MoneyTec Traders Community Forum - View Single Post - What kind of trading is most profitable for ordinary people?

TraderABC · 23-07-2005, 20:01

More thoughts to add:

Market is not fully predictable and chances of things going wrong increase with time increased.

Longer term trades require larger stop lossess while profit accumulated over time is smaller.

Lets say that we have a system whose win loss is - N (60/40, N=1.5) but using it on different time intervals Intraday and long term. Then on an assumption that we are risking no more than X%, with Deposit $D with profit Y%, each trade will bring either D*X loss or D*Y profit. Average profit per deal will be D*(N*Y-X)/(N+1) .

Sum gain as you see is dependant on number of deal made. Conclussion, the more trades while following the system you make per time period , the more profit you get with SAME risk.

To put it in other words. If you are doing a swing strategy with 500 pip goal using a 100 SL, you will do much better if you go down the chart timeframes put a 20*(5 lots) Stop loss and 100*5(lots) gain. Same risk much more profit per month or so. And remember you can still use trendlines from bigger time frames.... This begs the question

Which time frame is best in this case considering the spread? Anyone knows the golden ratio?

23-07-2005, 20:01	#32
TraderABC level 3 Join Date: Jun 2005 Posts: 342 Downloads: 0 Uploads: 0 Rep Power: 4	Re: What kind of trading is most profitable for ordinary people? More thoughts to add: Market is not fully predictable and chances of things going wrong increase with time increased. Longer term trades require larger stop lossess while profit accumulated over time is smaller. Lets say that we have a system whose win loss is - N (60/40, N=1.5) but using it on different time intervals Intraday and long term. Then on an assumption that we are risking no more than X%, with Deposit $D with profit Y%, each trade will bring either DX loss or DY profit. Average profit per deal will be D(NY-X)/(N+1) . Sum gain as you see is dependant on number of deal made. Conclussion, the more trades while following the system you make per time period , the more profit you get with SAME risk. To put it in other words. If you are doing a swing strategy with 500 pip goal using a 100 SL, you will do much better if you go down the chart timeframes put a 20(5 lots) Stop loss and 1005(lots) gain. Same risk much more profit per month or so. And remember you can still use trendlines from bigger time frames.... This begs the question Which time frame is best in this case considering the spread? Anyone knows the golden ratio? Last edited by TraderABC : 23-07-2005 at 20:14.