Scott Malkinson On execution
But every profitable trader knows how to execute an imperfect strategy.
Scott Malkinson · Trading since 2005.
Here’s the game you’re actually playingNo guarantees.
No improvising.
The wrong game
The fantasy
You keep adding conditions because every loss feels like evidence that something is missing. Another indicator. Another filter. Another rule to keep you out of the trade that just hurt.
The goal becomes a strategy that tells you exactly what will happen. That goal makes you abandon workable ideas in search of impossible certainty.
A losing trade can be perfectly executed. A winning trade can be a complete mistake.
Know exactly what must be true before you act.
Decide what the trade can cost before you enter.
When your conditions appear, execute without negotiation.
Manage the trade by the plan, not by how you feel.
The odds
Expectancy is only half the story
A strategy can make money on paper and still put you out of the game. The question is whether your account, your loss limits, and your discipline can survive the path to that return.
Win 25% of your trades at a 1:4 risk-to-reward ratio, or win 60% at 1:1. The first has slightly higher expectancy. The second has a higher profit factor and less than half the volatility per trade. In this model, the 60% system is the smoother one.
1R is the amount risked on a trade. A 1:4 trade risks 1R to make 4R.
| Metric | 25% WR1:4 | 60% WR1:1 |
|---|---|---|
| Win / loss | +4R / −1R | +1R / −1R |
| Break-even win rate | 20% | 50% |
| Expectancy per trade | +0.25R | +0.20R |
| Profit factor | 1.33 | 1.50 |
| Standard deviation per trade | 2.17R | 0.98R |
| Profitable after 100 trades | 85.1% | 97.3% |
| At least | 25% WR1:4 | 60% WR1:1 |
|---|---|---|
| 4 losses | >99.99% | 80.1% |
| 5 losses | >99.99% | 45.9% |
| 6 losses | 99.9% | 21.2% |
| 7 losses | 99.0% | 8.9% |
| 8 losses | 95.7% | 3.6% |
| 10 losses | 79.0% | 0.58% |
WR means win rate. Streak odds mean at least one run of that many consecutive losses anywhere in 100 trades, not just the next few trades.
That same streak hurts both accounts equally at the same sizing. What changes is how often it shows up: about 79% versus 0.58% over 100 trades. Risk a fixed 1% of starting equity instead, and ten losses cost exactly 10%, before fees and slippage.
Ruin means hitting the point where you can no longer continue. That might be an account loss limit, a margin requirement, or your own capital floor. Its probability depends on that boundary, position sizing, and the sequence of all trades. A mix of wins and losses can also breach a limit. The streak table alone cannot tell you your chance of ruin.
If both systems hold up equally well on unseen data, the 60% system offers a smoother path in this comparison. That extra 0.05R of expectancy comes with a lot more volatility. Size for the losses you may have to sit through, not just the return you hope to collect.
Model assumptions: 100 independent trades, unchanged win probabilities, exact stated payoffs, and no costs. Profitability uses a fixed cash value of 1R and means finishing above zero, not breaking even. These are calculated examples, not observed trading results. Real losses can cluster and edges can change. A smoother model does not prove a more robust strategy.
Method: binomial probabilities for final profit; exact run probabilities for losing streaks. References: NIST on the binomial distribution and CME on position sizing.
Here’s the part nobody wants to admit.
Live trade log
From the channel
Active position BA LONG LIMIT Entry: 205.36000
View post in TelegramActive position BA LONG LIMIT Entry: 205.67000
View post in TelegramActive position ABT LONG LIMIT Entry: 103.77000
View post in TelegramThese posts document personal trades and are not trade signals, recommendations, or invitations to copy positions. The sole purpose is to demonstrate that my advice isn't BS.
Facts over hope
Scott’s advice
Let’s talk: Hopelines.
Y'all out here drawing lines that can be drawn a dozen different ways and still be "valid" hoping you make money. You should be trading facts, like "70% of the time if X then Y". THAT is edge, hopelines aren't edge as you can draw them however you want.
If you can move the line after the trade fails and call it valid again, what did you actually test? A rule should mean the same thing before the outcome as it does after. Define X. Define Y. Record every qualifying setup, including the ones that lose.
And a win rate alone doesn’t settle it. Know how much you make when you’re right, how much you lose when you’re wrong, and what costs take out. Give yourself rules you can repeat and results you can measure. Make the idea earn your confidence.
Scott Malkinson