How not to make money trading the markets (part 2)

Splitlink

Legendary member
10,850 1,232
Hotchy I have a more exciting idea! Why don't you flip the coin, head-long tails-short. Have an equal risk reward. If the trade wins then flip and enter again. If it loses - Martingale and DOUBLE UP in the same direction. That would be good to watch! ;)
An exciting idea? Depressing, in my opinion. It is the attitude of someone who has given up on TA. I believe that short time frames are random but have not given up on the possibuility that they might not be.

If I see a trend in place, short term, I am not going to toss a coin to decide which way to go. I am going to follow my opinion and trade where I believe the probability is. Otherwise, what am I doing here? I might as well be throwing dice. At least, I would know that I, and all my opponents are all brainless. Trading might be the same, but it is more complicated. Why bother wirh it, then?
 

the hare

Senior member
2,949 1,283
An exciting idea? Depressing, in my opinion. It is the attitude of someone who has given up on TA.
I dont necessarily think they've given up. I do the equivelent of flipping coins for entry, and it took hundreds of thousands of man hours in research to pull the trick off. In fact its the most valuable exercise I ever did. It makes you focus on exits, trade management and position size.

I'd argue that flipping coins is the starting point for actually begining to understand technical analysis, and starting to understand trading as a probability based game. After that the next stage is the application of TA to random markets. Until people actually do this they generally dont have the first idea about TA !

Whilst there are perfectly good methods in the public domain bassed on TA confluence, I really dont think that most people are able to apply these without a firm understanding of how a technical edge should be exploited, or an understanding of the random distribution in returns. Flipping coins, if done correctly is a good a way as any to start to understand that process.

flipping coins has very many benefits. It completely removes any expectation of profit, and it allows those undertaking the exercise to focus on the important lesssons that can be learned from the exercise, rather than the pursuit of profits.

Your comment about about trend is spot on. Even flipping coins for entry you'll find that the majority of your winners are with trend, and the majority of your losers are countertrend. This of course assumes that the dunces understand what a trend is and how to measure it, which most dont because rather than using their eyes and experinece they try to find an indicator to tell them if somethings going up or down ! :LOL:
 

Splitlink

Legendary member
10,850 1,232
I dont necessarily think they've given up. I do the equivelent of flipping coins for entry, and it took hundreds of thousands of man hours in research to pull the trick off. In fact its the most valuable exercise I ever did. It makes you focus on exits, trade management and position size.

I'd argue that flipping coins is the starting point for actually begining to understand technical analysis, and starting to understand trading as a probability based game. After that the next stage is the application of TA to random markets. Until people actually do this they generally dont have the first idea about TA !

Whilst there are perfectly good methods in the public domain bassed on TA confluence, I really dont think that most people are able to apply these without a firm understanding of how a technical edge should be exploited, or an understanding of the random distribution in returns. Flipping coins, if done correctly is a good a way as any to start to understand that process.

flipping coins has very many benefits. It completely removes any expectation of profit, and it allows those undertaking the exercise to focus on the important lesssons that can be learned from the exercise, rather than the pursuit of profits.

Your comment about about trend is spot on. Even flipping coins for entry you'll find that the majority of your winners are with trend, and the majority of your losers are countertrend. This of course assumes that the dunces understand what a trend is and how to measure it, which most dont because rather than using their eyes and experinece they try to find an indicator to tell them if somethings going up or down ! :LOL:
We have a lot in common because I have, always, believed that eyesight is quicker and more reliable than indicators in spotting trends.

However, do you realise that 100,000 man hours is, working 12 hours per day, 22 years? How much time do you think I've got? :cry:
 

neil

Legendary member
5,167 746
We have a lot in common because I have, always, believed that eyesight is quicker and more reliable than indicators in spotting trends.

However, do you realise that 100,000 man hours is, working 12 hours per day, 22 years? How much time do you think I've got? :cry:
You sound like one of those people who, because of advancing years, no longer walk past cemetaries but turn in and examine the headstones etc, as if window shopping!
:LOL:
 

Hotch

Experienced member
1,410 256
Sarcasm fail?
 

Splitlink

Legendary member
10,850 1,232
You sound like one of those people who, because of advancing years, no longer walk past cemetaries but turn in and examine the headstones etc, as if window shopping!
:LOL:
No, I don't do that but I do read the obituary column more often than I used to.

I was reading it one morning in the gym and a friend looked over my shoulder and said

"DON'T READ THAT"! Frightened me out of my wits. :D
 

megamuel

Experienced member
1,098 164
Well I just thought it was a little more interesting than the original idea of just flipping a coin and entering a trade with a fixed stop and target. Surely if he enters a 50:50 trade and has a target bigger than his stop, he's gonna lose unless he is using some other criteria for his trades that he hasn't mentioned?

With the idea I suggested, at least it has some aspects of mean reversion in that the further price deviates away from your entry the more exposed you become to the market. Sure it won't work long term but neither will his first idea, unless as I say, there is something he is not telling us about!

Anyway, I guess nothing much is exciting any more in such advanced years.... :LOL:

Just kidding :cheesy:

Sam.

An exciting idea? Depressing, in my opinion. It is the attitude of someone who has given up on TA. I believe that short time frames are random but have not given up on the possibuility that they might not be.

If I see a trend in place, short term, I am not going to toss a coin to decide which way to go. I am going to follow my opinion and trade where I believe the probability is. Otherwise, what am I doing here? I might as well be throwing dice. At least, I would know that I, and all my opponents are all brainless. Trading might be the same, but it is more complicated. Why bother wirh it, then?
 
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