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Jack Francisco

Is There a Strategy Wins 90%

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As described Title

I want a strategic win at least 90%

And are not an old thought And be simple and easy and uncomplicated

awaited your responses:helloooo:

 

If someone gave you a strategy that worked 90% of the time for them, it will not work 90% of the time for you based upon some of the following reasons you stated yourself in another thread:

 

* be careful of the money management

* be strict with your trading system

* keep out your emotions

 

The few reasons above that were mentioned by yourself are just a few of many other reasons that you didn't mention that will prevent you from duplicating in real trading ( with real money) the results of someone's 90% winning system.

 

Also, another reason not mentioned by you is that market conditions are always changing many times every year. A 90% winning system will eventually have a drawdown period. Will you be experience enough to adapt to minimize the drawdown or will you come back looking for another 90% winning that performs well in a new market condition...outperforming your prior winning system.

 

If the system does exist and is automated...it will be too expensive for you and it will eventually have drawdown. If the system is discretionary...the key element in the system is the trader that has the ability exploit the system. Thus, a 90% winning discretionary system is just an extension of a great trader.

 

My point is that a 90% winning system has a great trading plan. Thus, all the variables in that trading plan are working together well as a team. Variables like market experience, psychology of the trader, discipline, money management, proper capitalization, position size management, proper trading instrument for your trade strategy, stress management, proper broker platform, proper trade workstation, proper trade environment, team collaboration et cetera.

 

Therefore, a profitable simple 90% system is by a great trader that has found a way bring together those other variables that may seem like complicated ingredients in the team to another trader.

 

A simple method that's consistently profitable is accomplishing such because the trader has a deep and complex understanding of today's markets along with being able to adapt the trading plan (not the method) to maintain profitability when markets change.

Edited by wrbtrader

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Hi Jack,

 

There are strategies that show a 90% historical win rate, but there are also many good reasons not to get too hung up on them:

 

1. They trade very infrequently (because they're always waiting for a 'sure thing'). This means that you'll be trying to make a decent dollar return from a scant few trades, which means that you'd need to load the boat for each one. It's not just about expectancy, but also opportunity (the frequency with which a system trades, allowing you to exercise its edge).

 

2. For the reason given in 1 above, historical performance is likely derived from a statistically insignificant set of trade results.

 

3. Win rate is an almost meaningless measure of system performance. What if you only had a 10% win rate but your winners were 20 times larger than your losers? You'd make money (indeed, that's roughly how many trend following funds operate, trading for outsized gains on outlying moves). The only way in which win rate is really relevant is from a psychological perspective - it will need to be reasonably high if you struggle to deal with losses. There's nothing wrong with this - I can't really handle anything with less than a 50% win rate, even though it might make money, so I deliberately focus on things with higher win rates. At the same time, I realise this has nothing at all to do with performance.

 

Hope that's helpful to you,

 

BlueHorseshoe

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As described Title

I want a strategic win at least 90%

And are not an old thought And be simple and easy and uncomplicated

awaited your responses:helloooo:

 

helloooo:

 

I have a strategic win at least 90%

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Some of the replies so far are incorrect. There are a few systems that are 90% and even 90%+. However these systems are not profitable. The ones that have a remote chance to be profitable will only take 40+ years to do so. So if you want to trade at 90% then realize you need to find a real job to support yourself. Also the 40 year plan will require you to keep putting funds into your account every month. I would imagine that this forum is filled with 90% plans. Now ask if those same plans have any real profits and that is a different story.

 

90% systems are usually the most difficult to trade. As a new trader you really don't want to trade a 90% system. The reason is simple. 90% systems are not more profitable then a system that is 40% that is profitable. I don't believe that there is a system that is 90% and legal that doesn't cost an insane amount of emotional capital. They usually rank 10 out of 10 on the effort scale and are below 5 out of 10 on the profit scale.

 

Are you looking to trade a system that fits some criteria? Are you looking for a system that makes money? There is a difference between the questions. Are you are looking for a system that fits the criteria of making money? If so then how much emotional capital are you willing to spend?

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Right ho ....

 

90% is now off the dance card, and so where do you fellows think that the law of diminishing returns kick in.

 

Do you think that 80% on an intraday basis is an optimal base from which to manipulate your 'protective stop' and 'take profits stop' or is 66% more realistic (win 2, lose1)

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Right ho ....

 

90% is now off the dance card, and so where do you fellows think that the law of diminishing returns kick in.

 

Do you think that 80% on an intraday basis is an optimal base from which to manipulate your 'protective stop' and 'take profits stop' or is 66% more realistic (win 2, lose1)

 

you are asking the wrong question.

 

no problem, many people before you have attempted the same fate, with predictable results.

 

 

there are more than one way to skin a cat,

how do you want to skin yours?

 

 

Here's some examples of ES traders...

 

TraderA makes quick trades...

he would be in and out of the market before you can blink your eyes. He averages 50 trades a day, sometimes more, sometimes less. He makes 1 to 2 ticks per trade. His win rate is 90%. When he loses, he loses 5 to 10 ticks.

 

Is he a good trader?

Is he making money?

Would you like to trade like him?

 

 

TraderB is a slow trader..

He makes an average of 10 trades a week, sometimes more, sometimes less.

He has a 40% win rate.

When he wins, he makes 4 pts,

He always has a 2 pt stop. (assume he fills at 2 pts)

 

Is he a good trader?

Is he making money?

Would you like to trade like him?

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you are asking the wrong question.

 

no problem, many people before you have attempted the same fate, with predictable results.

 

hello Tams

 

I used the word 'optimal' quite deliberately because there is ( IMO) an optimal base of accuracy beyond which the laws of diminishing returns apply.

So let us progress beyond "the hare and the tortoise" please.

 

I am interested in your experiences as a Trader .....

In the case of intraday trading, where do you think that this optimal baseline lies?

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you are asking the wrong question.

 

no problem, many people before you have attempted the same fate, with predictable results.

 

 

there are more than one way to skin a cat,

how do you want to skin yours?

 

 

Here's some examples of ES traders...

 

TraderA makes quick trades...

he would be in and out of the market before you can blink your eyes. He averages 50 trades a day, sometimes more, sometimes less. He makes 1 to 2 ticks per trade. His win rate is 90%. When he loses, he loses 5 to 10 ticks.

 

Is he a good trader?

Is he making money?

Would you like to trade like him?

 

 

TraderB is a slow trader..

He makes an average of 10 trades a week, sometimes more, sometimes less.

He has a 40% win rate.

When he wins, he makes 4 pts,

He always has a 2 pt stop. (assume he fills at 2 pts)

 

Is he a good trader?

Is he making money?

Would you like to trade like him?

 

Trader A is a loser, given commissions and the spread.

 

No, No, and No.

 

Trader B taking 10 trades a week makes about $30 per contract traded.

 

Trader B achieves profits, but can suffer long spells of draw-down as the long run works itself out.

 

Maybe, Maybe, and No.

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hello Tams

 

I used the word 'optimal' quite deliberately because there is ( IMO) an optimal base of accuracy beyond which the laws of diminishing returns apply.

So let us progress beyond "the hare and the tortoise" please.

 

I am interested in your experiences as a Trader .....

In the case of intraday trading, where do you think that this optimal baseline lies?

 

are you and Jack Francisco the same person?

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are you and Jack Francisco the same person?

 

No ... I am just a guy who approaches Intraday trading as a game of numbers

and IMO there is an optimal zone for win/loss ratios.

 

Obviously there are days when you can stray above it, but there are seldom days when you dip below it unless you have failed to follow your own rules.

 

That zone IMO is set around 80% based on the outcome of hundreds of trades based on ES price waves each day .

 

If I add another filter, my net total tick count drops for the day over a period of five+ days, so that is useless .... and try as I might I cannot move the average win/loss ratio consistently higher than I am currently achieving ... it is as though I have hit a brick wall either based upon the law of probabilities or I am staring something in the face and I cannot see it .... (now I have just written this, it reminds me yet again that this is the story of my fifteen years in trading .. ten of them with ES)

 

That of course leaves one variable to play with and that is size

With one mouse click any one of us can control the size of our business at any time.

 

Just try to do that in the outside world.... for example if you own a small company employing say 50 people and you decide to double the sales turnover thereby tripling the net profit through the economies of scale, the exercise becomes both enormous and risky.

 

However ......If you are happy with your trading ratios at five contracts and you wish to double your turnover then just increase 5 to 10 contracts and all the ratios remain in proportion.

Granted, if your size reaches a level where you cannot be filled in one hit, you will need to adjust your entry/exit plan ... but what a delightful problem to solve.

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If I add another filter, my net total tick count drops for the day over a period of five+ days, so that is useless .... and try as I might I cannot move the average win/loss ratio consistently higher than I am currently achieving ... it is as though I have hit a brick wall either based upon the law of probabilities or I am staring something in the face and I cannot see it .... (now I have just written this, it reminds me yet again that this is the story of my fifteen years in trading .. ten of them with ES)

 

If you have a thoroughly-tested, consistently profitable trading plan and you follow it in a disciplined manner, consider the possibility that you're trading the wrong instrument. Perhaps applying your plan to a different instrument might enable you to break through that wall and achieve a higher winrate.

 

Db

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If you have a thoroughly-tested, consistently profitable trading plan and you follow it in a disciplined manner, consider the possibility that you're trading the wrong instrument. Perhaps applying your plan to a different instrument might enable you to break through that wall and achieve a higher winrate.

 

Db

gm DbP,

 

I like the ES ...I like it's intraday price waves and I do believe that trading the same instrument becomes intuitive over time as our minds retain the behaviour of thousands and thousands of these price waves.

 

Actually I am not sure that 'intuitive' is an ideal choice of word but it will have to suffice for the sake of this post.

 

I do trade currencies on a longer TF but I can only cope with one intraday instrument as I watch the ES build during the course of the session and I watch it's relativity to previous days/weeks etc ... in a manner not unlike Steve46 ... in fact many of our lines fall at the same values, which makes sense really.

 

Anyway, for better or worse, the ES and I are locked together until something changes and causes a re think.

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If you have a thoroughly-tested, consistently profitable trading plan and you follow it in a disciplined manner, consider the possibility that you're trading the wrong instrument. Perhaps applying your plan to a different instrument might enable you to break through that wall and achieve a higher winrate.

 

Db

 

DB,

 

Discipline is very important. Discipline along with patience.

 

There is no way to thoroughly test a plan and consistently profitable may mean long periods of no trade which makes "consistently profitable" a dubious concept. Going long periods of no trade or of also staying in the same trade for a long period does take patience and discipline. There is no doubt there.

 

IMO a thoroughly tested and consistently profitable plan is sought after and attainable but unattainable in a way that is pleasing to the mind. A trader's Nirvana.

 

 

MM

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I disagree that there is no way to thoroughly test a plan, though I suppose it depends on what one means by "thorough".

 

As to the other, one can be consistently profitable every day. Depends on the plan and the management.

 

Db

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I disagree that there is no way to thoroughly test a plan, though I suppose it depends on what one means by "thorough".

 

As to the other, one can be consistently profitable every day. Depends on the plan and the management.

 

Db

 

I totally agree with you on both counts.

 

My suggestion to any Newcomer attracted to this thread by it's seductive Title, is to make your two statements above, a part of their core belief of trading and never ever let them go.

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No ... I am just a guy who approaches Intraday trading as a game of numbers

and IMO there is an optimal zone for win/loss ratios.

 

This is not true. I realize its an opinion but if you are trying to make money then it has almost no connection. The main reason is because of from the start of the post no one has been able to define what a loser is and the definition is automatically assumed that its a loss. In trading a loss is not always a loss and a profit is not always a profit. You need a better way to measure then win/loss. Most traders I know do not measure success by win/loss but rather account size. I did look at my ladder for the month and I am in the high 60s and after looking at a few months I can hit low 70s. But what does that mean? Not much really. It does not tell you what size stop I am using or how much profit I am taking. What you really need to know is how many scratch trades am I taking. Am I 70% winners 20% scratch trades and 10% losers? Is the scratch trades winners or losers? Or is my actual number 50% winners 20% scratch and 30% losers? There is a huge difference in the 2 examples.

 

When I win I take 4-8 ticks and when I lose I only allow 2-3 ticks at the most. This is huge compared to if you use a 10 point stop and are looking to take 10 ticks. Chances are the 10 point stop guy isn't taking scratch trades. It is the opposite way prop traders trade. It is impossible to build size if you are taking 10 point losses. For me I scratch a trade because its annoying me. So either way if its 50% winners or 70% winners I am making money. If you go by just win/loss you don't get the full picture and even at 70% the guy that has a 10 point stop isn't making money. Even this information is incomplete. There are times that I will make a good trade before the market opens and my will to take another trade greatly diminishes. Are there other trades that work after I leave? Yea sure there is. Some guys would count that as a winning trade with profit unrealized.

 

SIZE!!!! You hit the nail on the head. That is the answer. Good traders build size. Forget all that total net tick crap. This is again another fallacy. By not building size you are putting yourself at a huge disadvantage. Is it easier to make 500 bucks with 10 contracts or with 1? If you have to make 500 bucks on each trade you could do that really easy with 10 contracts and not so much with just 1. When I was early in my trading carer all I wanted to do was trade the 6E and be on those sexy 100+ tick winners. That is what makes sense because the thing moves. Everything about this 6E thinking is foolish.

 

The cartman guy suggested maybe moving to a different market. I disagree fully with what he said. What he should of said is... If you trade a different instrument then maybe your bad habits that are preventing you from being successful will be easier to get away with on a different instrument. The main reason is that the things that make markets move are the same on the ES as they are anywhere else. If I trade the 10 year I use 2 ticks (sometimes 3), the 6E (very rare I trade it anymore) 2-3 ticks, 30 year 2 ticks, and the CL 2-3 ticks.

 

Another thing you mentioned was that you only look at the ES intraday. This is a huge disadvantage. I cant imagine anyone in the prop world not using correlated markets. If you have been trading for 10 years on the ES and you are not using any other markets I really want to know why. To me that like saying I drive a car but I can only cope with the break or the gas so I only use the gas. You need both to get to where ever you are going safely. Have you tried using the note and the 30 to help with trades? I don't want to sound like I am talking down to you because its totally possible that you have never been introduced to the concept and hopefully it doesn't come across that way. Correlating the 10 year with the ES is really the biggest advantage you have when trading the ES. Also when you build your size you can quit the ES and trade the 10 year and use the correlation the other way. My guess is that you are not doing that because no one has shown you how. If you are trading the ES and you don't have a 10 year note next to it you are really missing something.

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................................................................ My guess is that you are not doing that because no one has shown you how. If you are trading the ES and you don't have a 10 year note next to it you are really missing something.

 

Hi Colonel B,

 

I find your words very interesting and yes I would appreciate you showing me how to incorporate the 10 year note into my ES intraday trading.

 

many thanks

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The main reason is that the things that make markets move are the same on the ES as they are anywhere else...

 

At first glance someone may in error think you're saying that the same trade strategy that's profitable on Emini ES futures will also be "just as" profitable for example on the Hang Seng HSI futures.

 

My point is that the there are some markets correlated and other markets not correlated. The correlated markets can use the same trade signal strategy and same trading habits (e.g. trading Emini ES or Eurex DJstoxx50 between 0830am - 1100am est). In contrast, markets not correlated can use the same trade signal strategy but not the same trading habits.Thus, the trade results in Emini ES versus Hang Seng HSI futures will be greatly different while using the same trade signal method.

 

That's why its important for traders to test their trade methods on different markets, correlated and none correlated, to determine which market produces the best results via that trade signal method. Next, factor in the personal reasons to determine which market is suitable for trading. For example, trade signal A produces on average $500 per day while trading Emini ES between 0830am - 1030am est while the same trade signal A produces $1200 per day while trading Hang Seng HSI futures between 1130pm - 0100am est. Therefore, the only reason why that trader will continue trading Emini ES must be due to "personal reasons" (e.g. night time security guard at the hospital that prevents him/her from trading the HSI futures).

 

Therefore, I will assume you're talking about when you say "things that make markets move are the same in other markets" that the analysis (e.g. supply/demand, market context) is similar from one market to the next market. That's very true.

 

By the way, strongly agree that position size management is one of the keys to successful trading. Good traders know when to increase their position size and they know when to decrease their position size.

Edited by wrbtrader

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find a strategy that loses 90% and simply do the opposite!

 

The circumstances associated with finding a strategy that loses 90% and finding a strategy that wins 90% are logically identical.

 

Remember also, it's just as easy to curve-fit a strategy for poor performance as it is to curve fit a strategy for best performance. The un-robustness of an over-fitted bad strategy and the robustness of an over-fitted good strategy are also logically identical.

 

And finally, just 'flipping' the entries and exits idn't that straightforward, due to costs.

 

Rather than find a strategy that loses 90% and then reverse, a more practical approach may be to find a general market tendency description that is untrue.

 

BlueHorseshoe

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Correlating the 10 year with the ES is really the biggest advantage you have when trading the ES.

 

Trading markets that are near perfectly correlated in sync is just going to tell you the same thing at the same time twice over.

 

If one market 'leads' the other then there might be an edge to exploit in the lagging market (one side of an stat-arb opportunity, in fact). However, you talk about trading one or the other, so I don't think you're talking about this.

 

Please could you provide some more explanation?

 

The ES is retracing, say, and I want to buy this pullback because I think the trend will resume - what are the 10 year notes going to tell me that will help me to time my entry, or decide whether or not to trade?

 

Cheers,

 

BlueHorseshoe

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I disagree that there is no way to thoroughly test a plan, though I suppose it depends on what one means by "thorough".

 

As to the other, one can be consistently profitable every day. Depends on the plan and the management.

 

Db

 

If you are talking about testing your plan with old data, then sure you can test it. If that gives you confidence that your plan will work, then I suppose it is helpful.

 

There are times when you can be consistently profitable and times when you can't, given an account size. Frequently the best trade is no trade. No trade means no loss or profit. Other times you may still be able to profit, but the profits are very small. Other times your account is just to small to trade, given the market conditions. Etc, etc.

 

A plan and the testing of a plan will not assist us in dealing with the stream of unknown data that the market throws at us every day. Your draw-down could end up being significantly larger and longer than anything you expect or completely outside the realm of expectations. Do you change your plan or do you ride it out? A fool changes or "tweeks" his plan if he is not prepared mentally to trade his plan.

 

I am not selling anything or speaking of ideals of what we ought to do. I speak from practical experience.

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