Veera's Trading Diary
- Thread starter Veeramuthu JJ
- Start date
Please look at my previous post, I edited it just now.
It could be that a strategy might give different results on different TFs because of variance or other factors but their profitability will still be dependent on statistical relationship between SL, TP & win-rate.
The simple point is that you can't drastically increase the profitability of a strategy by simply widening the TP because widening the TP will only reduce the probability of it being hit while simultaneously increasing the probability of SL being hit
It could be that a strategy might give different results on different TFs because of variance or other factors but their profitability will still be dependent on statistical relationship between SL, TP & win-rate.
The simple point is that you can't drastically increase the profitability of a strategy by simply widening the TP because widening the TP will only reduce the probability of it being hit while simultaneously increasing the probability of SL being hit
Last edited:
My custom screener-indicator considers 1m, 5m, 15, 1h, 4h & D but for practical reasons, I could say that I take a lot of my trades on 1m5m & 5m15m TFs. I used to post my trading-results here, not a lot of them but as I've said there, I felt it was affecting my trading, so I couldn't afford to carry on since this is my livelihood - http://www.traderji.com/community/threads/intraday-trading.105511/
Nonetheless, the statistical relationship between SL, TP, win-rate & drawdown doesn't change irrespective of the TF. Time has no impact on statistical relationships; 2+2 will be always be 4.
Good mantra to live by.
EDIT: Just to expand on the point a little more, let's say, you take a trade with an entry @1000, SL @990 & TP @1010. Now, it doesn't matter whether you THINK you took the trade based on 1m chart or you THINK you took the trade based on 1h chart because what actually determines the probability of success of that trade is the relationship between the distances of SL & TP from the point of entry, & how big the edge of your trading strategy is. Again, your PERCEPTION as to what TF you think you're trading on has no bearing on the probability of success of that trade.
Nonetheless, the statistical relationship between SL, TP, win-rate & drawdown doesn't change irrespective of the TF. Time has no impact on statistical relationships; 2+2 will be always be 4.
Good mantra to live by.
EDIT: Just to expand on the point a little more, let's say, you take a trade with an entry @1000, SL @990 & TP @1010. Now, it doesn't matter whether you THINK you took the trade based on 1m chart or you THINK you took the trade based on 1h chart because what actually determines the probability of success of that trade is the relationship between the distances of SL & TP from the point of entry, & how big the edge of your trading strategy is. Again, your PERCEPTION as to what TF you think you're trading on has no bearing on the probability of success of that trade.
I know, you're talking about a system that doesn't have a fixed TP but even under such a system, its average R profit booked could be considered its de facto fixed TP, & if you run your own tests, you might find that there's a certain R of fixed-profit that, in many instances, would likely enhance the profitability of the strategy over a system of trailing without targets. Again, while letting profits run sounds great in theory, putting it into practice is very difficult because seeking out big trends before they begin is incredibly difficult because it is uncommon enough for us to be likely to be caught off-guard when it does happen while most of the time, we're stuck with scratch-trades or losses; not to mention, staying in trends is equally difficult with all of the googlies & wrong-uns that markets throw at us; so, a lot of the times, one might think that the trend is reversing, only to realize that it was a just a deep correction whereas on other occasions, when one thinks it's just a deep correction, it turns out to be a reversal & one ends up giving back huge profits back to the market, & then you want to tear your hair out at that point. It is my belief that you have to be a master-trader to be able to navigate all of these twists & turns of the market without profit-targets, & I don't think vast majority of traders (including myself) are capable of doing that.
On a side-note, I'm not sure if Veeramuthu JJ's SL's are that big. The biggest one so far seems to be 72 points with BNF @ >25,000, which is barely 0.30% move whereas while trading 1m5m charts, my SL's almost always tend to be greater than 0.50%; though of course, I rarely wait for them to be hit since I enter on breakouts & start raising SL immediately whereas Veeramuthu JJ doesn't seem to be trailing (which might be a great thing in itself). Anyway, the point being that one's perception of one's trading-TF doesn't always accurately predict the size of their SL's.
On a side-note, I'm not sure if Veeramuthu JJ's SL's are that big. The biggest one so far seems to be 72 points with BNF @ >25,000, which is barely 0.30% move whereas while trading 1m5m charts, my SL's almost always tend to be greater than 0.50%; though of course, I rarely wait for them to be hit since I enter on breakouts & start raising SL immediately whereas Veeramuthu JJ doesn't seem to be trailing (which might be a great thing in itself). Anyway, the point being that one's perception of one's trading-TF doesn't always accurately predict the size of their SL's.
| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| N | RBI Puts Currency Trading on Hold | Futures | 0 | |
| D | Platforms and languages for automated trading | Algo & Automated Trading | 2 | |
| R | What are best trading indicators? | General Trading & Investing Chat | 5 | |
| H | can we make our own trading platform | Software | 4 | |
| N | Tradingview Competition | General Trading & Investing Chat | 0 |
Similar threads
-
-
Platforms and languages for automated trading
- Started by Dynamo2000
- Replies: 2
-
-
-