But what happens when you lose 6 in a row? You continue adding more risk each transaction? Plus, as you lose 60% of the time your risk per trade tends to drift higher and higher.
But what happens when you lose 6 in a row? You continue adding more risk each transaction? Plus, as you lose 60% of the time your risk per trade tends to drift higher and higher.
Your idea is quite like Martingale.
Sometimes it breaks down as you simply don't have the bank to endure a lengthy series of losses.
This doesn't have anything to do with being (I quote from the article above) wrong to predict that the winning ratio of your egy. Even with a perfect forecast of the average success rate, you will inevitably at some point in time encounter a chain of losers, just like you will occasionally encounter a collection of winners. If you don't know that, it is better to stay out of the business - and from the gaming business.
40763Exactly. Unfortunately these kinds of MM tactics don't work or we'd all be rich. He had to do would be to move a coin 50 times and he will likely find a few streaks even.
Thing if you're trading with a goal to lose or make 1,000 pips based on fundamentals or 5 pips based on technicals price can go up or down. If your fundamental view is correct, it can move a few pips, maybe several hundred. So what we should do? This simple thing that Hanover mentioned. Keep your position sizes small. This way if you are meagerly about the market movements, cannot lose much and for extended. ....and not dropping for extended is the money management in trading Currency Market.
95070Far overly preoccupied (and a bit absurd, too ).
Just trade and stop putting TP's that restrict your profits, as that's the principal restriction on doing nicely. Put on transactions with a reasonable lot dimensions (rough estimate, based on capital, margin, other transactions available, etc.) and then stick with this. As the capital increases, you may start to raise the lot size straight proportional (or slightly slower, to decrease risk). If capital begins to diminish, then reduce the lot dimensions.
All of this predictive counting of percent losers and percent winners only seems like fingers in the wind.
ROI is something that you do at the end of the week or month to either give you a wake-up call which you are not doing as well as you need to, or doing very well and possibly wish to re-assess the risk taken, to make sure it has not been out online.
95070Spot on,,,
Yes that is right.... You're allowed to be wrong, you are allowed to be correct, you are allowed to be whatever the fuck you wish tonight.
But you gotta fight
95070Hmm again as you don't give the algorithm I can not be sure of the following but... you increase the size once your recent history winrate is under the average winrate and you reduce the size once the current winrate is above average. The size increases, when you get a string of losers. A fixed or a MM is going to not be BIGGER than the DD. For exactly the identical reason when you get an unsual series of winners you reduce the size and so limit the profits. The profits will be LOWER than a MM or a fixed. If you post the algo I could look in the thought. However, for now it is really looking like the http://en.wikipedia.org/wiki/Gambler's_fallacy. And that has nothing to do with the acuracy of the estimation of the winrate. It's possible to use a coin, with understand chances, to check by yourself: extended sequence of thoughts will take place.
95070When you're using a system it is not possible that you obtain a cash management technique that's statistically any better than the percentage. You can get fooled very easily by simulations (or historical results too ), since any profitable simulation/historical result gains from aggressive lot size increases above the average drawdown period depth, simply because in the simulation it's a simple fact that the machine always recovers. When a machine reaches a DD than that which you see on your simulator //history you may run into a hole than you'd have if you hadn't used this kind of management. Since PipMeUp says a mirage where cash management hides simulated/historical loses at the cost of much worse loses when conditions change beyond those of their simulations.
However once you have several systems (I generally trade 100 algo egies in some time), there is a lot you can do to play with your risk alloions to diminish risk and raise potential profits. When you trade arrays of systems you find a whole new world opening up.