[bakrob99]

Originally Posted by muskoka joe »

... You can certainly have good workable systems that run less then 1:1 RR... .

I used to think this too... but no longer do. I have kept statistics on my actual entries for years and reviewing them shows/reveals that the winning trades which I take go for quite a distance and easily provide 12 ticks Best Exit for the ES while having a stop requirement of 6 or even fewer ticks.

Do the math and you'll discover that the money is in Staying in the trade when its a winner and getting out when it's not.

Forget about RR mumbo jumbo ... it's common sense.

[muskoka joe]

Originally Posted by bakrob99 »

I used to think this too... but no longer do. I have kept statistics on my actual entries for years and reviewing them shows/reveals that the winning trades which I take go for quite a distance and easily provide 12 ticks Best Exit for the ES while having a stop requirement of 6 or even fewer ticks.

Do the math and you'll discover that the money is in Staying in the trade when its a winner and getting out when it's not.

Forget about RR mumbo jumbo ... it's common sense.

I think you are right in the sense you are talking about the what the thread was talking about .... scalping and day trading and probably discretionary at that. I was speaking more to systems that involve more then a few ticks. I should have paid more attention to what the thread was.

[bakrob99]

No problem. I have done quite a bit of automated strategy development and trading on tradestation and I have yet to find a system which enters or exits as well as a discretionary trader following a set of proven rules.

Of course - automation allows more markets to be traded and risk spread out ... just need to be able to handle the drawdowns. I can't.

[BlowFish]

Be aware that systems that only take a couple of ticks often trade worse than they test (depending how you test them). Make sure you are testing by buying at ask and selling at bid or if the system uses limits you really need to make sure price trades through your entry/exit.

Work out the risk of ruin, run monte carlo simulations and decide for yourself if the system 'makes sense'.

[rjrow104]

Do the math, its called expectancy,


(90%*.5) per contract= .45/contract
(10%*1.5)*all contracts=.15 Loss per contract
the difference is your expectancy

so you will average .3pts per every contract

Now, this is obvious and I am sure many on here already know this, but make sure that you check this across at least 1000 trades, and thats pretty low but if your aggressive its a pretty good measure