ok, let's look at some actual probabilities
suppose you have a 70% chance of winning each trade
that is what your due diligence earns you
and you make 15 trades.. sound ok?
I chose these numbers because I have prob tables
they dont have 12 trials
you would expect between 10 and 11 winners out of 15
to be exact, you would expect 10.5 winners
standard error is 1.775
about 50-50 chance of getting over 10 wins
actually the Prob {>10 wins} = 51.5%
and Prob {<11 wins} = 48.5%
about 3-1 odds in favor of between 9-12 wins
the Prob {9,10,11,12 wins} = 74.2%
about 7-1 odds against for at most 2 losers
the Prob {13,14,15 wins} = 12.7%
so forget about runs of winners
and deal with the inevitable losses
even the fewer losses that come with due diligence
better question is...
after a loss, does my probability of a next winning trade go up or down ???
my experience with myself and most friends is down
Tim, all this talk is crapp
setting up expectations that are unreasonable
first is was "four trades to a million"
now it is "one 20% winner each month"
how often are you in 100% cash, awaiting the next real winner opp?
what percent or your trades are winners anyway?
you wont like the answer
if under 50%, then account mgmt is critical for you
to ensure winnings exceed more prevalent but smaller losses
look at your average win
is it bigger than your average loss?
if not, and if your winning pct is under 50%, you will enjoy a steady downtrend in your account value
I think it is a streaky business for most
/ jim |
