http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/ Beauty is in the eye of the shareholder Mon, 01 Jun 2009 16:34:38 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/comment-page-1/#comment-7108 uglychart.com » Blog Archive » Another choppy day Fri, 23 Feb 2007 21:13:43 +0000 http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/#comment-7108 [...] Today was another tough day. In the last two days, we’ve been stopped out of 6 of 7 trades. We’re now in negative expectancy territory and our win rate has been knocked down under 50%. I’ve been risking $200 per trade, but I will be changing this to $190 on Monday. Looks like it might be a good start for 34 consecutive losses! At least the program is doing what we want it to, even if it is not profitable yet. Hope everyone else faired better today - have a good weekend. [...] [...] Today was another tough day. In the last two days, we’ve been stopped out of 6 of 7 trades. We’re now in negative expectancy territory and our win rate has been knocked down under 50%. I’ve been risking $200 per trade, but I will be changing this to $190 on Monday. Looks like it might be a good start for 34 consecutive losses! At least the program is doing what we want it to, even if it is not profitable yet. Hope everyone else faired better today – have a good weekend. [...]

]]> http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/comment-page-1/#comment-6801 Pradeep Bonde Tue, 20 Feb 2007 01:31:27 +0000 http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/#comment-6801 You can put a filter saying once there are 10 or 20 consecutive losing trades for a fixed time frame stop trading . It might indicate there is some abnormality in the market or your system is no more working. Or any time there is 30% or 50% loss to stop trading and revisit the fundamental premises behind the trading system. Survival with atleast 50% of original capital intact should be one of the unbreakable principal. You can put a filter saying once there are 10 or 20 consecutive losing trades for a fixed time frame stop trading . It might indicate there is some abnormality in the market or your system is no more working. Or any time there is 30% or 50% loss to stop trading and revisit the fundamental premises behind the trading system. Survival with atleast 50% of original capital intact should be one of the unbreakable principal.

]]> http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/comment-page-1/#comment-6787 The chartist formerly known as Ugly Mon, 19 Feb 2007 22:25:20 +0000 http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/#comment-6787 hi max, we haven't done a lot of backtesting. But in the last couple months, the damn thing has at least a 50% win rate and I don't think it has made 20 1R losses during the whole time. But, with a 50% win rate, the chance of 34 consecutive losses is (1 - 0.50)^34 = 0.00000000582076609%, if my calculations are correct. With a 40% win rate the odds are 0.000002865118%. So the odds are in our favor. hi max, we haven’t done a lot of backtesting. But in the last couple months, the damn thing has at least a 50% win rate and I don’t think it has made 20 1R losses during the whole time. But, with a 50% win rate, the chance of 34 consecutive losses is (1 – 0.50)^34 = 0.00000000582076609%, if my calculations are correct. With a 40% win rate the odds are 0.000002865118%. So the odds are in our favor.

]]> http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/comment-page-1/#comment-6780 max Mon, 19 Feb 2007 19:52:38 +0000 http://www.uglychart.com/2007/02/19/richards-formulas-for-percent-risk-per-trade-and-losing-streak-ruin/#comment-6780 Hey did you calculate the odds of getting those consecutive negative 45 trades? What was the longest negative consecutive string of losses that you got so far? Hey did you calculate the odds of getting those consecutive negative 45 trades? What was the longest negative consecutive string of losses that you got so far?

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