Bakwaas Trading

Discussion in 'Trading Diary' started by augubhai, Jun 25, 2013.

  1. augubhai

    augubhai Well-Known Member

    Joined:
    Jan 10, 2006
    Messages:
    8,662
    Likes Received:
    8,631
    Trophy Points:
    113
    i am not sure, but i think RKSV will charge for Nest. Let me check with them.
     
    Gandhar. likes this.
  2. Gandhar.

    Gandhar. Well-Known Member

    Joined:
    Nov 13, 2012
    Messages:
    2,699
    Likes Received:
    5,967
    Trophy Points:
    113
    yeah please keep me also posted about the same thing i also wanting to shift to fixed plan with less chargers:thumb:
     
    augubhai likes this.
  3. augubhai

    augubhai Well-Known Member

    Joined:
    Jan 10, 2006
    Messages:
    8,662
    Likes Received:
    8,631
    Trophy Points:
    113
    Actually, Escape would have all info about RKSV.... and Soft Trader knows about almost all the brokers.
     
    escape, Gandhar. and VJAY like this.
  4. VJAY

    VJAY Well-Known Member

    Joined:
    Jun 16, 2008
    Messages:
    6,239
    Likes Received:
    12,806
    Trophy Points:
    113
    No its free ...i think they mentioned it on their thread...
     
    escape, Gandhar. and augubhai like this.
  5. escape

    escape Well-Known Member

    Joined:
    Aug 8, 2012
    Messages:
    1,834
    Likes Received:
    2,561
    Trophy Points:
    113
  6. augubhai

    augubhai Well-Known Member

    Joined:
    Jan 10, 2006
    Messages:
    8,662
    Likes Received:
    8,631
    Trophy Points:
    113
    Why I do not win inspite of winning?

    It is easy to find a system with +ve expectancy. When I started out with the ORB in 2008, I had determined that the system had a win % of 25%, and reward:risk ratio of 4:1 (inclusive of costs). So, a positive expectancy.

    Now, the numbers may be right or wrong - but let's check if the system will work.

    If I have Rs. 1,00,000 and I risk Rs. 1000 (1%) per trade. Win % in 25%, so i hope to win 1 out of every 4 trades.

    So, after 20 trades (about 1 month):
    I win 5 trade = + Rs. 20000 (+4000 per trade)
    I lose 15 trades = - Rs. 15000 (-1000 per trade)
    Net = + Rs. 5000 or 5% per month

    If I risk Rs.2000 per trade, I will net 10% per month
    If I risk Rs.5000 per trade, I will net 25% per month
    If I risk Rs.10000 per trade, I will net 50% per month
    If I risk Rs.25000 per trade, I will net 125% per month
    etc, etc...

    And if I risk 100% per trade, then?

    This is the way I always trade, and this is why I always need to stop after sometime. This probably the most important thing that I need to take care of.

    So what is the problem with this logic? What is missing? What is the optimum risk for this system? If i take the optimum risk, will it be worth trading this system at all?

    Hint: http://www.sbrforum.com/betting-tools/streak-calculator/
     

  7. augubhai

    augubhai Well-Known Member

    Joined:
    Jan 10, 2006
    Messages:
    8,662
    Likes Received:
    8,631
    Trophy Points:
    113
    The streak calculator says that if I traded this system - with a 25% win rate - 1,00,000 times (i hope that is a large number of trades), chance that i will have a losing streak of 26 trades in 100%.

    that is;
    Series Length: 100,000
    Streak Length: 26
    Loss Probability: 75.000%
    Streak Probability: 100%

    If say I am comfortable with a drawdown of 25%, then I should be able to confidently risk 25%/26 - or 0.96% of my capital in each trade.

    Using the same 20 trade calculation -
    I win 5 trade = + Rs. 19200 (+3840 per trade)
    I lose 15 trades = - Rs. 14400 (-960 per trade)
    Net = + Rs. 4800 or 4.8% per month

    If say I am comfortable with a drawdown of 50%, then I should be able to (less confidently) risk 50%/26 - or 1.92% of my capital in each trade, and net 9.6% per month

    Now what are the risks with this logic? or how do i improve this system?
     
  8. Happy_Singh

    Happy_Singh Well-Known Member

    Joined:
    May 27, 2013
    Messages:
    1,438
    Likes Received:
    3,575
    Trophy Points:
    113
    Location:
    Here & Now :)
    Hello AB

    Your MM Maths is Solid. Now just add a dash of psychology to it to complete the recipe :D

    Create a 2 tier system for MM: Risk less from the capital and more from profits.

    Your calculations show that you should risk 0.93% on every trade divide it by 2, use approx 0.5% Risk

    Now make use of winning streaks, keep tab of the winning amount separately . . .

    Add 5% of the winning amount to the RISK

    e.g. you are using risk capital of 1L, Risk only Rs 500 on every trade

    Once you have made 10K, start using Rs 500 + 500 as risk amount . . .

    So this way the base capital remains safe, and the kida of taking extra risks is also satisfied.
    On losing streaks when the equity dips we automatically reduce the size.

    .
    EDIT: the above is just some additional Maths :)

    Now the Mind part:
    the above system incentives winning, most of us are into it for the thrills part (though very few will admit)
    Wanting to double the leverage is the carrot to make and retain that 10% and
    having to use only 1/2 of your mathematically allowed leverage is the stick
     
    Last edited: Jul 1, 2013
  9. augubhai

    augubhai Well-Known Member

    Joined:
    Jan 10, 2006
    Messages:
    8,662
    Likes Received:
    8,631
    Trophy Points:
    113
    So, here's where the rest of the system parameters come in...

    The initial SL for my ORB trades is about 35-40 points from entry. So taking risk as 40 points per trade, risk per lot is 40x50= Rs. 2000.

    If I risk 0.5%, my capital should be 2000/(0.5/100) = Rs. 4,00,000 per lot

    Even if I risk 1%, I need a capital layout of Rs. 2,00,000 per lot.

    Here is where the major component of the system - I (or my psychology) - comes in...

    margin requirements are less than Rs. 30000 per lot. And it is just not me to let the remaining Rs.1,70,000 idle per lot. I have the option of letting the remaining amount be in the bank - but if I call it my trading capital, i have a tendency of using it up on some trade of the other. So, per Rs. 2,00,000, I will try to trade 6-7 lots, and panic when the drawdown hits, and keep losing trading a system with positive expectancy!!!

    How do i handle this?
     
  10. Happy_Singh

    Happy_Singh Well-Known Member

    Joined:
    May 27, 2013
    Messages:
    1,438
    Likes Received:
    3,575
    Trophy Points:
    113
    Location:
    Here & Now :)
    Here You have hit the nail Bang on its Head.

    This game is designed so that the "AAM ADAMI" can never win, the leverage allowed is itself a V V V Big Big Big part of the Game Design


    How do we handle this?


    .
     
Loading...

Share This Page