Wall Street = Casino. Minus Sum Game.

This is a discussion on Wall Street = Casino. Minus Sum Game. within the General Trading Chat forums, part of the Reception category; Originally Posted by Xeno Re-read my post. I said what it tells you is true. That is a fact. At ...

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Old Jan 21, 2010, 10:45am   #113
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Xeno View Post
Re-read my post. I said what it tells you is true. That is a fact. At no point did I say it tells you what will happen next.

A moving average is just that. A moving average. The only thing it tells you is the value of the moving average, but what it tells you is true.
Xeno - explain this :

"What is unreliable is using TA to trade when you have no confidence that your system has an edge."

Surely that implies that you think a pure TA based system can have an edge ? This also implies that TA is predictive.
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I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

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Old Jan 21, 2010, 10:50am   #114
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread XLNX too - price droped before earnings but earnings & guidance up - let's hope the employment numbers don't put a damper on things.
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I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

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Old Jan 21, 2010, 11:05am   #115
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
Xeno - explain this :

"What is unreliable is using TA to trade when you have no confidence that your system has an edge."

Surely that implies that you think a pure TA based system can have an edge ? This also implies that TA is predictive.
Well, yet again this is the crux. The difference between an indicator predicting what happens next with a good degree of certainty and TA being used to develop a system that has a definable edge is the difference between the losing majority and the winning minority.

Yes TA is predictive, but only in the probabalistic sense you so love. There's no contradiction between an indicator's predictive power being described as unreliable, and a TA system having an edge defined by testing over a very large sample.
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Old Jan 21, 2010, 11:31am   #116
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread Well Xeno - I have seen zero evidence that any combination of indicators can produce a winning system.

All indicators are derived from a very limited set of information - mostly price & volume, so I'm lost as to how combining a number of things that all work on the same data set could possibly provide an edge.

I think the edge is discretion.
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I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931
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Old Jan 21, 2010, 11:45am   #117
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Re: Wall Street = Casino. Minus Sum Game.

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Well Xeno - I have seen zero evidence that any combination of indicators can produce a winning system.
Really? I thought you'd read market wizards ;-)

Surely you'd be the first to say that just because you haven't seen it it doesn't mean it doesn't exist.

So, out of interest, just how much work have you put into trying to produce a pure TA system with an edge?
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Old Jan 21, 2010, 11:47am   #118
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
Well Xeno - I have seen zero evidence that any combination of indicators can produce a winning system.
Have a look at the MLM index; decent evidence for trend followers (and the definition is very simple, involves a couple of moving averages if I recall) earning excess risk premium in certain asset categories.
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Old Jan 21, 2010, 11:59am   #119
 
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Re: Wall Street = Casino. Minus Sum Game.

Is the case that, unless your TA system works on all instuments and over a very large sample set over a long period of time, then it is just coincidence/luck that it is currently making money on say, the ES, and will stop soon?
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