AIMS Stress Free Trading - Community Forum

immy wrote: ↑17 Jun 2022, 09:50 I am in the GU H4 signal. Too many doubts in my head but I can't trust my head... I have to get out of that and take objective decisions. 

 

Minsk wrote: ↑17 Jun 2022, 10:32

immy wrote: ↑17 Jun 2022, 09:50 I am in the GU H4 signal. Too many doubts in my head but I can't trust my head... I have to get out of that and take objective decisions. 



 

This one looks good enough.
H4 is not in my trading plan, otherwise I would have taken it too.
FIngers crossed on many R's
 


 

immy wrote: ↑17 Jun 2022, 08:10

immy wrote: ↑16 Jun 2022, 18:05 GU, UJ and EU have second day play.
I have my charts on H4, I will see if we have 2-3 trend candles on h4 followed by 2-3 sideways pullback candles overnight

Tomorrow at 6am UK we will have a go at it. 


THERE IS NO TIME FRAME LIKE H4.... It is Perfect for Banana


 

Nothing really setup... I had PO on UJ that failed and now I'm long 

 

 

immy wrote: ↑16 Jun 2022, 13:07

eaxh wrote: ↑16 Jun 2022, 10:11 I have alot of trades going past 2 R to then ho back to BE and i gets out be. 
Its very triggering to start to take 2 R targets instead of BE´s but then i never have 2 R targets. I have gone through my batches
And ddoes not make the profitability better. But i will have to say that its hard to resist. 
But i am keeping the 3R targets- 

The bad feelings of missing the move on DAX is present. 
What can i do now? Nothing. Some day i will catch it. 
I am taking my trades over and over and that will hake me a winner. Not today, but in the long run. 

I am posting the printscreens from today. 16.06.2022_09.41.56_REC thursday.png
 16.06.2022_10.46.46_REC NAS review.png
 16.06.2022_10.50.28_RECdax review.png
 trade 7.png
 

trade 8 adn 9.png
 



 
 
 



 

It's harder to stay profitable on 2R targets and 33% win rate...


That's really our win rate if we eliminate the BE trades. BE trades are like trades that did not happen but they did. They happened but did not affect the bottom line.

Remind yourself that for a system with 1:3 risk to reward trades the breakeven win percentage is 25%. Whereas for a system with 1:2 Risk to Reward trades the Breakeven win rate is 33%. 

So, for the argument, if we eliminate the BE trades, we are left with 50% winners and 50% losers. 

However, this does not mean that even if you don't employ the SL to BE move, you will still get the same results. The assumption is that  BE trades won't all go and become -1R, that 50% of the BE will hit 2R and the rest will hit -1R. ) Sometimes, eliminating BE will result in a higher win rate other times a lower win rate. 

We can't just say 1:3 Risk to Reward... because we have a third alternative i.e. BE.So our risk to reward is actually 1:0:3 or 1:0:2.  It's either 1R loss to No loss or 1R loss to 3R Win. And since the probability of BE trades is 33% then we can add this to winning trades which would HALVE the winnings R's. 

So in reality our  average risk-to-reward formula goes like this: 

Let
X = Loss Trades
Y = Profit Trades
Z = Breakeven Trades 


The formula goes 

X = (Y+3R)
where X is one unit of risk and it's equal to the sum or average of break-even and Profit Trades. 

Fill the numbers for 10 Trades
 X = 10
Y = 3.3 (33% BE Trades)
3R=3.3  (33% Winners)

10X = 3.3Z + (3.3 * 3R)
X =  (3.3 + 9.9)/10
X = 1.32 R 

So our Average winner is not 3R it's actually 1.32. So our profit factor will be 1.32

Now do this with 2R 

10x = 3.3Z + (3.3 *2R)
10x = 3.3X + (6.6R)
X = (3.3x+6.6R) / 10
X = 0.99 

Woopsie... you are just about breakeven with 2R winners. 

IF someone can prove these calculations wrong, please do so. 

 
 

 

Minsk wrote: ↑19 Jun 2022, 07:09

 

Immy what would this win rate model look like if at 1R SL goes to BE and you close 50% of the trade? You have 1R in the pocket and the other half runs risk free, maybe further than 3R

 


 

immy wrote: ↑19 Jun 2022, 17:23

Minsk wrote: ↑19 Jun 2022, 07:09

 

Immy what would this win rate model look like if at 1R SL goes to BE and you close 50% of the trade? You have 1R in the pocket and the other half runs risk free, maybe further than 3R

 



 

I know EXACTLY what you mean.

Unfortunately, it does not work. If it did, I'd love to use it. The only benefit you get in this is a smoother equity curve but in most tests, it failed to give us an edge. So, no.

This method is the favourite of online forums, but it does not have an edge. The way to make money is to ADD to your winners not just make your winners smaller. If you're adding to your winners and letting them run as much as possible, there are higher chances of winning over the longer term.

Winners smaller than 3R need a HIGH WIN RATE. The method that works best is either to not close anything or close half at 1R and leave SL at original (-1R) and trail stop loss using a set trailing mechanism e.g. either a moving average or swing levels (box levels).

1:5 targets are the BEST way forward. I would move SL to BE at +3R and trail by a 2R distance. If the Price goes to 4R, I will get at least 2R. IF it goes to 3R I will sometimes lock 1R but mostly SL to BE. However,  Had I not done this, SL moved on the EU, the other day, I'd have hit $20,000 (10R) but I got stopped out. So there is that.

Moving SL too tight is the BANE of traders. They think that they are locking in profits but in reality, they are scared and want to protect their winners. They think they are being logical not knowing that despite the apparent look of being logical they are actually being illogical since the statistics show that this stop loss move has NO edge over the longer term.