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1 tick in 6E is 12.50. the numbers i highlighted are in ticks not dollars. i chose 15 ticks because that is a 5 minute harmonic rotation on average and what I usually use for my own trading.
Can you help answer these questions from other members on NexusFi?
Larry Connors studied over 200,000 trades from a winning system and compared the results with and without stops. He found the use of stops increased the probability of loss and reduced the expected gain. Of course there are no guarantees that his strategy, or any unbounded trading strategy, will perpetually avoid massive drawdowns. In terms of living the life of a trader, it’s one thing to have a system with “good numbers” it is quite another thing to be a trader and have to deal with reality.
trade management, if done properly....means everything
Yes I am familiar with his work. This is more the case with mean reversion systems and algorithmic trading which is what he talks about most frequently. i have actually found that out myself through my own systematic development. But the drawdowns can be insane and you're RR is horrible, they just have high win rates because you basically hold until you're a winner or have a margin call. Which is basically expressing the same idea above, you get one but pay for it with the other.
In terms of "being a trader" sure you have to live with the stats of your system. But the numbers are the benchmark as to what could possibly happen in the future. Obviously the trader has to live with the actualized performance. I just don't see how that implies that
He still abides by the relationship between win rate and average winner/loser(R:R). He has just taken it to an extreme. Or I guess you could say, selected the % winners to R:R that is most beneficial to him. Although the net result of isolating the specific trade management is net 0. This applies the same way to trend traders, they select high R:R ratios and low win rates. But again isolating the specific trade management is net 0. Its a choice, but not inherently an advantage.
Yes, there is 1 inherent thing i should mention. its in the market >97% (there are bars where its not but it gets in the next minute), so news, holding over night, weekend gaps, etc. It could be caused by 1 of those phenomenon, it only has to occur once to get recorded. Thats why i was just focusing on the expectancy. The random volatility over a large # of trades should become neutralized.