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TOPIC: Trading plan selection

Trading plan selection 1 year 11 months ago #10

  • andy
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Hi Joe, Andy,

I just finished to collect the statistical data for a new trading plan. The plan will be executed on a 20 minutes intraday chart.
I collected a total number of 76 occurrencies of the same event.
For each single event, I collected the maximum number of tick that the market moved in my favor and the maximum number of tick that the market moved against me.

After some playing with the numbers I have the following situation, supposed that we are trading only 1 lot:
1) One combination of stop / target for which I have a win percentage of 75% and a tick win/loss ratio of 3. The tick won are 350.
2) Another combination of stop / target for which I have a higher win percentage of 80% and a higher tick win/loss ratio of 4. But the tick won are 250.

If you were in me, what would you do? According to your experience, which is probably the right choice?

Thank you in advance for your precious help.

Regards
Jean

Answer

Hi Jean,

I think you are trying to optimize on the wrong place. It wont matter if you choose plan 1 or plan 2 because you are going to trade the future and not the past.

The question is: what to you like best, plan 1 or 2?

Will you be able to follow the plan?

Will you be able to execute the plan?

What happens after 4, 8, 12 losses in a row?

I could come up probably with another 100 more questions! :-)

The only way to find out if your plan works (FOR YOU) is actually trading it. If you feel confident with it - go for it and give it a try. Then you will see what you have to optimize!

Good trading,
Andy
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