Which is easier - a steady 500 pips a month or just 20? - page 4
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
It's probably easier=better to make money in general, IMHO...
If you follow this logic, 12500 ( twelve thousand five hundred ) stable pips is even easier than 20 and even more uninteresting because you start to feel guilty about taking candy from a child (from Forex).
12500 is harder and more interesting.
OK, let the risk be 20 pips per trade. The risk here is simply the value of the stop loss, regardless of its probability.
No, since the term "stability" has been touched upon, we are talking about multiple events, so the size of the loss/profit series is important and depends on the % risk per trade.
If we risk twenty pips and it is only 0.5% of the deposit, it is very different from the situation where we risk 40% of the deposit. Why get hung up on "pips" at all?
and that's the size of the de-aposit. Everything should be counted in pips. Profit in pips and drawdown in pips. Otherwise, the 0.5% de-posits you quoted raises a lot of additional questions. What is the currency of the deposit? What if I have a billion?
My first one has a 500 points profit and a 20 points drawdown, and the second one has 0 points drawdown and 20 points profit. I will not hesitate to choose the second one. It is a billion times better.
There are no billionaires here. Besides, abstract points won't tell you anything about the efficiency of the system. Or are you interested in marasmus in the form of an abstract break-even system? I.e. does it 100% get 500 points with a drawdown of 20 or 20 without a drawdown? If so, I am very much surprised by such marasmus.
If that doesn't tell you anything about the effectiveness of the system, then nothing will. Pity.
OK, we are having a substantive conversation. The number of task parameters is starting to grow.
I understand the term "stability" approximately as follows: if you take the last year of trading and average profitability (not in pips, but in % of balance at the beginning of each month, and not arithmetically, but geometrically), it should be at least 102% in 95% of cases. Example:
98%, 106%, 97%, 112%, 102%, 100%, 93%, 107%, 92%, 109%, 111%, 97%. The product of these numbers is 1.237 * 10^24. The 12th degree root is 101.79, i.e. 1.79% per month. Something close to the target.
As we can see, in reality we sometimes had to reach 12% per month, i.e. much higher figures than the claimed 2%.
The question arises: at which numbers do we need to stop, both up and down? We can first consider the simplest MM, geometric, i.e. a constant lot per given capital (say 0.1/$1K). Deal parameters are unchanged, i.e. TP=SL=20 pips.
The only parameter we have to optimise is the number of trades per month. We will consider probabilities of success and failure to be equal, i.e. 0.5.
P.S. Let us try to put ourselves in the shoes of a superprofi whose working conditions are as follows
1. he receives signals from above and can only accept or reject them. The trades are constant by parameters: TP=SL=20 pips. At the given moment no more than 1 deal can be opened.
2) Volume of the transaction increases in proportion to the balance based on 0.1 lot per $1K of balance.
3. Probability of success and failure is not known.
4. It is necessary to develop such system, which unique parameter should be the number of deals per month. Trading objective: geometric average profitability of the order of 102% in at least 95% of cases.