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Maybe I didn't make myself clear, I call betting management capital management.
If you look at it from an open-close-open position, there is no difference between the two, it's true, but the probability is always 50%, minus the spread leads eventually to negative statistics, but then why so much trouble with determining entry, it's much easier to open at random, the result is the same 50%.
Why do many people lose, because they want a lot at once, they calculate the direction correctly, but calculate the bets incorrectly, as a result the movement goes where it is supposed to, but without them, here is one example of the difference between direction selection and betting management.
I must be dumbed down with my programming here.
I don't get it. What difference do you see... It's got nothing to do with a lot at once...
If you have a technology that gives more than 50% good yield (at least by the value not less than the spread), then you must open and close in accordance with this technology.
If not, then with random opening according to statistics the result will be minus the spread. In case of big bets it will simply happen faster.
As for the size of bets - there are quite meaningful MM rules.
I`ve been working with stochastic (9,5,3,9) since the begining of the year there are 200-400 pips profit and max 5 lots (150 pips).
If I play with 1 lot as the fixed one, then 20-40% is ok!
I look at the history of stochastics (9,5,3) since the beginning of the year there every month from 200-400
points of profit, lots a maximum of 5 in a row (150 points), if I have a depo of 10000, and play
a fixed 1 lot, then 20-40%, it seems normal!
No, not the current ligament, not the emerging ligament, but the one that appears after the ligament that formed the signal, on the new ligament!!!!
Maybe I didn't make myself clear, I call betting management capital management.
If you look at it from an open-close-open position, there is no difference between the two, it's true, but the probability is always 50%, minus the spread leads eventually to negative statistics, but then why so much trouble with determining entry, it is much easier to open at random, the result is the same 50%.
Why do many people lose, because they want a lot at once, they calculate the direction correctly, but calculate the bets incorrectly, as a result the movement goes where it is supposed to, but without them, here is one example of the difference between direction selection and betting management.
I must be completely dumbed down with my programming here. .
I don't get it. What difference do you see... It's got nothing to do with a lot at once...
If you have a technology that gives more than 50% good yield (at least by the value not less than the spread), then you must open and close in accordance with this technology.
If not, then with random opening according to statistics the result will be minus the spread. In case of big bets it will simply happen faster.
As for the size of bets - there are quite meaningful MM rules.
Ryan Jones
The Power of Right Money Management (Excerpts from an article) One trader lost $3,000 in one year trading one contract system. Another trader made $25,000 profit trading the same system during the same year. One trader makes $24,000 in a year, while another trader makes $79,000 in a year on the same system. What is the difference between these traders? Money management is the mathematical process of increasing and decreasing the number of contracts/shares/options traded. The purpose of money management is to increase income during profitable trading periods and protect that income during drawdowns (DrawDown) of any trading system or method. Money management allowed Larry Williams to turn $10,000 into $1.1 MIO in one year of trading. If Larry had traded only one contract per trade, his income would have been only about $100,000. There were two main aspects to Larry's trading: 1) The trading strategy that determined where to enter and where to exit the trade; and 2) The method of increasing and decreasing the number of contracts traded in each particular trade. Thus, only 9% of the total profit was achieved by the methods of determining entry and exit, whereas, 91% of the profit was achieved by using money management methods applied to this trading system. Money management alone increased Williams' return to 1,000%! 90%-95% OF ALL TRADERS LOSE MONEY. This is a known statistic from many reliable sources, including my personal experience. And here is another interesting statistic. 90%-95% of traders spend hundreds of thousands of hours and thousands of dollars trying to figure out where it is best to enter the market and where to exit. Whereas, they hardly think about what risk to be exposed in each deal, what methods to decrease or increase this risk. I think these statistics are so similar for a reason. I began this article by comparing two traders trading the same system. The first trader lost $3,000 over a year while the second trader made $25,000 using the same signals as the first trader. The only difference in the results of these traders is that the second trader used appropriate money management techniques, while the first trader did not. NOT JUST MONEY MANAGEMENT, BUT GOOD MONEY MANAGEMENT. Before learning money management it is important to understand that not just any money management should be applied in trading, but the appropriate, correct money management. Let us use the following illustration: Take a coin and flip it 100 times. The probability of heads or tails will be close to 50/50. If we win $2 for heads and lose $1 for tails, we should win about $50 by the end of 100 flips. This is a situation with a positive mathematical expectation. The difference between winning and losing is significantly in our favor. Let's say we have $100 to bet in this game. The question is what percentage of our money do we have to risk each time we flip a coin? 10%, 25%, 40%, 51%? What does it mean if we have $100 and are going to risk 10% of our capital on each flip? We start by risking $10 on the first flip. If the eagle comes up, we win $20. Our next trade will therefore risk $12 (10% of our new $120 account balance). If tails, we lose $12, if heads we win $24, and so on as the game goes on. Will there be a difference depending on the percentage we used? If so, what is it? Remember, we win twice as much when playing in our favour as we lose when playing tails. Each time the difference between winning and losing is 50%. The answer may surprise you. By risking 10% of your money on 100 rolls ($10 on the first roll) we turn our $100 into $4,700! Money Management increases our return from 50% to 4,700% return. At 25% risk, we are turning $100 into $36,000! Increasing the risk simply by 15% per roll, increases our total return from 4,700% to 36,100%. On the face of it, the more we invest, the better. But, wait. By increasing our risk by another 15%, to 40%, for a total of one flip, we turn our $100 into $4,700. This time, the increased risk resulted in a steep drop in returns. And what happens if we invest 51% of our money? In that case, we will start losing money, even though the positive mathematical expectation is in our favour. Our $100 would drop to $36. A loss of 64%! Conclusion: With wrong money management you can lose money! An important point - money management is a purely mathematical function. Hundreds of years ago it was known that 2 x 2 = 4. Today this equation gives the same answer. In the same way, money management is predictable, unlike trading strategies or systems. In the coin example above, it does not matter whether heads or tails fell first. If heads are tossed the first 50 times and tails are tossed the next 50 times, the result would be the same if heads and tails were tossed in reverse order. You may be sceptical about these conclusions, but I assure you they are true.
Bruce Babcock
Chaos Theory and Market Reality
When a beginner trader starts having problems in trading his first reaction is to think that to succeed in the market he must learn to predict the price movement. With a minimum of effort he will find that fundamental analysis is used for long term predictions and technical analysis for short term ones. If our budding trader examines the price history of the market he works in he will find what appears to be repetitive patterns. Markets move up and down in long cyclical waves over a long period of time. If he looks closely, he can detect certain short-term patterns on the chart, which repeat over and over again. Once he discovers the world of mathematical indicators, he will find that certain combinations of indicators and patterns tend to repeat themselves - often near major peaks and troughs.
By discovering these repetitive patterns of different kinds, he will quickly calculate the insane amounts of profit that are possible if one takes the right action at the right time.
Not surprisingly, our novice enthusiast will come to the conclusion that the market is something that repeats itself time after time in different ways. And if he or she can learn the patterns and cycles, big profits will flow into his or her pocket. Maybe, markets are organized in such a way that they repeat themselves over and over again in some encrypted form. And if our trader can crack this secret cipher, not only huge profits are possible but he or she can avoid losses altogether.
Our trader begins to pursue this goal using the available literature. Perhaps the mail will bring him an offer of special trading systems which derive profit from some patterns known to a narrow circle of qualified specialists. Since such systems are often valued in the thousands of dollars, our trader may assume that they must really be working trading tools. Brochures about these systems often contain stories about legendary traders or, conversely, reclusive traders who discovered the secret of the market and made millions on it. Through various means, the seller obtained these secrets and is now willing to share them only with a few lucky traders - for a certain reward on their part. Such stories reinforce the belief that some traders who are making big money have achieved this success because they have discovered something about the market that only a super-professional can know.
However, despite the vast amount of such prediction methods in books, trading systems and software, in any given year about 75% of traders lose money. If you take a longer observation period, about 95% of traders lose money.
>> If we win $2 each time heads rolls and lose $1 each time tails rolls, we should win...
This is reminiscent of a hospital average temperature of 36.6 degrees.
Somebody's on fire at 40 and somebody's already cooled off:).
If someone's at 40, it just means they're at 40,
and while formal arithmetic gives a good report to the chief medical officer, things in this hospital are far from good.
Don't be fooled.
No need to look into the mouths of chatterers who twist the facts, no need to hang their ears out to be hoodwinked.
The key phrase in the passage is "If we are going to win". But it doesn't say HOW, by HOW PRINCIPLE to distinguish a profitable (not yet held, not even started, but already estimated as promising) trade from a losing one.Author writes this his "If" as if there is no mathematics, but only that part of it, which is convenient to him.
Might as well say that if behind the right corner of the house there is 1000, and behind the left corner there is a robber, who takes 500, then one can walk from one corner to another and "earn" his million.
Gullible traders might run around the corner.
But in real life, there aren't thousands lying around the corner of a real dark alleyway.
And the wallet will be cleaned out in a heartbeat :)
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In real trading the order value should be determined on the basis of statistically accumulated information about the ratio of profitable and loss-making operations while using a certain strategy and it should be such that it will withstand a maximum (theoretically calculated during testing) series of continuous losses.
>> If we win $2 each time heads rolls and lose $1 each time tails rolls, we should win...
This is reminiscent of a hospital average temperature of 36.6 degrees.
Some are burning at 40 and some have already cooled down quite a bit:)
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In real trading the order value should be determined based on statistically accumulated information about the ratio of profitable and loss-making operations when using a particular strategy, and it should be such that it can withstand a maximum (theoretically calculated during testing) series of continuous losses.