Originally Posted by
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GeezI get busy for a day and come back to find THIS!
Heheh.
Anyway, look fellas, everybody's got to keep in mind that forum postings, like emails, can be quite easily misinterpretted or misread. That's why its important to over-explain everything. Talking about outcomes - and this can be aimed at no-one in particular - with no A) showing some sort of chart, spreadsheet, chart, or anything , and B) describing and over-explaining exactly how you reached those outcomes, does not really do much for anyone. Assume first the individuals you're talking to do not understand anything about FX, and we'll all go far.
What we're all doing here is abstract, theoretical, quasi-scientific studies based on mathematical formulae which are assessing erronous historical data through highly imperfect procedures. If we do not take the approach that at the end of our theses someone else ought to be in a position to closely replie our work - or at least know why they can not because of our own failings in approach - subsequently misunderstanding will inevitably follow. Thus the reason I write such posts, like this one.
Beyond that, question yourself first and others later. I have found it to be quite a good working model for life generally. Even mathematics disproves itself (read Godel, Escher, Bach for a quick summation), so as I said in one of the first posts in this thread:
. . .please, let us keep the thread clean, be respectful and fair, and possess an eduional, informed conversation.
Is it OK to quote oneself? Heheh. I'm not trying to lecture anyone here... just need to keep the value as high as I feel it has been.
I made a mistake earlier when I published that repaired fractional dictionary - I did not clarify exactly how I built it, and on what premises. I regret that... it was my own error to post something while knowing I did not have the time to completely clarify what I did there. So learn from my error.
TO CLARIFY THE FIXED FRACTIONAL SPREADSHEET:
My understanding, most likely incorrect, was the'fixed fractional' supposed that you took, say, a 2 percent risk on each trade - two% of your CURRENT account equilibrium. So if you had $10,000, you'd risk $200. If you won and your balance was currently $10,800 (supposing a 1:4 RR here), you'd then risk $216 on your next trade (2 percent of $10,800, not the original $10,000). I have actually read that's not a good idea, but that's exactly what I assumed in that spreadsheet.
Additionally, I assumed a FIXED SL and TP in pips, not dollars. My perception was,'' If I have established that a 28 pip SL works and a 112 pip TP is attainable within my system on currency Xthen I'm not going to mess with those amounts.
Instead, I varied the number of lots I exchanged in order to attain the risk in dollars according to a 28 pip SL... then simply calculate the reward in dollars by multiplying the risked dollars by 4 (again, 1:4 RR).
Therefore, within my understanding, I introduced there a system which has been repaired fractional, as 2 percent of the current balance was risked on every trade, along with fixed ratio, since the R/R remained constant for every single trade (1:4 or 1:3, depending on if you looked at Sheet 1 or two ). Additionally, it maintained adjusted SL and TP in pips. The sole variable employed was altering the number of lots traded as the current equilibrium increased or diminished. And then the entire thing was applied to an absolutely impossible model where you constantly lost three transactions and then won one trade.
One of the most interesting points I have seen since I published that has been stated by Darkstar:
Now I'm no statistician, but the likelihood of hitting a 50% drawdown (8 consecutive trades) is SIGNIFICANTLY greater to a 25% platform then it is on a 75% platform, so the trader is all but forced to reduce his risk-per-trade rate.
... followed shortly later by Capt. Piptastic's'likelihood of visiting X consecutive losing trades chart. Both these statements / presentations are mathematically irrefutable fact... for what that's worth. Heheh.
And allow me to clarify that *I* do not believe that percent Success is immaterial, which would seem a simple issue to misunderstand due to the nature of the first posting. Instead, my first point - and also the point that I continue to believe - is that:
Before you spend time looking for a'tradable system' based on percent Success, understand Money Management into the very best of your skill.
... after you have done that, it's definitely time to study trading systems that produce a high likelihood of success... be that because of mathematical studies on historic data, easiness to really work the system taking into consideration the time you have available, plogical variables regarding how much drawdown you can handle, or whatever else (all of which I believe to be very significant variables and must be researched and known in order to succeed ).
This is a complex game, my friends. Unfortunate that its been sold into the dumb since' easy money'. If we all work hard, study hard, and discuss what we've learned, we could all get there... and the payoff is brilliant.
-miscon777