Candles, Volume, and OBV- Stay On the Right Side!

oxusmorouz · #31 26th March 2007, 05:50 PM

Quote:

Originally Posted by winstonn

Hi oxus,

40-45% success rate and yet profit per trade is good. But i hope this requires excellent money management since you 55-60% trades will be wrong!!!!

Yes, it does require good money management (as you could see in the simulation). Trend following systems are charecterised by a small average loss per trade and comparitively higher average profit per trade. It is money management which keeps the system alive.

Quote:

Originally Posted by winstonn

What i mean to say is that the profit you get from any trade is

(success % * avg profit per trade) - (Probability of loss*Average loss per trade)
We could have a trade with 90% winning trades and a 5$ of average profit and a 10% losing trades with a 500$ average loss. The loss factor too is crucial in determining efficiency.

Quote:

Originally Posted by winstonn

now you have 40- 45 % success rate and good avg profit.
But world's best traders not only have good avg profit , money management,
but also incredible success rate.

Turtles had a strike rate of only 35%. They thrived in diversification and proper money management and were able to earn a return of 70% on an average (till they split up). Note: Some of the best traders in the world use discretionary trading and not a trading system. The winning trades in a day trading system too is often higher.

If we all traded like Larry Williams, who supplies the losers?

Quote:

Originally Posted by winstonn

So in conclusion if your success rate is less than 50% , you will make avg profit ( not excellent ) and it is possible that you might miss the Big profitable trade ( it's probability is less than 50% ) because of whatever reasons and this could reduce your profitability.

Winning trades play a significant role undoubtedly. However, it isn't necessary that the winning % should be more than 50%. Infact,a system I had come across which boasts of a 70% probability of success ended up with comparitively less expectancy per trade.
It's a trade off between expectancy and % winning trades....just like risk and return. It's kinda easy to say "minimize risk and maximize return", but how? (textbooks avoid this question,you might have observed)

uasish · #32 26th March 2007, 06:27 PM

oxy,
Excellent.So the goalpost gets visibility.

Asish

Luckytrader · #33 30th March 2007, 12:47 PM

Hi Sunil,

I have attached a chart of dhampur sugar in which OBV is changing trend & volume is also increasing...

What are your views on this?

Thanks

Luckytrader · #34 31st March 2007, 02:05 PM

Waiting for ur reply........

Is it right time to enter???

Linus · #35 31st March 2007, 03:00 PM

Quote:

Originally Posted by Luckytrader

Hi Sunil,

I have attached a chart of dhampur sugar in which OBV is changing trend & volume is also increasing...

What are your views on this?

Thanks

Hi Lucky,

Sorry! Saw your post but forgot to reply.

Volume has increased, but prices are not closing in the green, which shows there is selling at higher end of the daily range.

Regards,

ss

Luckytrader · #36 31st March 2007, 03:19 PM

Quote:

Originally Posted by sunil saranjame

Hi Lucky,

Sorry! Saw your post but forgot to reply.

Volume has increased, but prices are not closing in the green, which shows there is selling at higher end of the daily range.

Regards,

ss

Thanks

One more question - Does it mean that trend will change?

Linus · #37 31st March 2007, 04:22 PM

Quote:

Originally Posted by Luckytrader

Thanks

One more question - Does it mean that trend will change?

Hi Lucky,

I am attaching a long term weekly chart of Dhampur.

Regards,

ss

uasish · #38 31st March 2007, 06:58 PM

Where is the Candle , Vol & OBV analysis ?

Asish

Linus · #39 31st March 2007, 11:03 PM

Quote:

Originally Posted by uasish

Where is the Candle , Vol & OBV analysis ?

Asish

Hi Asish,

The chart was attached by Lucky and I had a look at it and responded.

Anyway, you have a point. I will do the annotations on this.

Regards,

ss

Luckytrader · #40 1st April 2007, 12:00 PM

Quote:

Originally Posted by uasish

Where is the Candle , Vol & OBV analysis ?

Asish

Hi ashish,

At least we are not off track from the topic of this thread.

It’s not case of Bharti & HLL…..

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