So where do you make YOUR money?

[DionysusToast]

SL - random entry can be done and you could do it yourself.

Let's say I give you a set of market conditions. Let's say I told you the market would move 3 points down, then 5 points up, then 3 down and 5 up etc.

Let's say this would continue for 3 months.

Let's also say I would ONLY tell you which market it was and when the start date/time would be if you entered at random BUT you had a free reign to implement other rules as you saw fit.

Now, being smart - you would be able to design a system that entered at random but still made you a profit because of the other rules you had in place.

 

[Shakone]

If the entry is random, the exit must be pot luck, too. You may think that it is planned. In fact it depends on a random entry. The trade has been built on a dodgy base.

No. Consider your method of trading, whatever it is. And suppose someone tells you the direction based on some random coin toss or anything random. And maybe he even gives you a random time as well. Given that you are in that trade, can you recognise whether it is against the trend and exit? Can you recognise if it is with the trend and let the trade play out for profit?

If not, why not?

 

[Shakone]

The REAL random entry + MM system works like this.

1 - enter the market on a coin toss
2 - trail your stop loss

In a market that trends, the bad coin tosses will be stopped out but the good coin tosses will see you staying in for the move because of the trailing stop. This relies on certain market conditions.

Random entry systems do NOT rely on having a profitable trader on hand to exit positions as soon as they have been placed to take the randomness out of them.

I love how you choose your own way of defining things, that aren't really what I am talking about. Forget 2- trailing your stop loss. I don't see where in the "random entry" part, you manage to get trailing stop loss out of it. It's absolute tosh.

Random entry, that's all. Not random entry with particular exit strategy like trailing stop.

 

[DionysusToast]

I'm just giving an example. A random system could be made in lots of ways.

If there are lots of profitable random entry systems, then could you please give us an example of one that doesn't need a seasoned trader on hand (who would have nailed the entry anyway) to exit the bad trades as soon as they are filled?

As for the breakeven comment. He may be able to do better than breakeven, even when he thinks it is the wrong way. Ever had a trade that after you entered, you soon knew it wasn't going to work out, and managed to exit at breakeven or better, rather than let it hit your stop? I have. And I'm crap.

It enters, it is a system of entry, and it has randomness. You're right, it is not a random entry system.

It is not at all random.

I could give a monkey 2 buttons. One button for short and one for long. When the monkey trades in the wrong direction, I kill the trade. When the monkey trades in the right direction, I let the trade run. I do not let the monkey exit the trade, I do that myself.

By your logic, I would have actually gotten a monkey to trade profitably.

 

[Shakone]

If there are lots of profitable random entry systems, then could you please give us an example of one that doesn't need a seasoned trader on hand (who would have nailed the entry anyway) to exit the bad trades as soon as they are filled?

No, because it DOES need a seasoned trader on hand. Why? Because exits are harder than entries as I've maintained all along. Yes a random entry system, requires someone very skilled to make it profitable. I never said it didnt', I simply said a random entry system COULD be made profitable. You insist it can't be made profitable, but you're wrong. It CAN. Would a good trader find a better entry, yes sure. But if you're talking about what is and isn't possible then that's a different issue to what a good trader would do.

 

[DionysusToast]

I love how you choose your own way of defining things, that aren't really what I am talking about. Forget 2- trailing your stop loss. I don't see where in the "random entry" part, you manage to get trailing stop loss out of it. It's absolute tosh.

Random entry, that's all. Not random entry with particular exit strategy like trailing stop.

Actually - this is not my way of defining things.

This is the system devised by Tom Basso & Van Tharp.

We determined the volatility of the market by a 10-day exponential moving average of the average true range. Our initial stop was three times that volatility reading. Once entry occurred by a coin flip, the same three-times-volatility stop was trailed from the close. However, the stop could only move in our favor. Thus, the stop moved closer whenever the markets moved in our favor or whenever volatility shrank. We also used a 1% risk model for our position-sizing system

The reason it worked was that the trends were long enough to cover the bad trades. In a choppy market this would not work.

Hence, the experiement worked because of complimentary market conditions.

And this Shakone is the source of many people talking about random entry systems working.

 

[Shakone]

The reason it worked was that the trends were long enough

Yes that is the reason THAT worked. That doesn't mean that is the only reason a random system entry with different exit criteria can ever work. You're being close-minded.

 

[DionysusToast]

No, because it DOES need a seasoned trader on hand. Why? Because exits are harder than entries as I've maintained all along. Yes a random entry system, requires someone very skilled to make it profitable. I never said it didnt', I simply said a random entry system COULD be made profitable. You insist it can't be made profitable, but you're wrong. It CAN. Would a good trader find a better entry, yes sure. But if you're talking about what is and isn't possible then that's a different issue to what a good trader would do.

According to Basso & Van Tharp, this is not the case. No-one touched the trades once entered, they just followed the rules.

Your case regarding the randomness of your proposed system is as tenuous as my monkey trading system.

As a method of increasing commissions, your system is second to none.

 

[Shakone]

Well good for Van Tharp and Basso, but I'd imagine their system worked because of trends. Whereas what i am talking about is different. Could a seasoned trader take this Van Tharp and Basso entry and make a profit out of it? Sure. Van Tharp and Basso can do it with basic rules.

So what is your point?

Seems like youre' now saying random entry can work under the right market conditions. So of course then doesn't that imply that a random entry system can work always if the trader can make an accurate judgement about whether market conditions are right?

 

[DionysusToast]

Yes that is the reason THAT worked. That doesn't mean that is the only reason a random system entry with different exit criteria can ever work. You're being close-minded.

and you are talking absolute nonsense and trying to make up for it by talking even more nonsense.

You have picked up some stuff off the internet, not understood the source of that information or studied it in any other way and then taken it as gospel and added a layer of supposition for good measure.

Your system isn't random, my monkey system isn't random. You do not have a random entry system that makes money.

It is a fallacy.

 

[DionysusToast]

Well good for Van Tharp and Basso, but I'd imagine their system worked because of trends. Whereas what i am talking about is different. Could a seasoned trader take this Van Tharp and Basso entry and make a profit out of it? Sure. Van Tharp and Basso can do it with basic rules.

So what is your point?

Ok - I think I know how to prove the point.

Let's meet up.

I'll sit you down with 2 buttons to press...

 

[Shakone]

and you are talking absolute nonsense and trying to make up for it by talking even more nonsense.

You have picked up some stuff off the internet, not understood the source of that information or studied it in any other way and then taken it as gospel and added a layer of supposition for good measure.

Your system isn't random, my monkey system isn't random. You do not have a random entry system that makes money.

It is a fallacy.

I don't even know the details of this Van Tharp basso thing. I didn't pick it up from the internet, so you're right I don't understand it, because I don't know it. I'm talking about actual experience.

The system I suggested isn't random. You're correct. It is random ENTRY. The strategy overall is not random, only the entry, that's the entire point.

I wonder why this frustrates you so much...

Don't tell people things can't be done because you can't do them Dionysus. Don't be so close minded.

 

[Shakone]

Ok - I think I know how to prove the point.

Let's meet up.

I'll sit you down with 2 buttons to press...

Thailand? Sure, sounds like fun How many trades do I need to do to convince you I have a statsistical sample

 

[DionysusToast]

I don't even know the details of this Van Tharp basso thing. I didn't pick it up from the internet, so you're right I don't understand it, because I don't know it. I'm talking about actual experience.

The system I suggested isn't random. You're correct. It is random ENTRY. The strategy overall is not random, only the entry, that's the entire point.

I wonder why this frustrates you so much...

Don't tell people things can't be done because you can't do them Dionysus. Don't be so close minded.

Aaah - so now you independently developed a profitable random entry trading system without input from the Basso experiment or the internet. Must have been a quiet week.

Your whole premise of random entry is as bogus as my monkey trading example.

If you had a trader who could trade outright positions, why would you enter at random when that trader would immediately kill the trade if it wasn't one he wouldn't have entered in the first place? The only thing you do by placing a trade that will immediately be closed is take on additional commissions and slippage. It's not a random entry system, it's a random commission system.

In a recent post, I sunk as low as to suggest you were as insightful as a monkey.

I would now like to apologise to the monkey community for making that suggestion.

 

[the hare]

No-one is making money with random entries as has been discussed umpteen times.

Take a look at Zupcon's old posts, he told you dunces everything you needed to know about random entries.

I was sailing with him last weekend in Gozo, Ive seen the guys trading account and I assure you he does just fine.

 

[bedsit]

Where from?

If I tried to make living from the trading at the moment I would be starving. The system keeps failing like there is no tomorrow.

 

[Shakone]

Aaah - so now you independently developed a profitable random entry trading system without input from the Basso experiment or the internet. Must have been a quiet week.

Your whole premise of random entry is as bogus as my monkey trading example.

If you had a trader who could trade outright positions, why would you enter at random when that trader would immediately kill the trade if it wasn't one he wouldn't have entered in the first place? The only thing you do by placing a trade that will immediately be closed is take on additional commissions and slippage. It's not a random entry system, it's a random commission system.

In a recent post, I sunk as low as to suggest you were as insightful as a monkey.

I would now like to apologise to the monkey community for making that suggestion.

Aha, the problem DT is that you realise that what I suggested as an example could in fact be profitable and therefore you are left with two options
1)Do a U-turn and admit random ENTRY can be profitable (unbearable for you).
2)Try to convince yourself and others that what I suggested is not random ENTRY

I see that you're trying 2. But the ENTRY direction is clearly random. You're logic is so flawed that you are attempting to convince me that because the EXIT involves a strategy, that somehow makes the ENTRY not random. Separate entry and exit in your mind and things will become clearer for you.


On a more general note. Suppose you have an edge Dionysus. And suppose that edge is worth 5%. How much of that edge would you attribute to entry and how much to exit? I know you can't be exact because it is hard to tell. But would you say that your exits contribute positively, negatively or not at all to your edge?

If it contributes negatively or not at all, then you should probably find a better exiting strategy.

If it contributes positively, then use that exiting strategy with a random entry, and if your exit strategy contributes enough, then you will have a positive edge with random entry.

 

[Shakone]

Where from?

If I tried to make living from the trading at the moment I would be starving. The system keeps failing like there is no tomorrow.

Why do you think your system is not workign well at the moment?

 

[DionysusToast]

You have a logical flaw Dionysus. If I can make £X a day with a random entry system, and I can make £5X a day with a good entry, why would I trade a random entry? I wouldn't. I'd be stupid to.

I don't even know the details of this Van Tharp basso thing. I didn't pick it up from the internet, so you're right I don't understand it, because I don't know it. I'm talking about actual experience.

I'm just giving an example. A random system could be made in lots of ways.

I'm confused now.

You posted an example only.
You are talking from actual experience.
You would be stupid to trade a random entry.
You are talking from actual experience.

Which is it, exactly ? Is it smart, is it dumb ? Have you done it, is it an example ? It appears you are saying you are stupid.

If you have a random entry system - why not share it with the uprofitable traders here so they can start making money ?

The idea of taking a good trader, giving him a coin to toss and letting him kill or follow random trades is really the most ridiculous thing I have seen on this site.

Tom Basso's system was smart but his main problem was that he was looking for something specific and when you look hard enough for something, you often find it. Hence double-blind studies in scientific research. He set out to prove something, so when he found it, he stopped looking.

 

[Shakone]

On a more general note. Suppose you have an edge Dionysus. And suppose that edge is worth 5%. How much of that edge would you attribute to entry and how much to exit? I know you can't be exact because it is hard to tell. But would you say that your exits contribute positively, negatively or not at all to your edge?

If it contributes negatively or not at all, then you should probably find a better exiting strategy.

If it contributes positively, then use that exiting strategy with a random entry, and if your exit strategy contributes enough, then you will have a positive edge with random entry.

Focus on this. Is it clear?