by eric-pal » Sun Apr 02, 2023 3:12 pm
Team,
This was asked on another forum, so I thought I would post my reply here too:
Alright. . . This wasn't asked for, but it was indirectly asked for so here ya go. Please thank your local data scientist!
How long does it take and win rate? . . . The correct answer is infinitely more than you want - - - but what does what you want have to do with how the market, which is seriously influenced by big players, which moves independent of your wishes, desires, and dreams have to do with your capability? Short answer - - straight from Dave Ramsey: Your Mama Isn't Going To Save You!!!!!!!
If you want to understand something, you have to measure it. But measuring is a science and people prefer fuzzy thoughts and feelings because, well, you know, if it is "sort of this" or "sort of that", then they can be sort of right and feel some warm fuzzy feelings result . . . yeah, hurrah, clink of champaign glasses - we're on our way. . .
That is Question number 1:
The benefits of scalping is high probability. . . . But that period doesn't last forever does it?!!!! So, can you recognize that AND EXECUTE?!!! That is the base that determines your ability to read not just any probability, high probability. That is a skill! So with respect to baseball, you get to stand in that batters box as long as you damn well want and you get to let the pitcher try entice you, you don't give a damn because you will wait until you see what is necessary. . . . Oh, but you need a specific plan for that, and that plan will take time and research. You ability to succeed here is dependent on your ability to read the market's context, evaluate the volatility and whether it is volatility with edge, adjust money management sizing if necessary and simply execute. If you use a volatility normalizing system, and a 1:2 reward/risk then 75%. However, if research shows that the market tends to offer 1:1 after most reasonable entries, that % seriously reduces doesn't it? BUT YOU NEED TO MEASURE!!! When you have measured enough situations and seen enough cycles, when the market "SHIFTS", because real life isn't static. . . you can "dance with it"!
Question number 2:
What is your runner strategy? Don't have one, then you can't evaluate!
Question number 3:
How often are trends occurring in the PA? If you want to know what is coming up, you have to understand what has happened. The summer months that kill everyone, especially August. . . . chop, chop, chop, chop. Well if there are not trends, your runners are "gonna suck" and that is wasted money.
Question 4:
How strong is your ability to recognize the beginning of trends, when the probability of them is 65-72%?
If 80%+ of the time a market is not trending, then having high reliance on lower probability aspects just doesn't make sense.
Wrapping Up:
So, if your are serious about this, you need to setup testing and measurements around:
1. Scalp portion - to measure efficiency, effectiveness, and ability to read context, especially high probability context. This is why scalping is more difficult. Requires greater insight, patience, and skill set.
2. Runner portion (swing trading). How often are trends happening and how far are the moves? Are they starting after a reasonable beginning area meaning you can't take them, or are you not able to perceive when the market moves from 50%-68% well. You'll notice that is it more difficult to define 65% from 50% but you know when the market is zipping up (very strong trend). So for swing trading, you need to be much more comfortable with being wrong a lot more, but capturing much more of those moves to offset.
They are different measurements, and reading different situations so please separate and measure. In either sense, you are not going to be comfortable for some time. However, if you are good at reading the beginning of trends or specific markets, you might swing it all and 5 contracts for 4+ points as 1 trade. Well, that is a horse of a different color. Measure and determine where your capabilities exist.
Of course, setting things up as a 4 (scalp)+1 (swing) allows you to have your cake and eat it too! That balance is dependent on your statistics.
Hopefully helpful & good trades to you!
Team,
This was asked on another forum, so I thought I would post my reply here too:
Alright. . . This wasn't asked for, but it was indirectly asked for so here ya go. Please thank your local data scientist!
How long does it take and win rate? . . . The correct answer is infinitely more than you want - - - but what does what you want have to do with how the market, which is seriously influenced by big players, which moves independent of your wishes, desires, and dreams have to do with your capability? Short answer - - straight from Dave Ramsey: [b] Your Mama Isn't Going To Save You!!!!!!!
[/b]
If you want to understand something, you have to measure it. But measuring is a science and people prefer fuzzy thoughts and feelings because, well, you know, if it is "sort of this" or "sort of that", then they can be sort of right and feel some warm fuzzy feelings result . . . yeah, hurrah, clink of champaign glasses - we're on our way. . .
That is Question number 1:
The benefits of scalping is high probability. . . . But that period doesn't last forever does it?!!!! So, can you recognize that AND EXECUTE?!!! That is the base that determines your ability to read not just any probability, high probability. That is a skill! So with respect to baseball, you get to stand in that batters box as long as you damn well want and you get to let the pitcher try entice you, you don't give a damn because you will wait until you see what is necessary. . . . Oh, but you need a specific plan for that, and that plan will take time and research. You ability to succeed here is dependent on your ability to read the market's context, evaluate the volatility and whether it is volatility with edge, adjust money management sizing if necessary and simply execute. If you use a volatility normalizing system, and a 1:2 reward/risk then 75%. However, if research shows that the market tends to offer 1:1 after most reasonable entries, that % seriously reduces doesn't it? BUT YOU NEED TO MEASURE!!! When you have measured enough situations and seen enough cycles, when the market "SHIFTS", because real life isn't static. . . you can "dance with it"!
Question number 2:
What is your runner strategy? Don't have one, then you can't evaluate!
Question number 3:
How often are trends occurring in the PA? If you want to know what is coming up, you have to understand what has happened. The summer months that kill everyone, especially August. . . . chop, chop, chop, chop. Well if there are not trends, your runners are "gonna suck" and that is wasted money.
Question 4:
How strong is your ability to recognize the beginning of trends, when the probability of them is 65-72%?
If 80%+ of the time a market is not trending, then having high reliance on lower probability aspects just doesn't make sense.
Wrapping Up:
So, if your are serious about this, you need to setup testing and measurements around:
1. Scalp portion - to measure efficiency, effectiveness, and ability to read context, especially high probability context. This is why scalping is more difficult. Requires greater insight, patience, and skill set.
2. Runner portion (swing trading). How often are trends happening and how far are the moves? Are they starting after a reasonable beginning area meaning you can't take them, or are you not able to perceive when the market moves from 50%-68% well. You'll notice that is it more difficult to define 65% from 50% but you know when the market is zipping up (very strong trend). So for swing trading, you need to be much more comfortable with being wrong a lot more, but capturing much more of those moves to offset.
They are different measurements, and reading different situations so please separate and measure. In either sense, you are not going to be comfortable for some time. However, if you are good at reading the beginning of trends or specific markets, you might swing it all and 5 contracts for 4+ points as 1 trade. Well, that is a horse of a different color. Measure and determine where your capabilities exist.
Of course, setting things up as a 4 (scalp)+1 (swing) allows you to have your cake and eat it too! That balance is dependent on your statistics.
Hopefully helpful & good trades to you!
