Is Naked trading the last chance saloon?

[oildaytrader]

I am not saying for one second that PA fails. It is a valid method of trading. I was trying to say that PA is not the only way to trade. Putting that aside, what is a progressive betting system?

Progressive betting is when traders increase lot size after every loss .They expect to recover the losses with the increased lot size,they keep increasing the lot size until they win and recover all previous losses.

Sophisticated betting system combining negative and positive progression will work in trading .

A simple example is increasing lot size by 50% after every losing trade.

O D T

 

[Lord Flasheart]

The biggest problem with indicators is that you spend months trying different ones and when you think you have one that works you become totally blinded and tend not to look at what is going on in the chart.Indicators alone can never work.Anyone who says they do is lying,period.They can be used to help and assist and that is all.

Betting systems will increase earnings for succesful traders and increase loses for new and unsuccessful traders. The hardest things to do with a betting system is to reverse direction or wait for a suitable trade.

 

[Rossini]

Ok, but surely to be able to put such a system into practice one would have to trade so small initially (to be able to increase the bet sizes when inevitable losses come) that returns would be tiny for the best trading periods (where there are no losses). Seems a strange strategy to implement.

 

[zupcon]

Indicators alone can never work.Anyone who says they do is lying,period.They can be used to help and assist and that is all.

yeah right

 

[dr.blix]

Ok, but surely to be able to put such a system into practice one would have to trade so small initially (to be able to increase the bet sizes when inevitable losses come) that returns would be tiny for the best trading periods (where there are no losses). Seems a strange strategy to implement.

you've never heard the phrase 'double or quits'? not even in a B-movie western?

 

[Rossini]

Indicators alone can never work.Anyone who says they do is lying,period.They can be used to help and assist and that is all.

I dont understand, you start a thread, in effect asking for help, then when people try to give you a different view from the one that you hold, you dismiss it. And not only that you call them liers!!

 

[oildaytrader]

Ok, but surely to be able to put such a system into practice one would have to trade so small initially (to be able to increase the bet sizes when inevitable losses come) that returns would be tiny for the best trading periods (where there are no losses). Seems a strange strategy to implement.

Agreed.It is one I do not recommend, but what do you do if markets remain cxxx for a prolonged period of time?

If you have multiple strategies (as many as 25) using progressive betting,using both positive and negative progression,one can achieve a smooth equity curve year in year out.It is very useful because the system I use requires only one winning trade out of 20 trades to be profitable.The maximum average loosing sequence on my systems is 12 losing trades.

That is one way of being consistently and highly profitable .

 

[oildaytrader]

Has anyone traded a ranging, direction less,choppy markets with fast volatility breakouts for a period of 6 months to three years?Indicators then become your worst enemy,telling lie after lie.My guess is at the end of 6 months of such conditions, the trader's trading spirits will have gone and the indicators will be binned.How can anybody go through 6 months of sitting in front of a screen without a reward.Even your dog would get frustrated.

 

[oildaytrader]

After 6 months of being disillusioned by indicators telling lies in bad market conditions, You will cut you're losses before they become gains. You will hold on to your gains until they become losses.

And then, after you've learned the folly of those things, you will do just the opposite. You will cut your gains short for fear that they will become losses,just cause the indicator been telling lies for months. You will hold on to your losses in hopes that they will become gains, only cause the indicator lies.

 

[dcraig1]

I gotta say, I find these "discussions" about "indicators" really tedious and the conclusion that trading decisions should only be based on staring at a candestick or OHLC bar chart a bit daft.

What are these indicators to which you all are referring: oscillators. MAs, S/R levels of various sorts. But that is surely not the end of the story - at least in the case of equity markets and their associated futures markets. What about order flow? Is that an indicator? It is certainly possible to turn some measures of it into a time series and plot them. I have posted charts of this sort of thing several times in the past.

How about the case of a stock trader (any time frame) who has one eye on the relevant futures contract or index. Perhaps many sector/industry indices? Are they indicators?

How about market internals/breadth eg $TICK. In fact there is any number of market internals "indicators" that might be constructed. As they are derived from different data sets than price time series (unlike an oscillator) there is clearly some potential benefit.

It strikes me that these discussions are all about trading spot fx and trying to turn a necessity into a virtue.

 

[dcraig1]

Incidentally I, recall reading an interview with Paul Rotter where he replied to a question of what tools he used. The answer: CCI, OBV and the order book.

 

[Bloodhound]

I gotta say, I find these "discussions" about "indicators" really tedious and the conclusion that trading decisions should only be based on staring at a candestick or OHLC bar chart a bit daft.

I tend to agree with you dcraig. Surely it's just about finding a way of consistently profiting? Horses for courses and all that. I started out with indies and have gradually moved to a point now where I just look at bunched up grey lines on a chart coupled with support and resistance but, as GJ pointed out, is that even 'naked' in the eyes of a 1930's tape reader? There does seem to be this almost 'snobbery' about 'trading naked' which I'm not sure I totally agree with. I trade the way I do because it's what works for me but I also have full respect for someone using indies - after it's not about what others think but about one's own personal bank balance - surely that's the only vindication one way or the other?

 

[Lord Flasheart]

Rossini

You missunderstand me, I was not asking for help in any way. I was pointing out that most people start with a basic chart and no indicators and then end up with a chart much the same. The last chance saloon was implying after after doing that you have no where to go.

 

[blancspa]

well if you dont believe its gonna work its never gonna work right?

 

[Rossini]

Progressive betting is when traders increase lot size after every loss .They expect to recover the losses with the increased lot size,they keep increasing the lot size until they win and recover all previous losses.

Sophisticated betting system combining negative and positive progression will work in trading .

A simple example is increasing lot size by 50% after every losing trade.

O D T

While I don't doubt that this idea can have some merit in trading would the reverse be true? Obviously it depends on what system you are trading but would halving the position size after every loss produce the opposite results for you?



While back testing various systems I have have noticed that the losses are not distributed evenly, i.e. they tend to be grouped together. This is obviously because as you have said, when the market is ranging and if the indicators lag too much you will be buying the highs and selling the lows. If the losses of any trading system are not even in distribution then it would make sense to explore the possibility of decreasing position size after losses and not increasing? What are your thoughts regarding systems that you have produced?

 

[oildaytrader]

I am very happy with the systems I have developed.

When there are bad market conditions ,there is often one very good day of profits and trends which helps recovery of all previous losses.

If trader was to halve his bet ,he would miss that opportunity partly.It may work on non betting systems , but not on my systems.

I will open a thread on progressive betting in due course.

 

[Paul71]

I tend to agree with you dcraig. Surely it's just about finding a way of consistently profiting? Horses for courses and all that. I started out with indies and have gradually moved to a point now where I just look at bunched up grey lines on a chart coupled with support and resistance but, as GJ pointed out, is that even 'naked' in the eyes of a 1930's tape reader? There does seem to be this almost 'snobbery' about 'trading naked' which I'm not sure I totally agree with. I trade the way I do because it's what works for me but I also have full respect for someone using indies - after it's not about what others think but about one's own personal bank balance - surely that's the only vindication one way or the other?

There are always going to be 'elitists' that theorise about trading perfection, they never seem to be able to deliver in practical terms though.

 

[oildaytrader]

While I don't doubt that this idea can have some merit in trading would the reverse be true?

No.

http://www.investopedia.com/terms/p/pyramiding.asp

I do not believe pyramiding will work in bad choppy markets, its just a theory but in practise it would chop traders out of profitable positions into losing trades.

In trending markets without retracements , it will work fine.Markets trend 20 % of the time , so make money 20 % of the time but get ph***ed up 80 % of the time.

 

[Lord Flasheart]

What type of market it is shouldnt affect a staking plan unless you are guessing or just increasing on losing positions. If you are a good trader and trade according to what you know then increasing your stakes after losing trades will enhance your profits. I try and avoid this as it plays hell with my emotions,but I certainly increase on certain trades I am confident about.

 

[oildaytrader]

What type of market it is shouldnt affect a staking plan unless you are guessing or just increasing on losing positions.

When entering trends trader has no knowledge if the trend is fizzling out,reversing.In theory everybody knows the trend is going to continue forever, until the sudden reversal,end or retracement and continuation.

In bad markets every time a trend is entered , it immediately fizzles out,retraces to stop and breaks down.

It affects a stacking plan.If pyramiding trend is entered ,subsequent positions are entered only to find reversals or retracements.

ODT