Coin flips psychologically better??

Vaco

Senior member
2,134 269
coin flip entry, then you would do the damage with analytical musings regarding exit at loss or profit
 

DionysusToast

Legendary member
5,963 1,499
On the other hand, if you don't want to be making tough decisions under pressure - don't trade.

If you enter @ random, you better be sure you can manage a trade well, that also means being able to make a call on whether the trade is working out or not. Which means, if the trade is directional, being able to understand and call the direction.

There is an unusual phenomena a lot of traders experience. With no money on the line, it is hard to figure out if the market is attempting to move up or down. With money on the line, for some reason, it becomes easier to 'read' whether the trade is working out or not. This is not the same skill as closing a trade when you intuitively know you are screwed but that's a different issue.

It's the same skill but for some reason, having money on the line makes a huge difference to how you are able to interpret the action.

Other than that, I see no benefits to random entry. Although, this is a fairly decent benefit. You do not have to go into your random trade full size, rather you could 'send a scout out' with your random trade and add into it later.

It's not my cuppa but it's the only way in my imagination that you could make it work to your benefit.
 

DionysusToast

Legendary member
5,963 1,499
coin flip entry, then you would do the damage with analytical musings regarding exit at loss or profit

Indeed - with the added benefit of doing your analysis when you are committed and engaged.
 

Jason101

Experienced member
1,372 215
If a trading method does not work on a random entry on a randomly generated chart, then it is not worth bothering with.
 

forker

Senior member
2,688 500
If a trading method does not work on a random entry on a randomly generated chart, then it is not worth bothering with.

A randomly generated chart will sit in a very tight range and be flatlinned when looking at it on a higher time frame. Does that sound like a typical trading instrument to you? What you saying is complete boll0cks. Randomness cannot generate repetitive patterns at the regularity that occurs in the market. Randomness definitely doesn't create trends. I have coded a random chart generator and it looks nothing like a chart for any financial instrument.
 

Vaco

Senior member
2,134 269
Indeed - with the added benefit of doing your analysis when you are committed and engaged.

Interesting how everyone has taken my comment as a positive when it was intended as a negative, the opp suggests that random entry is less stressfull as it takes away the need to think, however i am saying its worse because you have to think more when you have money on the line.

I always find it easier to see patterns and direction when i'm not in a trade, once i'm in I tend to only see the patterns which reinforce my trade direction and miss the clues which would have got me out at a smaller loss.
 

DionysusToast

Legendary member
5,963 1,499
Vaco

I agree with you - BUT...

I am ok at getting into a directional position.
I am smoking hot at knowing when a position is going to run against me.

It seems to me that once Ihave money on the line, I become way more engaged with the market. When there is no money on the line, when I am flat, I am simply not as good at making that call.

Let's say you trade 40 contracts, let's also say you are like me, somehow afflicted with the ability to get a better read on things once you are in a trade. Why not send out a scout? One contract to get that feeling of engagement and add more later?

I know one person that does this, although not randomly. When he feels the market will go one way, he throws out a couple of lots.
 

Vaco

Senior member
2,134 269
If I were like you Dino, then it seems I would have a valuable skill that would save me afew pennies.
 

the hare

Senior member
2,949 1,283
If a trading method does not work on a random entry on a randomly generated chart, then it is not worth bothering with.

FWIW I agree about the random entry comment. I have yet to find an edge from any entry method that was significant enough that it could be used with a random exit. I've got a bag full of exits with a large enough edge to use with a random entry. But of course, the majority of trading methods in the public domain aren't really methods at all.

Randomly generated charts are a different kettle of fish altogether, precisely because of the accuracy of the model that's being used to generate them.

I spent a lot of time attempting to develop systems for very simple random time series, and whilst I learned a lot from doing so, wasn't particularly successful. The closer you make those models to reality, the easier it gets.
 

Shakone

Senior member
2,458 665
I asked the question about what was meant by randomly generated charts from Jason101, because to me that usually means some sort of Random Walk, a Brownian motion or something normally distributed. And there is NO method that can have an edge if you're trading a Brownian Motion for example, so the comment made no sense to me, but perhaps he means something else. You could generate charts with certain statistical properties that enable a possible edge, but that would only have something to do with real trading if your model did behave reasonably like a market. And that's an incredibly difficult task (I've tried and am still trying).

I am not surprised about the difficulty in you finding a significant enough entry with random exit (more on this below) as I mentioned it to you on another thread. I think exits are more important and I can think of a few possible reasons, but I'll give an intuitive one. You decide to enter at a point based on some of the information (price or otherwise) up until that point. Once you're in, every minute that price is moving, you're picking up more and more new info that needs to be assessed. And surely one minute of this new info is MORE important than one minute of the history before entry because it directly affects your account, and because people are reacting based on this new info. Therefore as time goes on, the weight of the new information must at some point overwhelm in importance the conditions that got you into the trade in the first place. Sometimes this can happen quite quickly.

In terms of random entry. For me, entry and exit need to go hand in hand. They work together or they work against eachother. A particular entry can (and perhaps should) have a very different way of trade management until exit, from another type of entry. Others probably disagree. I wonder if your type of exit, may work well with random entry, but equally it might not work so well if you entered at a Fibonacci point or at a daily pivot or overnight in a set direction for example (please correct me if you believe it works equally well at all points and all times). However, I find it hard to believe that there is no entry that could enhance the profitability of your trades beyond what you get from random entry. Attempting to find an entry, which was significant enough such that a random exit would give enough profit, does not seem like the correct way to approach that problem. You'd be looking at the wrong thing.

I'm not suggesting I'm correct on all of this above, it's just my view.
 

DionysusToast

Legendary member
5,963 1,499
FWIW I agree about the random entry comment. I have yet to find an edge from any entry method that was significant enough that it could be used with a random exit.

Do you not think that this is down to the fact that the fundamental premise of a random exit is flawed?

Why would you even look for an entry method that would despite the fact that you could be taken out of the trade at any moment, good or bad? You would certainly have the holy grail of trading if such a thing existed...

Even searching for such a thing is rather bizarre.

The fact that you can't find an entry technique that would not stand up to random exits does not necessarily mean that entry techniques are bad.
 
 
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