General Trading Chat
- Thread starter timepass
- Start date
- Tags idle thoughts trading talk only
Hi Madan and ST Sir,
I need some help on maths here. Happy to see a maths lover like you here:
Now consider a NIFTY futures swing system which has average win of 75 points and avg loss of 35 pts. This is average but the general stop loss is about 75 points. Monthly system makes about 160 points and yearly about 2000 points. This is plain gain without any concept of changing position size based on SL. Win % is about 40% as its trend following system. Worst case system drawdown over contentious loosing trades were about 900 pts. Happened once in last 5 years or so.
1. Now I am trying to trade this with 1.5L per Nifty lot (of 75). After 3 months, I will get about 500 points , so when should I consider LOT ADDITION? Please tell me using both types that is FIXED RATION & FIXED FRACTAL?
2. Since the Initial Stop Loss is very large (75 pts) there is no use of concept of R multiple or fixed fractal, what do you say?
3. If I decide to add 1 lot after say 1000 points, then how to scale down when you start hitting loosing streak?
4. Since the largest loss is 900 pts, should I consider 900*75=67500/- gain in the account as to add next lot and then how it proceeds? Fixed ratio is great method to initially build one's trading capital. Can you provide some NICE MATERIAL where I can consider various cases like first loosing streak and then wins, and many such combinations.
I need some help on maths here. Happy to see a maths lover like you here:
Now consider a NIFTY futures swing system which has average win of 75 points and avg loss of 35 pts. This is average but the general stop loss is about 75 points. Monthly system makes about 160 points and yearly about 2000 points. This is plain gain without any concept of changing position size based on SL. Win % is about 40% as its trend following system. Worst case system drawdown over contentious loosing trades were about 900 pts. Happened once in last 5 years or so.
1. Now I am trying to trade this with 1.5L per Nifty lot (of 75). After 3 months, I will get about 500 points , so when should I consider LOT ADDITION? Please tell me using both types that is FIXED RATION & FIXED FRACTAL?
2. Since the Initial Stop Loss is very large (75 pts) there is no use of concept of R multiple or fixed fractal, what do you say?
3. If I decide to add 1 lot after say 1000 points, then how to scale down when you start hitting loosing streak?
4. Since the largest loss is 900 pts, should I consider 900*75=67500/- gain in the account as to add next lot and then how it proceeds? Fixed ratio is great method to initially build one's trading capital. Can you provide some NICE MATERIAL where I can consider various cases like first loosing streak and then wins, and many such combinations.
Wisp,
No experience in day-trading as such. I have done 5 months of daytrading last year to see what it is...then, it was taking a toll on me and fortunately, there was no need to do daytrading for me..Just fortunate that way !!
1. I can talk about losing streaks on swing trading. I easily get 8-10 losing streaks in a row (as my system is 38-40 pct winning system) 2-3 times in a year atleast..5-6 winning trades as well
2. I dont know about continuous losing days (as i dont daytrade) but time DD is very demoralizing.I have had 4-5 months of DD multiple times in the last 10 years before i see the peak. Knowing system's probability of winning and the average time the system dips into DD will help here. Am not referring to account drawdown..we are talking about time DD.
So, if one has a system which makes money every month - great. Keep doing what you are doing. But not everyone is fortunate or savvy enough to have that kind of system. If you are part of the latter crowd, just prepare yourself for your system's expected time DD(add 50% more time to it) so that your trading routine should not get disturbed.
All these things matter only when your trading account size is small (btw, account size is a subjective topic..needs differ for everyone). Once you get to a bigger size, these things will not matter as you would have set aside enough(or passive income) that can compensate for a couple of year of time DD as well. So, battle-cry is to cross that 1-1.5 cr as account size. On a side note, the higher the timeframe one trades, the less number of trades and more chances of a bigger time DD. Please be cognizant of that fact !!
Am pasting a link that talks about winning percentage anf losing streak chances over 10000 trades...This is statistics( based on random sequencing and Monte carlo simulation..i have 100% faith in math) and we are not above it. We will experience this over the long run.
http://prntscr.com/azaic3
Hope it helps !!
No experience in day-trading as such. I have done 5 months of daytrading last year to see what it is...then, it was taking a toll on me and fortunately, there was no need to do daytrading for me..Just fortunate that way !!
1. I can talk about losing streaks on swing trading. I easily get 8-10 losing streaks in a row (as my system is 38-40 pct winning system) 2-3 times in a year atleast..5-6 winning trades as well
2. I dont know about continuous losing days (as i dont daytrade) but time DD is very demoralizing.I have had 4-5 months of DD multiple times in the last 10 years before i see the peak. Knowing system's probability of winning and the average time the system dips into DD will help here. Am not referring to account drawdown..we are talking about time DD.
So, if one has a system which makes money every month - great. Keep doing what you are doing. But not everyone is fortunate or savvy enough to have that kind of system. If you are part of the latter crowd, just prepare yourself for your system's expected time DD(add 50% more time to it) so that your trading routine should not get disturbed.
All these things matter only when your trading account size is small (btw, account size is a subjective topic..needs differ for everyone). Once you get to a bigger size, these things will not matter as you would have set aside enough(or passive income) that can compensate for a couple of year of time DD as well. So, battle-cry is to cross that 1-1.5 cr as account size. On a side note, the higher the timeframe one trades, the less number of trades and more chances of a bigger time DD. Please be cognizant of that fact !!
Am pasting a link that talks about winning percentage anf losing streak chances over 10000 trades...This is statistics( based on random sequencing and Monte carlo simulation..i have 100% faith in math) and we are not above it. We will experience this over the long run.
http://prntscr.com/azaic3
Hope it helps !!
Sir i look at the nse options chain for nifty on the nse website itself. Every 15min-1 hour i refresh the page and check for changes in the following.
1) for example let us take nifty spot being at 7700 today. So when i want to trade nifty i check the iv for 7700 pe and 7700 ce at that moment. Supposing the iv for the put is higher and for the call it is lower than that of the put then i realize that the interest in put buying is higher. So provided my main indicator ( nifty breaks the previous day low ) tells me the market is weak. So then i look at the 3min and 15min tf charts and pick the best opportunity to short the market.
2) As a confirmation i look at strike prices above also. For example now with nifty spot at 7706 if i look at 7800 ce i see huge addition of oi on declining prices. So this is confirmed bearish for me.
Overall i look at
1) iv
2) addition of oi higher and lowering price depending on the market direction
3) both the above at higher and lower strike prices.
When all the 3 above match with my main indicator ( previous day low high ) i execute a trade and then patiently wait for my target or sl. As soon as i get 30 points on nifty i bring the sl to cost and then my next target is 100+ points away.
1) for example let us take nifty spot being at 7700 today. So when i want to trade nifty i check the iv for 7700 pe and 7700 ce at that moment. Supposing the iv for the put is higher and for the call it is lower than that of the put then i realize that the interest in put buying is higher. So provided my main indicator ( nifty breaks the previous day low ) tells me the market is weak. So then i look at the 3min and 15min tf charts and pick the best opportunity to short the market.
2) As a confirmation i look at strike prices above also. For example now with nifty spot at 7706 if i look at 7800 ce i see huge addition of oi on declining prices. So this is confirmed bearish for me.
Overall i look at
1) iv
2) addition of oi higher and lowering price depending on the market direction
3) both the above at higher and lower strike prices.
When all the 3 above match with my main indicator ( previous day low high ) i execute a trade and then patiently wait for my target or sl. As soon as i get 30 points on nifty i bring the sl to cost and then my next target is 100+ points away.
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