Pair trading and multicurrency arbitrage. The showdown. - page 289
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not necessarily, Joker took and reinterpreted "my system of pairing", on the rebound from the borders, and vice versa, pairs on the breakdown, and was able to make 10000% in 1 month.....
I've seen his percentages, already on the real...
and I'm not the only one.
He lost, one or two times.
whether he doubled or not, I don't remember.
I've seen his percentages, already on the real...
and I'm not the only one.
He lost, one or two times.
whether he doubled or not, I don't remember.
Yeah, but the real question isn't the returns it's the risk behind them.
Over a short period, it's possible to make 1,000% or even 10,000%, especially if you're increasing position size after losses or trading very aggressively.
What interests me more is whether he could keep making money over a full year without blowing up the account.
A lot of traders can post crazy numbers for a month or two, but very few can stay consistent for years.
That's why I don't just look at profits. I look at max drawdown, risk per trade, and how robust the strategy really is.
Yes, but it's not really the yield that's the issue, it's the risk behind it.
It is possible to earn 1,000% or even 10,000% in a short period of time, especially if you increase your position size after losses or trade very aggressively.
I'm more interested in whether he can keep making money for a whole year without emptying the account.
Many traders can show crazy numbers for a month or two, but very few can stay consistent for years.
That's why I don't just look at profits. I look at maximum drawdown, risk per trade and how reliable the strategy is.
Reducing risk is increasing the length of time you can go without losing, that's an undeniable fact.
however
if the risk is high, trading the same many years is much more interesting and attractive.
I don't quite understand why the percentage of high risk in the signals of this forum is a "red rag" ?
if you think about it, you can come up with an indisputable formula that will show the quality of a trader's trading, and all financial indicators of trading will be taken into account as a whole, not as separate ones.
can't be considered separately
Reducing risk means extending the operating time without draining the system; that is an indisputable fact
But that’s not necessarily the case :-) Not even in theoretical theories, let alone in practice
But that’s not necessarily the case :-) Not even in theoretical theories, let alone in practice
The case depends on the specific perspective from which overall risk is being examined.
A professional trader would say, "Don't risk more than 1 or 2% of your account balance on any single trade." This is often enforced by way of a rule of many proprietary trading firms.
Having said that, I once developed a pyramiding strategy (for someone else) having a max DD of 30% and an average annual return of 20%─over the course of a 10-year test. On the one hand, that would be a risky way to earn 20% per year. On the other hand, a retail trader might say that if it's not likely to blow up, then who cares.
уменьшение риска это увеличение длительности работы без слива, это неоспоримый факт
however
It all depends on the specific perspective from which the overall risk is viewed.
A professional trader would say: ‘Don’t risk more than 1–2 per cent of your account balance on a single trade’
For example , if you enter a trade with 2% of your balance, the trade will be in a drawdown a quarter of the time. Well, with 10% entries, it’ll be exactly the same :- ) The points where the account history’s highs and lows are reached won’t shift one bit.
The probabilities of winning or losing, the wait for a signal, the holding time of the trade and all that sort of thing—the pips taken—are also unchanged.
Everything simply scales up or down as far as the trading algorithm, lot size and external conditions allow.
When a significant portion of your capital is tied up in a trade—meaning there’s a risk of hitting a margin call or stop-out—it’s a disaster.
And when the position is too small, part of the safety margin is simply unnecessary and doesn’t work.
In other words, for every specific strategy, there is a maximum trade size (anything larger is impossible, as the margin buffer definitely won’t withstand the drawdown) and an optimal trade size.
An optimiser, statistics and common sense are quite capable of determining this.
As for the 1% rule, it’s being promoted – indeed, practically forced upon people – by DC affiliates; it’s incredibly profitable for them if the margin isn’t used.
Let’s say there’s a chap called Vasya with a thousand in his account, trading the breakout at the London open. It’s an old-school strategy and (especially since Brexit) it’s becoming less and less reliable. To make any profit from a thousand, the ‘percentage of the balance’ required is quite high.
Vasily’s fed up with the stress, so he tops up his account to ten thousand, but continues to trade the same lot sizes.
Has his trading become less risky? After all, the percentage of his balance is now small
No, of course not; he’s just handed over 9k to some ‘good people’ for no reason.
[I]f you enter a trade with 2% of your balance, the trade will be in a drawdown a quarter of the time. Well, with 10% entries, it’ll be exactly the same...
I assumed that everyone was talking about different levels of risk, implemented as competing alternatives to an otherwise exact same strategy.
When a significant portion of your capital is tied up in a trade—meaning there’s a risk of hitting a margin call or stop-out—it’s a disaster.
All else remaining unchanged in the strategy, additional risk inherently gets closer to that disaster point, even if not to a fatal extent. This is what Linda Moore was getting at in Post #2882.
DC affiliates...
Those are the cleanest dirty words for you-know-who. I'm totally going to use those outside of the Forum. Thanks.😂