Comments on: How To Be Consistently Profitable in the Markets http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/ Futures Trading, Custom Programming, and Commentary Fri, 05 Mar 2010 06:12:03 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: January, Month in Review -- Move the Markets http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/comment-page-1/#comment-2773 January, Month in Review -- Move the Markets Thu, 03 May 2007 23:39:11 +0000 http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/#comment-2773 [...] continue to focus on finding more trades to take per month, to both make more money and ensure that I’m consistently profitable. Obviously, I’m having fun trying out the Box Play, which so far has a 100% win rate for me. [...] [...] continue to focus on finding more trades to take per month, to both make more money and ensure that I’m consistently profitable. Obviously, I’m having fun trying out the Box Play, which so far has a 100% win rate for me. [...]

]]> By: Richard http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/comment-page-1/#comment-1909 Richard Tue, 30 Jan 2007 01:34:44 +0000 http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/#comment-1909 @Brian: I'm glad you liked it. I'm going to do a lot more articles like this, as I find the time. @Brian: I’m glad you liked it. I’m going to do a lot more articles like this, as I find the time.

]]> By: Brian http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/comment-page-1/#comment-1908 Brian Mon, 29 Jan 2007 18:01:01 +0000 http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/#comment-1908 Richard, Great article! You put a lot of research and information into this. Thanks. This gives me some food for thought. Generally, when my goal is current income, I want a very consistent system. I will sacrifice a large R-value for a consistently rising curve. However, when I am looking for long-term capital appreciation, I want the highest R-value I can get. Combining two seperate systems, one of each, gives me diversity and the best of both worlds. Richard,

Great article! You put a lot of research and information into this. Thanks. This gives me some food for thought.

Generally, when my goal is current income, I want a very consistent system. I will sacrifice a large R-value for a consistently rising curve. However, when I am looking for long-term capital appreciation, I want the highest R-value I can get. Combining two seperate systems, one of each, gives me diversity and the best of both worlds.

]]> By: Richard http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/comment-page-1/#comment-1907 Richard Mon, 29 Jan 2007 15:14:14 +0000 http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/#comment-1907 Thanks for the great comment. I don't know if continuously adjusting the risk amount is noise or not, but I do agree that it's a good idea to only adjust your risk amount on boundaries where you'd statistically be profitable. The main reason to wait, is because you have to win more than 1% to make up for a 1% loss. But, as long as you keep your R static, you can offset a 1R loss with a 1R win (ignoring commissions). Thanks for the great comment. I don’t know if continuously adjusting the risk amount is noise or not, but I do agree that it’s a good idea to only adjust your risk amount on boundaries where you’d statistically be profitable. The main reason to wait, is because you have to win more than 1% to make up for a 1% loss. But, as long as you keep your R static, you can offset a 1R loss with a 1R win (ignoring commissions).

]]> By: MikeB http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/comment-page-1/#comment-1906 MikeB Mon, 29 Jan 2007 15:02:14 +0000 http://www.movethemarkets.com/blog/2007/01/28/how-to-be-consistently-profitable-in-the-markets/#comment-1906 Good article, Richard. One topic that I rarely see get much discussion is when to increase/decrease the amount risked per trade, which I believe ties into the topic on which you've written. If I'm risking 0.5% of my account per trade, how often should I adjust the dollars risked per trade based on changes in my account size ? I believe that the adjustment period (how often you re-calculate the '0.5%') should be tied to the number of trades required for a 'high' level of confidence in the representativeness of the trades. That is, if I have a 95% confidence that I can be profitable over 30 trades, the amount risked per trade should only be adjusted (up or down) after 30 trades. For instance, I start with $100k and risk 0.5% or $500 per trade. If after 30 trades, I have $110k then after those trades I would re-calculate my 0.5% risk to be $550 (0.5% of $110k). Changing the amount risked more frequently is basically adjusting based on noise. Good article, Richard.

One topic that I rarely see get much discussion is when to increase/decrease the amount risked per trade, which I believe ties into the topic on which you’ve written.

If I’m risking 0.5% of my account per trade, how often should I adjust the dollars risked per trade based on changes in my account size ?

I believe that the adjustment period (how often you re-calculate the ‘0.5%’) should be tied to the number of trades required for a ‘high’ level of confidence in the representativeness of the trades. That is, if I have a 95% confidence that I can be profitable over 30 trades, the amount risked per trade should only be adjusted (up or down) after 30 trades.

For instance, I start with $100k and risk 0.5% or $500 per trade. If after 30 trades, I have $110k then after those trades I would re-calculate my 0.5% risk to be $550 (0.5% of $110k). Changing the amount risked more frequently is basically adjusting based on noise.

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