What percentage do you have to be right in order to make $$$

[enzabella2009]

my 80% gg and my 10% pp and my 5% r/r + my 22% in l/s and my 0.5 in Ds/P making me millions without counting all the S/R % profits

S/R Subroutine
S/R Storage and Retrieval
S/R Sunroof
S/R Send & Receive
S/R Sustained Release
S/R Suspend/Resume
S/R Shipping and Receiving
S/R Safety/Relief
S/R Selling Rate
S/R Stove/Refrigerator (apartment or home rentals)
S/R Screen Role (basketball)
S/R Shipping Request
S/R Steel Reserve (lager)
S/R Se Renta (Spanish: for rent)
S/R Shipping Report
S/R Surveillance Requirement
S/R signing/releasing

nice1 freddy

[Iron]

Let's say my strike rate is 80% (it isn't!) but I need just a 50% strike rate to break even. Assuming level stakes, what are my chances of at least breaking even long-term?

I've tried to get my head around this deceptively simple problem using Peter's probability page (http://www.probabilitytheory.info) and what I remember from GCSE Maths, to no avail!

Can you help?

Jeff

[LeTiss]

My previous point Jeff, is that % S/R is in itself immaterial.

Money management is critical because traders will invariably invest differing amounts of money into trades. Therefore, a successful trade might only bring £2 per tick, but an unsuccessful one might bring a loss of £6 per tick. Also, having an 80% S/R means jack if you have an inability to escape a bad trade quickly enough

[Iron]

I know, but I'm curious how you would go about solving that hypothetical question.

My scenario assumes that I have a 1:1 risk:reward ratio, which means I will break even long term with a 50% strike rate (but will lose money with a less than 50% strike rate).

Jeff

My previous point Jeff, is that % S/R is in itself immaterial.

[aleksandar]

Ferru,

You can find here:
http://www.dartmouth.edu/~chance/teachi ... apter7.pdf
theory regarding sums of independent random variables distribution.
I can give you quick answer using simulation of that process (80% of times you earn 1gbp, 20% of times you loose 1gbp). Attached image shows distribution of your earnings after 1000 trades (Probability that you earn more than N is proportional to surface under f(x>N)). So this edge that you have is huge as you can see (on average you earn 600gbp, and probability that you will have less than 500 almost doesn't exist).

[Iron]

Thanks Aleksandar

I don't suppose you know of a website that generates that kind of graph please?

It would be interesting to play around with a few figures...

Jeff

[aleksandar]

It's not website, I generated it using MATLAB (http://www.mathworks.com/). It is very convenient software for data analysis, I have been using it from student days.

[donfede]

I much prefer to use the much simpler measurement of "net ticks won". It is not important what technique(s) one employs, scalping, trend trading etc and what is important is that there is actually a net tick gain. It matters not whether in gaining a net 150 ticks a day that I may lose 10 or I may lose 250 ticks in the process.

I agree with James1st. The question I meant to ask was exactly that one.

Does anybody have any statistics on this matter? Scalpers and swingers must have net ticks won/1000 trades, like in poker that success of a player is measured by BB (big blinds)/1000 hands

[Euler]

Imagine you toss a coin. If you win £10 on heads and lose £10 on tails you have won or lost nothing. If you raise your strike rate just a little you will be profitable, or you could focus on cutting your loss which would achieve the same thing.

If you get a strike rate of 67% then you can lose twice as much as you win and still be profitable. All three scenarios are perfectly possible on the exchanges.