Suppose that for a given setup, price hits target before it reaches invalidation 70% of the time. Great, right? But getting filled is not guaranteed.
The more right you are about your trade setup, the less likely you are to get filled
By extension, getting filled actually lowers the Bayesian probability that you are right
Should I sacrifice some RRR to get filled more often?
The eternal dilemma of contrarian trading
Suppose that for a given setup, price hits target before it reaches invalidation 70% of the time. Great, right? But getting filled is not guaranteed.
Scenario 2: If only 40 out of 100 limits get filled, expected hit rate is 25%
Both scenarios have 30 losses in expectation, but the hit rate in the first is >2x better simply because more trades were taken
EV = hitrate * avg_win_R + (1-hitrate) * avg_loss_R
So we want argmax(EV), and we can compute this by seeing how hitrate and avg_win_R affect the EV of the setup.
Here's a real example where I completed this optimization.
- the average win R tends to increase ("W:PR")
- the number of losses ("L") stays constant at 31
- but the number of trades taken decreases ("#")
- so the hit rate decreases, from a max of 67.7% to a min of 11.4%.
- Understand the tradeoff between RRR and hit rate. I talked about limit orders in this thread but a similar relationship applies to market entries too
- There are no easy answers here. Only the prospect of hard work collecting good data and learning from it.
💪
@Captain_Kole1 @melodyofrhythm @ape_rture @realadamli @7ommyZero @voicelessFvoice
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THE MEANING, SIGNIFICANCE AND HISTORY OF SWASTIK
The Swastik is a geometrical figure and an ancient religious icon. Swastik has been Sanatan Dharma’s symbol of auspiciousness – mangalya since time immemorial.
The name swastika comes from Sanskrit (Devanagari: स्वस्तिक, pronounced: swastik) &denotes “conducive to wellbeing or auspicious”.
The word Swastik has a definite etymological origin in Sanskrit. It is derived from the roots su – meaning “well or auspicious” & as meaning “being”.
"सु अस्ति येन तत स्वस्तिकं"
Swastik is de symbol through which everything auspicios occurs
Scholars believe word’s origin in Vedas,known as Swasti mantra;
"🕉स्वस्ति ना इन्द्रो वृधश्रवाहा
स्वस्ति ना पूषा विश्ववेदाहा
स्वस्तिनास्तरक्ष्यो अरिश्तनेमिही
स्वस्तिनो बृहस्पतिर्दधातु"
It translates to," O famed Indra, redeem us. O Pusha, the beholder of all knowledge, redeem us. Redeem us O Garudji, of limitless speed and O Bruhaspati, redeem us".
SWASTIK’s COSMIC ORIGIN
The Swastika represents the living creation in the whole Cosmos.
Hindu astronomers divide the ecliptic circle of cosmos in 27 divisions called https://t.co/sLeuV1R2eQ this manner a cross forms in 4 directions in the celestial sky. At centre of this cross is Dhruva(Polestar). In a line from Dhruva, the stars known as Saptarishi can be observed.
The Swastik is a geometrical figure and an ancient religious icon. Swastik has been Sanatan Dharma’s symbol of auspiciousness – mangalya since time immemorial.
The name swastika comes from Sanskrit (Devanagari: स्वस्तिक, pronounced: swastik) &denotes “conducive to wellbeing or auspicious”.
The word Swastik has a definite etymological origin in Sanskrit. It is derived from the roots su – meaning “well or auspicious” & as meaning “being”.
"सु अस्ति येन तत स्वस्तिकं"
Swastik is de symbol through which everything auspicios occurs
Scholars believe word’s origin in Vedas,known as Swasti mantra;
"🕉स्वस्ति ना इन्द्रो वृधश्रवाहा
स्वस्ति ना पूषा विश्ववेदाहा
स्वस्तिनास्तरक्ष्यो अरिश्तनेमिही
स्वस्तिनो बृहस्पतिर्दधातु"
It translates to," O famed Indra, redeem us. O Pusha, the beholder of all knowledge, redeem us. Redeem us O Garudji, of limitless speed and O Bruhaspati, redeem us".
SWASTIK’s COSMIC ORIGIN
The Swastika represents the living creation in the whole Cosmos.
Hindu astronomers divide the ecliptic circle of cosmos in 27 divisions called https://t.co/sLeuV1R2eQ this manner a cross forms in 4 directions in the celestial sky. At centre of this cross is Dhruva(Polestar). In a line from Dhruva, the stars known as Saptarishi can be observed.
