Fader123 replies to: Institutional Equivalent Education?

Some people asked about my trading performance for today and this week, after recording a +19% week last week.

In the following posts from Ray’s room I have edited out the typos and protected Stefan’s identity, but otherwise this is an accurate record. Note that the Timestamps are in EST:

(10:48 am) Ian Foster: Equities are giving me nothing. I’m calling it a day unless something really compelling turns up. Current performance is: Daily profit 6.4%, 54 trade parts, 15 losers so a 72% win rate, which I think is OK in the circumstances.

(10:50 am) Ian Foster: The problem is that I traded quite poorly at first and even had a whole losing trade

(11:02 am) Ian Foster: OK my figures for the week are : Profit +32%, ( to be precise 32.046%) , 240 trade parts, 52 losers including 2 whole trade losses (which is a BAD week for that), but the win rate is respectable at 78%

(11:04 am) Ian Foster: I am starting to get into (Mr Carlsberg’s) territory, except he does it in a day – LOL !

(11:03 am) Stefan F….: Ian what is your risk per trade?

(11:13 am) Ian Foster: @Stefan: It varies. On the Volume cycle trades which are nearly all DAX30 CFD and S&P500 CFD my max risk is around 2% per whole trade, for my rare ‘Sammy’ trades (Oil Inv 30min) it is around 3%, With my Currency News trades it is around 4% and with my Oil Inventories first 30min (spike) trades it is around 5%. They are done this way because of my trading record on them. I risk most on the trade types I have the best record on. The risk on the ‘Sammy Trades would almost certainly be higher – if only I had done a larger number of them, in fact it would probably be higher than for my other Oil Inventories trades.


I know that this idea of risking more on the least risky trades is heresy to some trading gurus. But most of them probably can’t distinguish between different trade types, or if the can they don’t bother keeping records.
The original idea of linking the risk to the expectancy (or the %win rate) come from the world of gambling and is known as the Kelly Criteria. However a trader would be crazy to use the actual risk values that the actual Kelly Criteria gives.
So I just use the principle behind it and adjust the risk to meet my own trading comfort zone.

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