$1,000,000 QUESTION

forex live trades, setups, charts

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TheRumpledOne
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Postby TheRumpledOne » Wed Sep 26, 2007 12:54 am

If you win $104 and lose $100, isn't that 50-50?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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casinoman
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Postby casinoman » Wed Sep 26, 2007 1:53 am

Not what I would define as 50-50 proposition (semantics). It is a representation of 4% yield to 4x=0's post.

Here is chart expressing a wider range of posibilities to achieve same expectation - different factors:

"Technicians never die - they just chart away"
Trade like a Lemming but don't jump off the cliff like the others

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Postby 4x=0 » Thu Sep 27, 2007 2:57 am

I'm talking about stop size. A nine pip stop requires ~10% risk for earning 4% on your account once netting the 4 pips. If you want to earn 4% by grossing 6 pips you need to risk enough to change your account 1% per tick. If you need 4% on 4 ticks, you must risk 10%. How many ticks at 1% per tick until 10% is spent? ...About 9.

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Postby TheRumpledOne » Thu Sep 27, 2007 5:21 am

This is an ALL IN TRADE!

You risk your entire account each trade to run it from $500 to $1,000,000.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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casinoman
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Postby casinoman » Thu Sep 27, 2007 2:32 pm

OK - OK we understand that it is an "all in strategy" - the postings went a little astray, lol.

If you put all the marbles on the line every time - win or lose - for a month (approx 20 trading days) with the hoped for benefit of winning every time to get an extraordinary pot of gold, you most likely will not win in the short run - will utimately succeed in the long run if your bankroll is big enough. Even if you had a 25% advantage the odds of prevailing are 1,099,511,627,775 to 1. If your advantage was 75% the odds against are 317 to 1 which means an average bankroll risk of $158,500 ($500 * 317).

4x=0, understand your point. I was relating to bankroll requirements and you were relating to individual transaction.
"Technicians never die - they just chart away"

Trade like a Lemming but don't jump off the cliff like the others

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Postby casinoman » Fri Sep 28, 2007 12:29 am

4x=0,

Isn't it also true that out of 100 identical trials one must win 72 and can only lose 28 to maintain the 4% yield?
"Technicians never die - they just chart away"

Trade like a Lemming but don't jump off the cliff like the others

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Postby 4x=0 » Fri Sep 28, 2007 9:49 pm

One need win 100 and lose 0 to maintain 4% yield.

Assume 4% capital gain or loss per trial (all-in with 4 tick stop).

72% win returns an expected 1.76% out of 100 identical trials.

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Postby casinoman » Sat Sep 29, 2007 3:18 am

Ah, you're right - forgot about the all-in. It is risk 100% to gain 4%.

Your calculation of 1.76% is also correct relative to a 4% win of 72 times or a 4% loss of 28 times.

My posting of 4% was based on risking 9 pips to net 4 pips with 72% wins and 28% loses.
(.72 * 4) - (.28 * 9) = 2.88 - 2.52 = .36 pip expectation
.36 pip expectation / 9 pips risked = 4% epectatation/yield
"Technicians never die - they just chart away"

Trade like a Lemming but don't jump off the cliff like the others

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Postby BC » Sat Sep 29, 2007 1:43 pm

Don't forget about your commission or spread when calculationg your risk

The broker gets his share first.

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Postby BC » Sun Sep 30, 2007 2:46 pm

for anyone interested in scalping the FX markets I found this video you might like to watch first.(risk) you will need adobe flash installed in order to view the video, enjoy

http://www.mediafire.com/?a40ycfhje8m

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