90% get it wrong?

bangzilla

Junior member
27 0
hi everone, im new here

i have something to say about having a 50/50 chance if you have no experience and you're not educated.

This is not true
proof: every single one of my first 15 trades lost money. thats 15 in a row, then i decided i had had enough and read a book on it :D
reason for loosing:
uneducated/unexperienced traders and investors tend to buy right at the top, the worst possible time to buy, when greed finally kicks in. Giving them a much less than 50/50 chance of winning.
 

Lord Flasheart

Legendary member
9,796 975
I undestand where your coming from,but statistically you have a 50% chance at any point.There are books written about this. If a roulette wheel gives 10 reds in a row the chance of another red is still even money.How many of your 15 trades were up at some point proving the point that at any given point it is 50/50. Ive spent many years trying to buy at the bottom only to find it is not the bottom again proving the point tops and bottoms are so easy in hindsight. My original point was that if you flicked a coin and went long on heads and short on tails you would have a 50/50 chance of it hitting a defined target, and yet 90% still lose.
 

bangzilla

Junior member
27 0
I undestand where your coming from,but statistically you have a 50% chance at any point.There are books written about this. If a roulette wheel gives 10 reds in a row the chance of another red is still even money.How many of your 15 trades were up at some point proving the point that at any given point it is 50/50. Ive spent many years trying to buy at the bottom only to find it is not the bottom again proving the point tops and bottoms are so easy in hindsight. My original point was that if you flicked a coin and went long on heads and short on tails you would have a 50/50 chance of it hitting a defined target, and yet 90% still lose.

Hm interesting.

heres my take on it
what you need to understand is that if all the variables could be measured in the flipping of a coin, one could theoretically calculate what side a coin would land on. Similarly with a roulette wheel, with all the forces taken into consideration, one could calculate the exact number the ball would land on. but the fact of the matter is that there are far too many changing variables that cant be precisely measured (not easily anyway). My point is that probability (as we understand it) is an abstract concept, it doesn't actually exist. it is only what we perceive as probability.

With that said, the direction that a stock will go in has far simpler observable and measurable variables acting upon it. those variables being the psychology of the traders involved, volume, sentiment of markets etc. This gives an oversold or overbought stock the tendency to retrace (depending on the s sentiment of the market, futures, volume, and so on)

On the other hand
bingo balls popping out of the machine have a continuously varying air stream. imperfect walls (creating further varying turbulance and affecting the direction that balls will bounch off of), imperfect balls,, etc you get the point, but you better believe that if it were possible to measure all those variables and surfaces down to the atomic level, one could calculate which balls would pop out and in what order.
my point is that a stock is often easier to predict than a coin. We only say a coin is random because we are unable to measure all the variables

I think it could more likely be compared to a tug of war rather than tossing a coin. with a tug of war, although not always, one can gain a sense of whose going to win. There are more easily observable variables.

in the end i think that you as an experienced trader has a better "probability" of winning while attempting to buy at the bottom than an inexperienced trader not knowing better always buying in an overbought situation.
 

Charlton

Experienced member
1,501 325
Hm interesting.

heres my take on it
what you need to understand is that if all the variables could be measured in the flipping of a coin, one could theoretically calculate what side a coin would land on. Similarly with a roulette wheel, with all the forces taken into consideration, one could calculate the exact number the ball would land on. but the fact of the matter is that there are far too many changing variables that cant be precisely measured (not easily anyway). My point is that probability (as we understand it) is an abstract concept, it doesn't actually exist. it is only what we perceive as probability.

With that said, the direction that a stock will go in has far simpler observable and measurable variables acting upon it. those variables being the psychology of the traders involved, volume, sentiment of markets etc. This gives an oversold or overbought stock the tendency to retrace (depending on the s sentiment of the market, futures, volume, and so on)

On the other hand
bingo balls popping out of the machine have a continuously varying air stream. imperfect walls (creating further varying turbulance and affecting the direction that balls will bounch off of), imperfect balls,, etc you get the point, but you better believe that if it were possible to measure all those variables and surfaces down to the atomic level, one could calculate which balls would pop out and in what order.
my point is that a stock is often easier to predict than a coin. We only say a coin is random because we are unable to measure all the variables

I think it could more likely be compared to a tug of war rather than tossing a coin. with a tug of war, although not always, one can gain a sense of whose going to win. There are more easily observable variables.

in the end i think that you as an experienced trader has a better "probability" of winning while attempting to buy at the bottom than an inexperienced trader not knowing better always buying in an overbought situation.
Bangzilla

You need to tip probability in your favour and to examine how the different levels of probability affect your account, particularly when looking at runs of wins or runs of losses i.e. can you sustain your account intact long enough to see the probability game being played out.

If you have not done so already, you might like to read Douglas "Trading in the Zone", which discusses probability in trading as well as associated psychological aspects of trading.

Charlton
 
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Trader333

Moderator
8,601 931
It all depends on:

1) What you are trading

2) Market volatility

3) How you go about setting your initial stop because if you set your stop too close (and most people do) then you dramatically increase your chance of a losing trade.

4) Position size at entry which should also be taken into consideration (and again in most cases it isn't) as this will have a long term effect on the ability to be consistently profitable.

Without considering the above the chance of being consistently profitable is much much less than 50% and probably accounts for why 90% lose in the long term.


Paul
 

Lord Flasheart

Legendary member
9,796 975
The variables you talk about in the market do not apply. If I set an RSI setting and it is overbought when it is over 75.THERE IS STILL a 50% chance it will rise from that point.There are as many new traders who sell at exactly the point of which you are buying at where you got your 15 trades wrong. This and this alone is why discipline and money management are the most important parts of trading. A simple moving average can reap huge rewards if used correctly even though if you back tested it it may look like a losing method.Then times in the past when Ive had 15 losers on the trot have all been through ill discipline e.g. (the market was just kept going up so i selling beleiving it was overbought and was due to drop. Not only that,how do you think Id feel if I went short 14 time and then went long only to find the market fall) YOU LOST 15 TRADES ON THE TROT BECAUSE OF YOUR EMOTIONS or if you are a good trader you were **** unlucky
 

Lord Flasheart

Legendary member
9,796 975
im sure trader333 and charlton will give some good advice,I am no great success. Most of what u need is available on this site.
 

agatto2

Newbie
2 0
Hi Tim,

Pure price action. If it's going up go long and visa - versa.

Indicators muddle things.

Of course you have to work out when to enter and when to get out!

For that reason I personally like 5 minute charts as I think smaller timeframes are too noisy.

JonnyT

Spot on Jonnyt - I do like to add in a simple 8 ( adjust to stock ) period moving average on my five minute charts. Our brains work a bizillion times faster then a computer . When you get used to a stock ( by watching day after day ) you will totally understand what this means, and be able to react for profits. My first post here awwwww. Like the site though. Some really good threads. Tony G
 

nkruger

Established member
855 76
You cannot predict the future where prices is going, but if you look back - there seems to be an order in HINDSIGHT, but of course there is none – Trading is an illusion.

Never forget you can trade with the....

HINDSIGHT SPEADBETTING Co.

50 pip spread on the DOW ~ but hey, that's not a prob........
 

nkruger

Established member
855 76
Can't remember who said this (Options remembers)

It's easy to spot an entry signal in the middle of the screen, the skill is spotting on the right hand side.......
 

laptop1

Experienced member
1,105 131
Never forget you can trade with the....

HINDSIGHT SPEADBETTING Co.

50 pip spread on the DOW ~ but hey, that's not a prob........

SPEADBETTING is not Hindsight, they know in advance what they are going to do with price. whether they'll let you trade it or not!::cheesy:
 
 
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