Origin Two common types of trading systems with positive expected returns

Ganhuo Xuehui | Two common types of trading systems with positive expected returns

original

2017-01-13

Jason

OriginHuixiang Technology

Two common types of trading systems with positive expected returns

Dry Goods Learning Collection

The author has already introduced the concept of expected return of a system in the previous article, which is the result obtained by multiplying the average profit amount by the average probability of profit, and adding the average loss amount by the average probability of loss.

This result needs to be a positive value to ultimately accumulate profits in long-term trading.

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Therefore, we should not be too concerned about the profit and loss situation of a single transaction (losses need to be controlled), nor should we be too concerned about the stage of profit and loss. We should set our goals and vision in the long run, view transactions as a long-term business behavior, and ultimately achieve the goal of Long term stable profitability within a certain acceptable level of risk 。

Among them, we also need to consider the opportunity cost and the role of risk management in the long-term trading process. In today's chapter, the author will introduce to you Two common types of trading systems with positive expected returns 。

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1. Long term trend tracking strategy with high risk return ratio as the goal[/blockquote]

Assuming you decide to be a long-term trend tracker with the goal of trading with a high risk return ratio, you decide to40As a setting, the breakthrough point of Tian's channel Then, after a pullback, enter the market and set the stop loss just below that pullback.

Your initial profit target is at least10Profit at multiple initial risks. This means that you either exit the market at a loss or reach10Profit target twice the risk. Once you receive this profit, you will set a30%The withdrawal stop loss indicates that you are willing to return before leaving now30%Profit.

Using this trading system to represent a double initial risk is too small for you, and you will often be forced to leave the market, resulting in significant losses. However, your returns will generally be10Multiple or greater. If you find that there are only18%It is profitable, but there can still be a positive expected return.

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2. A trading strategy with high success rate and low risk return ratio[/blockquote]

If you think you really can't tolerate the possibility of long-term continuous losses and need to have60%The time is always correct, and in order to maintain a certain level of accuracy, you would rather sacrifice profits.

As a result, you have decided to adopt a volatility breakthrough method as your entry strategy. When you encounter a large fluctuation, it is likely to last for a period of time, so you decide whether the market is going up or down0.7Times Recently10You will enter the market with the average actual price fluctuation of the day, but after testing a large number of such entries, you find that the maximum unfavorable deviation rarely exceeds the average actual price fluctuation0.4Times.

Therefore, you have decided to use it as your initial stop loss. right0.6You are also very satisfied with the profit target of doubling the average actual price fluctuation. Because you believe that the goal can at least achieve60%The time has reached, In other words, you either end the transaction with a loss or achieve the profit target. This can also generate a trading system with positive expected returns.

[table=100%,inherit]                                                       Risk statement

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