Quote:
Originally Posted by nvpliers
We need something to overcome the ultimate, consistent winner in this game, and that is "The House". The house will always get its cut [That's why Vegas does so well]. Yes, at times you get someone at the Blackjack table that scores, and scores big. But given enough players and enough time, the House always wins.
So, it's up to us to cheat the theory of "everything is random", by getting that edge. By getting into the same "plan" as that Black Jack winner. Getting that edge.
[I'm still looking for it!!!]
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Hey, I understand where you're coming from. I'm beginning to think that setting stop loss points on every orders is a "come get my money" signal for "The House". Your stop-loss is their take profit. They'll just look at the books (bookies) and see where the majority of the stop losses are and send the price in that direction ("stop hunting"). Isn't it curious how it is much easier for price to hit the stop-loss than the take-profit, even if the TP is twice as close as the SL?
I'm beginning to think that I'll need to set stop-losses based on % drawdown of equity. So, place a trade and then if your drawdown exceeds says 1%, close the position. That way, the "House" does not see your stop loss target and so you do not give them information for them to work against you. (I have no problem putting a TP target on my orders, since it won't bother me if the dealer takes the price in that direction...
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Or better yet, scale into the trade. Fire off the first position from a signal on a hourly chart. Take profit from that signal if possible. If not, fire off a position from the same signal on a daily chart. Take profit on those positions if possible. If not, fire off a third position from the same signal on a weekly chart. Hopefully you take profit from that (three positions opened at different prices - "trading like dealers do"). If you set a stop-loss to 1-5% of account equity and that drawdown is reached, only then do you get stopped out. It's a stop-loss mechanism which is not visible to the dealer. A "cloaked" stop-loss, if we were to think of it in terms of Star Trek.
That is the theory I am working on at the moment.