1:1 Risk:reward gives me a 90% win rate but...

Discussion in 'Trading' started by metatrader54, Jul 4, 2019.

  1. ironchef

    ironchef

    OP's statistics is insufficient to establish efficacy. A few hundred data points in a few months or a couple of years are not enough to establish if his method really works long term.
     
    #41     Jul 5, 2019
  2. ironchef

    ironchef

    Great advice sir. I did exactly that. Went back to school to study economics 101, Introduction to Finance, read up on McMillan and Hull, studied VBA to at least understand what the professionals are talking about and do some modeling on my own.

    I hope @metatrader54 takes your comments to heart (unless he/she is already a finance professional) and starts reading up on the fundamentals of finance, forex...

    Playing blackjack is gambling unless you understand the probability.

    Regards,
     
    #42     Jul 5, 2019
    OSN_invest and Magic like this.
  3. ironchef

    ironchef

    So true if you trade options!!! I didn't know the other systems/instruments also followed such statistics?
     
    #43     Jul 5, 2019
  4. Please read post again, I repeated said this is extremely basic idea and lacked A LOT of details.
     
    #44     Jul 6, 2019
  5. So how long would work? I've backtested it over 10 years of data across multiple currency pairs?
     
    #45     Jul 6, 2019
  6. Hull?
    Options, Futures and Other Derivatives (6th Edition)?

    Do people still even use CAPM? Why is it so popular? I did read up on it before but concluded that it's just a system curve fitted on history and doesn't really work anymore.
     
    #46     Jul 6, 2019
  7. It's not that good, you lose 2 trade and 2R is gone, every 10 trades you are only left with 6-7R, minus comissions thats even less.
     
    #47     Jul 6, 2019
  8. I've got a degree in finance. To be honest, I often think that traders on forums and professional traders/finance guys are completely different things, even to the point that retail/forum traders aren't even "finance" people, there's a ton of things in the corporate world that they don't know, technical analysis is a joke (I am using), do they understand what happens in an IB when a M&A deal comes through? I just feel that it's just 2 different worlds but non-finance people think they are the same group of people.
     
    #48     Jul 6, 2019
  9. 6-7R profit every 10 trades isnt enough? I still don't get it.

    I worked for a hybrid hedgefund/p.e. previously and I have to agree, I don't think anyone really cares about CAPM and these academic stuff. Maybe some mutual funds might care. Same goes for TA. That being said, their returns aren't phenomenal either.
     
    #49     Jul 6, 2019
  10. Nope, with say a 1:3 ratio, you’d get around 18 R per 10 trades for a 70% win rate. 60% and you get 14R etc.. so 6-7R really isn’t much IMO.
     
    #50     Jul 6, 2019