Keep Calm and Don't Move Your Stops.....

A little risk management saves a lot of fan cleaning!

The Purpose of Life is Joy!!

Friday, January 27, 2017

+1RR....+2.1RR for the week

One of those days where you wake up late, don't follow procedure, wing it and count yourself luck you got out without a loser.

I normally take a look at the daily and one higher time frame like the 30M chart every day just to make sure there is room in the higher time frames to get a profit target off on the 5M chart and to make sure I'm not trading into obvious levels.

I didn't do that today and while the trade mostly worked, I might not have taken the trade...or I might have.....just not sure about that in all honesty. Regardless, the sell off happened so quick and with some strong authority that I knew I missed something so I looked at the 30M chart and sure enough, obvious levels right there for all the world to see.

I'm not posting charts as much lately but these needed to be shown for posterity.

My target was missed by two ticks and once price has moved within a 2-3 ticks of my target I always move to the midway point between target and entry....I made a promise to myself I would always get paid on a winning trade no matter what. No BE+1's mind you, those have been the bane of my trading but if the trade is almost finished, then no point in settling for a loser or a BE trade. Take something for the hard work. That's what happened today.

On another note. All winning days this week. I ended with +2.1RR.

Time to hit the books...well some coffee first then the books.

(EDIT) I think I need to revise my reporting. I just added up the RR's for the week and reported that as the total RR but I think that is wrong. My best win was a 3RR but if I add up the total risk vs the total reward, then its more like 2.5RR cumulative which keeps the total amount I risked over the course of the week in line with the total amount gained over the week.

For instance, if I risked $500 per trade and took ten trades for a possible $5000 loss for the week and ended with $10,000 in profit, that is a 2RR gain. So in the spirit of keeping both sides of the equation equal (see, I am catching on to the math) both need to be reported.

If anyone has a better handle on how to do this, drop me a line.

5M


30M

10 comments:

  1. Nice job. Have a wonderful weekend.

    Shenan

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  2. Congrats! Solid week AND living away from the charts...difficult to do but usually brings good results.

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    1. Thank you! Being away from the charts is almost the best part!

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  3. Well damn, you make it sound so easy. Beautiful!
    And that chart does need to catalogued, so pretty!

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    1. If it was easy, I'd have done it many moons ago! But in the end, I think it can be simple if not easy. Certain things need to be present to take a trade. If not, no trade. The rest is just mental and emotional. Watching youtube has helped a lot. It takes my mind off the charts. I even put the videos up in front of the charts so I can't see what's going on.

      I also think I reported the RR wrong. I just added up all the +RR's but thats not really accurate. Its still only about 2.5RR if I add up all the risk in terms of how much dollar risk I took total for the week vs total dollar win for the week. For instance, if I risked a total of $1000 at $100 per trade for ten trades and ended with $2000 in total profit, the its really only 2RR aggregate. I think I will revise my reporting.

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    2. pooo-teto, potatoh!

      if such is the case for aggregates, add your total weekly REALIZED losses and then ratio them with your weekly REALIZED profits.

      that would be the profit factor I think, and the true RR.

      a potential stop did not not get hit but ended up being a winner, doesnt necessairly count in aggregate calculations.

      And of course, i am getting way the eff too pedantic...i need a drink.

      It must be 5 o'clock somewhere...so said alan jackson!

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  4. In your above example, what you've actually reported is E (Expectancy) which I've only just realized can be calculated using those three values - Number of trades, Risk per trade and total profits.

    E= (Avg Win*WR)-(Avg Loss*LR)
    Also
    E= (Total profits/Number of trades)/Avg Loss.

    So, using your example, your E=2 (Extremely good!) but the number of R's you returned= 20.

    If you put in your WR and LR in the above, you'll see that the two formulas return the same values. If risk is fixed, reporting the 20R figure is more informative IMO, especially when you know that R=X% of your account. (i.e. R=0.125% means making 20R, 20 times your fixed risk, means you made 2.5%).

    Hope that makes sense!

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    1. Hey James, thanks for that. I appreciate it. I'll play around with those formulas. I'm not a math fan so I'm thinking of just paying for one of those online journal/trade tracker things that does all the heavy lifting for you....but I haven't made the leap yet!!! Thanks again!

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