jaspertrademaster
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Sounds like a good read.
I want to believe that it is not random, but this argues against me
virtuos0
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Whem traders talk of 'beating the market' they most often mean outperforming a market benchmark, which obviously is possible. So for example an equities trader might try to outperform the FTSE.
When you say we are not in compeition with the market but other players, I agree with you in a sense. However I think you need to draw a distinction between those trades where you are trading against (or with) the aggregate of market sentiment, such as a move away from risk caused by this Dubai debacle. And those trades where you are trading against (or with) an individual trader of group of traders such as front-running a trade or having inside information.
The markets are self organising chaotic systems that display fractal amplification throughout multiple time frames or degrees of magnitude.
The real chart shows the footprint of human decision making but the random chart does not. It is possible to create computer generated movements that look, to a degree, like market action but its the subtleties where they fall down.
The random chart shows a distribution which appears to have been created by a 50\50 choice of one step up or down. Markets do not operate like that as the enforced breaks of overnight and weekends create gaps that eventually get filled. They also create distributions or accumulations that are footprint shapes eg triangles. A triangle is simply a surfing congestion area where players take decisions earlier on each swing and shorten the highs and lows.
For this to have become a discussion on random vs whatever highlights where I was over 20 years ago. If markets look random it is IMO a reflection of the understanding of the viewer and is indicative of learning to be done.
The premise that trading is based on no better than 50\50 is also IMO wrong. Many patterns have been proven to have a 70% or slightly higher chance of giving at least a directional signal with many also giving a minimum expectation of distance. A H&S is a classic which is frequently quoted as 70% with a failure (hound of the baskervilles) as a powerful signal in the other direction. The logic is simple .... loads of people position for a H&S but if the market is driven the other way they are all wrong sided and to flatten add to market impetus as they get out. If having been horribly wrong sided they look for a loss correcting trade they then propel the market higher.
The real chart can easily be broken into the various components of charting and analytical interpretation which cannot be done with any conviction on the random data.
The real chart shows the footprint of human decision making but the random chart does not. It is possible to create computer generated movements that look, to a degree, like market action but its the subtleties where they fall down.
The random chart shows a distribution which appears to have been created by a 50\50 choice of one step up or down. Markets do not operate like that as the enforced breaks of overnight and weekends create gaps that eventually get filled. They also create distributions or accumulations that are footprint shapes eg triangles. A triangle is simply a surfing congestion area where players take decisions earlier on each swing and shorten the highs and lows.
For this to have become a discussion on random vs whatever highlights where I was over 20 years ago. If markets look random it is IMO a reflection of the understanding of the viewer and is indicative of learning to be done.
The premise that trading is based on no better than 50\50 is also IMO wrong. Many patterns have been proven to have a 70% or slightly higher chance of giving at least a directional signal with many also giving a minimum expectation of distance. A H&S is a classic which is frequently quoted as 70% with a failure (hound of the baskervilles) as a powerful signal in the other direction. The logic is simple .... loads of people position for a H&S but if the market is driven the other way they are all wrong sided and to flatten add to market impetus as they get out. If having been horribly wrong sided they look for a loss correcting trade they then propel the market higher.
The real chart can easily be broken into the various components of charting and analytical interpretation which cannot be done with any conviction on the random data.
chilltrader
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Wish I had seen your post earlier!
I'm giving up on trading forever with immediate effect.
What a f*****g waste of time, money and energy this has been!
Thanks for putting me out of my misery and proving what I suspected all along
Best of Luck to those who still think they can win using some "system"
ADIEU ALL!
I'm giving up on trading forever with immediate effect.
What a f*****g waste of time, money and energy this has been!
Thanks for putting me out of my misery and proving what I suspected all along
Best of Luck to those who still think they can win using some "system"
ADIEU ALL!
HawkTrader
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Wish I had seen your post earlier!
I'm giving up on trading forever with immediate effect.
What a f*****g waste of time, money and energy this has been!
Thanks for putting me out of my misery and proving what I suspected all along
Best of Luck to those who still think they can win using some "system"
ADIEU ALL!
Are you serious or is this just a really good joke?
Wish I had seen your post earlier!
I'm giving up on trading forever with immediate effect.
What a f*****g waste of time, money and energy this has been!
Thanks for putting me out of my misery and proving what I suspected all along
Best of Luck to those who still think they can win using some "system"
ADIEU ALL!
I hope your response was not caused by my input.
I have reached the point of despair with trading more times than I care to remember
but it is always just a case back to basics and rebuild.
Wish I had seen your post earlier!
I'm giving up on trading forever with immediate effect.
What a f*****g waste of time, money and energy this has been!
Thanks for putting me out of my misery and proving what I suspected all along
Best of Luck to those who still think they can win using some "system"
ADIEU ALL!
Yesterday, i was wondering if any of the full/part-time home traders/house husbands had ever used thier trading account statements to obtain a mortgage?
Made me laugh that one did.
Byyyyeeee!
May I throw a different angle at you regarding the first post of this thread...... why are you looking for order in the financial markets??????? Why even contemplate if it is a random walk?? It is not important.
Finding order is one of "mans" greatest flaws.....
"let's try to control this..... we are smart enough..... there must be order in this madness"......... right??
Personally it isnt about probabilities and finding a method that works 40% of the time and returns me 2 to 1... it's about human behaviour..... humans are forever going through cycles - boom & bust - and will be FOREVER. Why?? It's human nature man....... nothing more, nothing less..... The market isnt a random walk, it's got nothing to do with that....... it's pure human psychology denoted by price movements, crudely summarised by a price chart......... why do humans always try to find order in it????????? Study the human behaviour in the market and you WILL make progress..... look for indecision, euphoria, traps.... etc etc.
EG...Human traits.....
"i am scared - response.. sell"
"i am happy - response.. buy"
"I am greedy - response.. buy"
"i am full - response.. sell"
And the best one of all......
"i am trapped - response.. exit at any cost"
So the next time you make a trade....... instead of using your mathematical mind, employ your human behavioural skills.
Finding order is one of "mans" greatest flaws.....
"let's try to control this..... we are smart enough..... there must be order in this madness"......... right??
Personally it isnt about probabilities and finding a method that works 40% of the time and returns me 2 to 1... it's about human behaviour..... humans are forever going through cycles - boom & bust - and will be FOREVER. Why?? It's human nature man....... nothing more, nothing less..... The market isnt a random walk, it's got nothing to do with that....... it's pure human psychology denoted by price movements, crudely summarised by a price chart......... why do humans always try to find order in it????????? Study the human behaviour in the market and you WILL make progress..... look for indecision, euphoria, traps.... etc etc.
EG...Human traits.....
"i am scared - response.. sell"
"i am happy - response.. buy"
"I am greedy - response.. buy"
"i am full - response.. sell"
And the best one of all......
"i am trapped - response.. exit at any cost"
So the next time you make a trade....... instead of using your mathematical mind, employ your human behavioural skills.
tenbobtrader
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you maintain / create for yourself a constant view imvho
a benchmark so you can compare
a benchmark so you can compare
Christiaan
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it's not random it is all skill.Take you average trader that is consistently profit.If the markets were random their is no way possible to be profit for extended period of times.
One or two lucky trades ,ofcourse but if the markets were random and it is akin to gambling that means that the people who makes money consistenly is consistently luckier for extended periods.The skill you need in the markets is the ability to identify high propability trades.The hole idea behind tecnical analysis is to bring the odds in your favaor so that 70% or higher of your trades makes you money.Hell depending on what your risk/reward ratio is you can even make money with 50% accurancy rate.
trust me ask almost anybody on this forum they will all say the same thing.tecnical analysis is a complex concept that has evolved over decades and tecnical abilty takes time to develop.hell i'm still a rookie but when I look back at my ideas 6 months ago I want to laugh my head off.If I were to share these ideas from 6 months ago i'll be the lauging stock off everybody.my piont is it is a skill that needs to be fed and nutured.So keep at it if your losing money(hopefull in demo accounts)
One or two lucky trades ,ofcourse but if the markets were random and it is akin to gambling that means that the people who makes money consistenly is consistently luckier for extended periods.The skill you need in the markets is the ability to identify high propability trades.The hole idea behind tecnical analysis is to bring the odds in your favaor so that 70% or higher of your trades makes you money.Hell depending on what your risk/reward ratio is you can even make money with 50% accurancy rate.
trust me ask almost anybody on this forum they will all say the same thing.tecnical analysis is a complex concept that has evolved over decades and tecnical abilty takes time to develop.hell i'm still a rookie but when I look back at my ideas 6 months ago I want to laugh my head off.If I were to share these ideas from 6 months ago i'll be the lauging stock off everybody.my piont is it is a skill that needs to be fed and nutured.So keep at it if your losing money(hopefull in demo accounts)
You dont even need to right 50% of the time..... the most profitable guys are "right" about 30 - 35% of the time. (Read market wizards).
This is not true........ IT IS NOT 50 / 50 ..........!
Come on guys..... why do people think this???
Virtuos0,
The benefit is that most new traders think they need to be right all the time and focus on that "win rate"...... I was merely pointing out the fact that many old hands have the opposite aim, ie...... to be right just a few times. I do believe I have "spouted unfounded generalities" at all.
timsk
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You're both right, of course!
While it is possible to be very profitable with a very poor win : loss ratio, psychologically it's a very tough gig. My guess is that most traders would struggle to implement a trading strategy successfully that has a worse win : loss ratio than 50%. Not being able to better a random coin toss has gotta mess with your head! I'm sure such traders exist, but they're a rare breed, not least because success with such a strategy requires the trader to be very good at two things:
1. cutting losses quickly, and . . .
2. letting the winners run.
Anyone who's been trading for a while is probably quite good at the first, but relatively few traders ever really master the second.
None of this is fact, it's just my belief based upon reading forums like this one - so I could be very wide of the mark!
Tim.
While it is possible to be very profitable with a very poor win : loss ratio, psychologically it's a very tough gig. My guess is that most traders would struggle to implement a trading strategy successfully that has a worse win : loss ratio than 50%. Not being able to better a random coin toss has gotta mess with your head! I'm sure such traders exist, but they're a rare breed, not least because success with such a strategy requires the trader to be very good at two things:
1. cutting losses quickly, and . . .
2. letting the winners run.
Anyone who's been trading for a while is probably quite good at the first, but relatively few traders ever really master the second.
None of this is fact, it's just my belief based upon reading forums like this one - so I could be very wide of the mark!
Tim.
