Leaving too much on the table, or losses

This is a discussion on Leaving too much on the table, or losses within the General Trading Chat forums, part of the Reception category; Losing is my hate because when i win even a little i have the feeling that next time it will ...

View Poll Results: Which do you hate more?
Leaving too much on table? 1 25.00%
or taking a small loss? 3 75.00%
Voters: 4. You may not vote on this poll

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Old Feb 7, 2018, 6:43pm   #9
 
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Losing is my hate because when i win even a little i have the feeling that next time it will be better and i still did the right decision and im in the right path..

As one said: "No one got poor from winning little money" ... something like this..

Happy trading all!
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Old Feb 7, 2018, 7:10pm   #10
 
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Originally Posted by piphoe View Post
over-optimizing is a real concern too...oh well
Frankly I think the under optimizing is even worse...
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Old Feb 7, 2018, 7:13pm   #11
 
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piphoe started this thread "you can't go broke taking a profit".

i don't think that's true.
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Old Feb 7, 2018, 7:15pm   #12
 
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Frankly I think the under optimizing is even worse...
interesting, pls explain a bit more by what you mean by "under-optimizing"
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Old Feb 7, 2018, 7:21pm   #13
 
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interesting, pls explain a bit more by what you mean by "under-optimizing"
I guess, what I meant is: if you do not back test enough (at least 1 market cycle minimum), you are running the risk to constantly leave money on the table and limit your wining and consequently limit your ability to compound your winnings...
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"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

My number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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Old Feb 7, 2018, 7:29pm   #14
 
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I guess, what I meant is: if you do not back test enough (at least 1 market cycle minimum), you are running the risk to constantly leave money on the table and limit your wining and consequently limit your ability to compound your winnings...
Quantt, would define each so we are all on same page.

over-optimization? under-optimization?

we all have our own concept of each, so lets say explicitly what we are each talking about.
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Old Feb 7, 2018, 7:44pm   #15
 
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Quantt, would define each so we are all on same page.

over-optimization? under-optimization?

we all have our own concept of each, so lets say explicitly what we are each talking about.
One example would be betting size: if you read Alexander Elder's books where he is promoting risking only 1 or 2 percent, but this could be under optimization compared to using actual data and Kelly criterion for example to calculate the exact for betting size for your strategy...

If Kelly calculation is returning let's say 6% for back testing of 20 years - this could be an over optimization, because the future winning and loses cannot be quantified...

In this case as suggested as one of the first quants, maybe half a Kelly is the best to be used in the stock market - 3% in our example...
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"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

My number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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Old Feb 7, 2018, 11:53pm   #16
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One example would be betting size: if you read Alexander Elder's books where he is promoting risking only 1 or 2 percent, but this could be under optimization compared to using actual data and Kelly criterion for example to calculate the exact for betting size for your strategy...

If Kelly calculation is returning let's say 6% for back testing of 20 years - this could be an over optimization, because the future winning and loses cannot be quantified...

In this case as suggested as one of the first quants, maybe half a Kelly is the best to be used in the stock market - 3% in our example...
Have you read any of Nassim Taleb's books especially the one titled "Fooled by randomness"? Essentially in investing, it works until it doesn't and that randomness plays a much more significant role than is normally understood. What is a truly representative market cycle?
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