muskoka joe

I think you are right in the sense you are talking about the what the thread was talking about .... scalping and day trading and probably discretionary at that. I was speaking more to systems that involve more then a few ticks. I should have paid more attention to what the thread was.

RR is dependant on the type of system you are using and what you are trying to maximize. You can certainly have good workable systems that run less then 1:1 RR. These systems as a general rule will not maximize dollar profit, but will often provide best opportunity to keep drawdowns low, and provide high accuracy. I base this on my hands on experience with testing systems. Very often what we feel is intuitively correct or is a market cliche does not hold up the scrutiny of empirical testing. RR paricularly can go either way especially when you are not optimizing for largest P/L.

Juro said most of what I would tell you. All I can add is that with this or any system when you test different exits you are testing different systems. Each must stand on its own. I know you are not saying this, but I see all the time stupid things like trade 5 and exit 1 at $50 to cover costs. Well that $50 Profit Objective better stand on its own as a profitable system or its just a drag on performance. The vast majority of the time ideas like this, or the breakeven stop (perhaps worst of all), sound so intuitively correct but are dead wrong when you actually crunch the numbers. I am glad to see you are not being hampered by thoughts that your RR "must" be something. Even though your RR is inverted to most systems it doesn't mean is will not work. Lastly I would add the more time you are in the market with a position the more tax on mental capital. If it were me I'd keep paying myself and then wait for the next trade.

============ This was a quite interesting article and almost entirely quite believable. At one point though he says his first strategy was "highly accurate and 2:1". While that is fantastic --- it is almost wholly incompatible that a high accurracy 2:1 system could produce a drawdown from $35K to $26K --- to do so he was ridiculously over leveraged, and if he was naive enough to be that over leveraged it calls the rest of what he says into question.

I used to be a prop trader for a large bank. We had anything we wanted. IMO Trade Navigator by Genesis is all that I would trust. And its still not perfect.