I don't know what I am doing

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Old Jun 4, 2009, 6:20am   #1
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Default I don't know what I am doing

OR:
What I am doing is one-step removed from reality, and I am trading a restricted vision of reality.

Markets move.
They rise, fall or range.
They move, sometimes gently, sometimes sharply.

My indicators are an abstraction of, and a form of proxy for the underlying reality. They are not the reality.

It is dawning on me that my rules are arbitrary, and curve-fitted. However, the curve-fitting is relatively robust. So far.
Even the Turtle rules for 20 and 55 day breakouts must be a form of curve-fitting.
And, any mathematically derived formulae, must, of necessity, be a lucky happenstance.
For example, the ACD pivots. (Mark Fisher)

Even patterns are an attempt to contain reality into a structure we can recognise.

Its all money management, isn't it?
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Old Jun 4, 2009, 6:22am   #2
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Default Re: I don't know what I am doing

Money management and risk:reward ratio.
Entries only help identify places MAYBE price will accelerate for you abit faster than normal.

Pivots for example - Random levels, why not.
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Old Jun 4, 2009, 6:36am   #3
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Default Re: I don't know what I am doing

If markets genuinely trend, then with arbitary liquidity then yes, all you need is money management...
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Old Jun 4, 2009, 6:40am   #4
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Default Re: I don't know what I am doing

Quote:
Originally Posted by HaloTrader View Post
Money management and risk:reward ratio.
Entries only help identify places MAYBE price will accelerate for you abit faster than normal.

Pivots for example - Random levels, why not.
Is pivot theory a big part of your 100% system then
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Thanks! The post above is recommended by: goatse
Old Jun 4, 2009, 6:48am   #5
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Default Re: I don't know what I am doing

I get the point you are making and it is thought-provoking, but the only thought it has provoked so far for me is "what is the alternative?".

I'm not sure about the statement below though...?...

Quote:
Originally Posted by trendie View Post
And, any mathematically derived formulae, must, of necessity, be a lucky happenstance.
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Old Jun 4, 2009, 6:51am   #6
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Default Re: I don't know what I am doing

re: the question at hand, I reckon you're not far off. A good 'system' as far as I'm concerned is more about your money management principles than much else; I'm not much of a believer in a rigid set of trading criteria, as I believe that as a local you can be easily exploited - as a basic example, anyone trying to straight out buy/sell support/resistance trendlines would have a very rough time of it in front of the ladder. For me (from my admittedly limited experience), it's the ability to consistently act in your best interests, being able to take your lumps and move on, and on occasion listening to your gut when it's telling you you're wrong, rather than waiting to be proved wrong.

However, there are a 1,000,001 different ways to skin a cat, and people like bnaimy seem to be very successful with a rigid trading plan. That said, I'd wager that out of the hundreds of people on T2W who have read and no doubt attempted to duplicate his system, very few (if any) will have had his results.

SL
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Old Jun 4, 2009, 6:54am   #7
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Default Re: I don't know what I am doing

I like to think of it in the way that chess players approach the game; if you can look past what the market is doing now, and look at what you feel that the players are looking to do two or three moves ahead, you can have a lot more confidence when you step up to buy when the whole world seems to be selling.
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Thanks! The post above is recommended by: Technically Fundamental , Lord Lucan , superfly
Old Jun 4, 2009, 7:03am   #8
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Default Re: I don't know what I am doing

trendie started this thread SL,

I relate to your point about taking signals. I have moved away from totally mechanical, and try to understand the context within which a signal is given. For example, after two consec losses, if it becomes apparent the market is in a range, I switch to breakout mode.

But, back to my post, I feel that I am responding to patterns that once gave a specific result, without necessarily understanding the true cause of the pattern; government action, cross-currency actions by companies, hedge-funds, etc.

Much as if I am sacrificing a virgin to the sun-god, in the hope I will achieve a bumper harvest, without realising perhaps I ought to use better fertiliser for my crops.
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# If the only tool you have is a hammer, you tend to see every problem as a nail - Abraham Maslow
# There are 10 kinds of people in the world; those that understand binary, and those that dont. -Anon
# Ed Seykotas Whipsaw Song http://www.youtube.com/watch?v=LiE1V...Wlxk8&index=10
# Defeat is temporary. Giving up makes it permanent. Anon
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