post, its a book. He is a well known trading coach with a psychology background