In considering overall risk there are generally two components to it. There is risk and uncertainty. Risk is the quantifiable portion of the equation. For example, if you are risking 2 % on any one trade and your protective stop level is set accordingly then you have quantified your known risk. Uncertainty is a risk factor that cannot be quantified upfront. You cannot define it and neither can you anticipate it other than the fact that it exist because we know of it from history. It can be far reaching like confluence of events leading to GFC or a change in policy like SNB leading to significant market dislocation and liquidity. On a smaller scale it can be significant news specific to an instrument like in your example. In such events your SL may not be sufficiently protective to limit your overall risk.
In regards to your faith in your indicators in that it is an all encompassing utility trading tool, I am unsure whether you are being incredibly naïve or too blind sided as to the limitation of indicators. Having three different clocks to tell the time doesn't mean you get better time information.
Is it meant to be an oxymoron statement?
Exactly my original point. If it works for you why are you whining? If it works just carry on.
Not sure what is your point. In trading, the outcome is either you win or loose on a trade.
There are some interesting points here.
My indicators are used to qualify a trading pattern I may be looking at.
ie: 1-2-3 UP..( The UP indicates the possible end of a down trend)
This pattern appears a lot of different places on a price chart. If I have 3 different indicators diverging from price then I read it as the end of a trend. I then will place a GTC at or above the #2 point of the pattern.
Then, if the GTC is triggered, that probably means that the trend was over and prices are PROBABLY going UP. If, on the other hand prices drop below the #3 point then the trend is likely not over.
Is this an ABSOLUTELY can't miss trading pattern? Aren't they all.:whistling
OK. An oxymoron trading Rule. That sounds like Military Intelligence.
One thing I've learned over the years in the trading arena is that
Nothing Is Absolute
"LOCK LIMIT DOWN" You really do not know what you're in for If you've never been in one. The lesson?
Do Not Trade Thin Markets!
NEWS TRAPS. Just a name I made up. There was no indicators indicating a pending doom. Also, a S/L wouldn't have saved your butt either.
The only saving grace for OHRP is that you can hang on to it until it disappears from the world. I still have a couple of stocks like that. I gave them to my daughter. You do not get that in the other markets; Commodities, FX, Indexes, etc. I've traded all of them.
OK, One more point.
"In regards to your faith in your indicators in that it is an all encompassing utility trading tool, I am unsure whether you are being incredibly naïve or too blind sided as to the limitation of indicators. Having three different clocks to tell the time doesn't mean you get better time information."
Indicators are TOOLS; just like "Price Patterns". That's it, nothing more.
They are not a
Be All To End All. I have 3 indicators I use for my pattern trading. Why 3?
Because if works for me. And that, my fellow traders, is really all that matters.
OK, that's my whining for the day. :innocent:
