2009.06.24 WHY 95% OF TRADERS LOSE PART III

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lukx
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Postby lukx » Sun Jun 28, 2009 3:20 pm

TheRumpledOne wrote:Image

Lime = High - Open

Green = Close - Open

Crimson = Open - Close

Red = Open - Low

If you pick ONE DIRECTION and only trade in that direction, how many times do you win? lose? How much can you win? Remember, your loss is fixed at 8 pips ( + spread ). Is there a point where you can quit while you're ahead? Do you make your daily goal? Do you win or lose overall? Remember, if there is a way to lose, count it as a loss.



????

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Postby forexbob » Sun Jun 28, 2009 3:30 pm

TheRumpledOne wrote:Image

Lime = High - Open

Green = Close - Open

Crimson = Open - Close

Red = Open - Low

If you pick ONE DIRECTION and only trade in that direction, how many times do you win? lose? How much can you win? Remember, your loss is fixed at 8 pips ( + spread ). Is there a point where you can quit while you're ahead? Do you make your daily goal? Do you win or lose overall? Remember, if there is a way to lose, count it as a loss.



looks like that would be profitable, that you will have an edge in the long run. all statistics giving that ..... but .... whatif your stoploss is not 8 but 9 or 7 or 13 will you edge become better or worse?

what happens when you fix your tp at X pips instead of take what you can or set a trailing stop when x pips in profit?

probably i just have to kill my lazyness and find out.

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Postby Humble » Mon Jun 29, 2009 12:04 am

TheRumpledOne wrote:Lime = High - Open, Green = Close - Open, Crimson = Open - Close, Red = Open - Low

If you pick ONE DIRECTION and only trade in that direction, how many times do you win? lose? How much can you win? Remember, your loss is fixed at 8 pips ( + spread ). Is there a point where you can quit while you're ahead? Do you make your daily goal? Do you win or lose overall? Remember, if there is a way to lose, count it as a loss.


" if there is a way to lose, count it as a loss."

Well if we assume a 2 pips spread + the 8 pips s/l, with a 10 pips tp and go long. Then we lost on 16 out of 26 bars, in what was a clear up move.

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TheRumpledOne
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Postby TheRumpledOne » Mon Jun 29, 2009 12:13 am

So a loss of 160 if you traded all of the bars.

You didn't answer the rest of the questions.

Is there a point where you can quit while you're ahead? Do you make your daily goal? Do you win or lose overall? Remember, if there is a way to lose, count it as a loss.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby wannabe21 » Mon Jun 29, 2009 2:29 am

Image

If I trade all 26 candles, and a winning day is > +9 pips . . .

Trading SHORT, I lose if my limit is < 34 pips per trade (the 14th candle brings me positive, but I lose if I continue trading any more).

Trading LONG, I almost can't lose.

In the image, the running totals are what matters.

The "Max" columns mean I timed the market perfectly and took the max # of pips each trade, less spread. Not possible, but I'm just showing what could be.

The "Lim" columns mean that I'm using a limit, so I can't win more than that, but if my limit is too big, then I take whatever there is at the end of the candle (win or lose) less the spread.

The "Run" columns means that the trade ran for 60 minutes and the take is based on the open-close or close-open price less the spread.

I uploaded the spreadsheet so you guys can play with changing the spread, stop, and limit values (the chart will recalculate itself, and neg numbers will always be red). To pick and chose your trading hours, just blank out the values under "Hourly Totals" for those hours you won't be trading.

I don't know how Alpari's server time compares to GMT, so I just assume that the times are GMT for this exercise. That's how I chose my personal trading candles.

For me, I have to work and sleep and spend some time with my family, so trading each hour for 26 hours just isn't feasible. Based on hours I can trade, I lose 50 pips if I trade SHORT, but I do end up 10 to 30 pips ahead if I trade LONG (after 30 pips, I lose if I continue to trade).

Of course, it is possible to win trading SHORT if you trade the right candles :wink:

Oh . . . I'm still new to trading, so if my calculations are wrong someone please fix it AND let me know so I can correct my own understanding. Thanks.
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Postby forexbob » Mon Jun 29, 2009 8:08 am

TheRumpledOne wrote:So a loss of 160 if you traded all of the bars.

You didn't answer the rest of the questions.

Is there a point where you can quit while you're ahead? Do you make your daily goal? Do you win or lose overall? Remember, if there is a way to lose, count it as a loss.


if there is a poinbt to stop when you are in profit and you stop ... then it looks like a casino system.

as you dont know the outcome of a trade, why not take the next trade and the next etc.

and then the bpttom line question is do i have qn edge, and it is quite rough to count it as a loss when thats possible its quite possible thqt a nomber of these 'losses' are actually a win because of the rules you define for exit (for example when price goes >10 in profit i take the profit when price reverts. otherwise it could hit my sl. biut when sl not hit it can after i took the 10 give a run up i miss)

so it all depends on finetuning the rules if and how profitable it will become

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Postby forexbob » Mon Jun 29, 2009 8:24 am

wannabe21 wrote:Image

If I trade all 26 candles, and a winning day is > +9 pips . . .

Trading SHORT, I lose if my limit is < 34 pips per trade (the 14th candle brings me positive, but I lose if I continue trading any more).

Trading LONG, I almost can't lose.

In the image, the running totals are what matters.

The "Max" columns mean I timed the market perfectly and took the max # of pips each trade, less spread. Not possible, but I'm just showing what could be.

The "Lim" columns mean that I'm using a limit, so I can't win more than that, but if my limit is too big, then I take whatever there is at the end of the candle (win or lose) less the spread.

The "Run" columns means that the trade ran for 60 minutes and the take is based on the open-close or close-open price less the spread.

I uploaded the spreadsheet so you guys can play with changing the spread, stop, and limit values (the chart will recalculate itself, and neg numbers will always be red). To pick and chose your trading hours, just blank out the values under "Hourly Totals" for those hours you won't be trading.

I don't know how Alpari's server time compares to GMT, so I just assume that the times are GMT for this exercise. That's how I chose my personal trading candles.

For me, I have to work and sleep and spend some time with my family, so trading each hour for 26 hours just isn't feasible. Based on hours I can trade, I lose 50 pips if I trade SHORT, but I do end up 10 to 30 pips ahead if I trade LONG (after 30 pips, I lose if I continue to trade).

Of course, it is possible to win trading SHORT if you trade the right candles :wink:

Oh . . . I'm still new to trading, so if my calculations are wrong someone please fix it AND let me know so I can correct my own understanding. Thanks.


thanks for this small whatif ... but for having a better pictue i think you have to take much more data (1 year+) and then maybe eliminate the periods in which you are not able to trade. probably london & NY session are the most active and have probably longer bars.

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Postby TheRumpledOne » Mon Jun 29, 2009 10:59 pm

The best way to understand this is by doing it not by backtesting.

Open a demo account and test it live.

I use
MB TRADING
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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fectech
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Quick Draw

Postby fectech » Wed Jul 01, 2009 3:19 pm

Hey I have just one question - how the hell do you get in to the trade quick enough.

I sit and wait till the new candle arrives, having already opened my trade window, as the the new candle arrives i quickly calculate the entry piont but half the time the price moves so quick i'm left holding my ****.

Please be gentle this is my first time.

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Postby TheRumpledOne » Wed Jul 01, 2009 11:25 pm

There is more than one way to enter a trade.

Market order ( never )

Limit order ( most of the time )

Buy Stop order ( some of the time )

etc...


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IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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