HENRYFOSTER
Newbie
- Messages
- 7
- Likes
- 0
If somebody has an experience of copying losing strategy with reverse, please post your opinion in this thread.
If somebody has an experience of copying losing strategy with reverse?
- Thread starter HENRYFOSTER
- Start date
- Watchers 2
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
that is only for failures who don't understand trading edge.
HENRYFOSTER
Newbie
- Messages
- 7
- Likes
- 0
Please, explain in details.
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
when you trade opposite of losing strategy , it does not make it profitable , since trading is zero sum game.You need high probability set up to get a winning trade.
P
postman
Whoooaaah theres your first mistake (on this thread anyway) trading is NOT a zero sum game. Please elaborate on why you think it is, and I'll show you where your wrong!
P
postman
However I agree that doing the opposite of a losing strategy isnt a winning strategy.
Look at the example todays Dow.
You go short on the Dow on the open (cause your Mad) and expect a 50 point move, very reasonable, so you set a stop at 25 points and a limit of 50. You get stopped out before your target is met.
So your a canny trader and you go long on the open expecting a 50 point rise (you da man) but before your limit is hit you are stopped out for -25 :-0
Two wrongs dont make a right!
Attachments
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
Whoooaaah theres your first mistake (on this thread anyway) trading is NOT a zero sum game. Please elaborate on why you think it is, and I'll show you where your wrong!
I am never wrong , only dumb people who trade with £300 accounts are.
P
postman
By the way, the Dow WILL move 50 points from the open today
P
postman
Notice how the dow went both -50 AND +50 from the point I marked.
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
Three replies to this thread and you still havent tried to back up your ludicrous claim that trading is a zero sum game.
Fail!
If you buy short term shares , they drop 60 % in value , you lose so it is zero sum game.Another person gains 60% , so you lose 60% + the spread .
In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant's gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants.
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
By the way, the Dow WILL move 50 points from the open today
relief rally after election , do the opposite.
P
postman
Heres why it is NOT a zero sum game, EVERYBODY who BUYS can win!
The following example shows why it is not a zero sum game.
Trader A buys google in 2013 at $280 he sells to trader B in 2104 for $500 and makes a $220 profit.
Trader B sells his google shares to trader C in 2016 for $780 making a $280 profit.
Trader C sells his shares to trader D ...
No one loses money its NOT a zero sum game.
Replace google with an S&P index tracker fund and its been working since trading began! Why? Because each month New money is added to the global share pot by pension funds and investors. Thats the key, its NOT a fixed pot of money required for a zero sum game, the pot grows every day.
I cant believe you dont understand this? How long have you been trading and you dont even understand the basics!
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
You buy 1 eur usd 1.1200 , 1 sells at 1.1201 , it is a zero sum game because one has to lose for another to gain.
P
postman
Your example is laughable. You have just stated someone buys and someone sells, you dont state if anyone wins or loses or why, just that a transaction has taken place. Then you just repeat your initial statement without further backing.
I have given you a perfectly rational example of how ALL participants make money buying shares and you have failed to show that the example is flawed. Unless you can discredit a perfectly good proof that this is NOT a zero sum game then it must stand.
Just repeating your own statement makes you look stupid, address the example I gave or concede the point. I have proved it is NOT a zero sum game.
foroom lluzers
Veteren member
- Messages
- 3,608
- Likes
- 138
Your example is laughable. You have just stated someone buys and someone sells, you dont state if anyone wins or loses or why, just that a transaction has taken place. Then you just repeat your initial statement without further backing.
I have given you a perfectly rational example of how ALL participants make money buying shares and you have failed to show that the example is flawed. Unless you can discredit a perfectly good proof that this is NOT a zero sum game then it must stand.
Just repeating your own statement makes you look stupid, address the example I gave or concede the point. I have proved it is NOT a zero sum game.
When they close the deal , both of them , at 10 pips higher include 1 pip spread .
The net result is one has gained 9 pips , the other has lost 10 pips = zero sum game.
P
postman
Just giving one example that backs up your point and ignoring the one that disproves your point is burying your head in the sand.
It is a basic premise of the scientific method that scientific theories are not proven; they are only disproven.
I have clearly disproved your theory that it IS a zero sum game with a perfectly rational example. Unless you can show that MY example is flawed then your simple theory is wrong.
donaldduke
Experienced member
- Messages
- 1,665
- Likes
- 260
You are using hindsight bias in your example, Google and the S&P have made new all time highs recently.
But lots of stocks crash and burn and never recover. Even Apple was going to zero had Steve Jobs not gone back in the 90s.
Even whole indexes spend decades before making new highs.
If you were middle aged person in the late 1980's and you bought the Nikkei 225 chances are you will be dead before the N225 makes a new all time high.
P
postman
Once again finding an example that fits the argument is not proof OF the theory.
However ONE single example disproving the theory is enough.
You could tell me you had endless examples of why the Earth is flat but it only takes one picture of the Earth from space to disprove ALL those examples!
Does no one know how ideas are proved and disproved anymore? I weep for the future of science.
P
postman
@foroom lluzers after being given the opportunity to support your argument and failing miserably, the best you could do was 'like' someone else's retort!
That is so weak, I'd be ashamed to post here again if I were you.
That is so weak, I'd be ashamed to post here again if I were you.
I hope its all clear now HENRY mate.
If not, let me give an example of why reverse strategy doesn't work.
Suppose the chart is at 10,000 and you see the TA suggesting a probability of price rising further, lets's say probability of 70%. So the maximum probability of price going down can't be more than 30%. 30% is no basis for a trade.
Even if it commences a downward movement, and is actually falling, so the initial outcome is within the 30% band, the probability of it falling for a significant distance and continuously has to be very poor until the entire chart pattern has been re-written.
It always seems like a great idea to bracket price with both a buy and a sell order, so that whichever way price moves you gain a profit. In fact, one direction is always more likely to occur AND continue than the other. If the probability is only 50% for each direction, then a significant move in either is unlikely and you would be opening a trade based on exactly a 50% probability, which equates to a coin-toss.
As has been said, high probability trades are what to look for.
