Making a more scientific trading strategy

[Pat494]

TYP seems to be flogging stuff based on Excel along with Barry Burns etc.

 

[DionysusToast]

TYP seems to be flogging stuff based on Excel along with Barry Burns etc.

Barry Burns? Is that some sort of medical complaint?

 

[TakeYourProfits]

Caught up with that guy again and
It seems that I got that formula as it happens from a top nuclear scientist. The fact is, that it's something to do with nuclear fusion inside the sun. A tad beyond elementary school - you'll probably agree ! Probably not much use for trading maybe but definately a formula !

:smart

yeah again, another topic for another forum... im a trader, not a nuclear scientist, or journalist... im just concerned with making money, so really i have no answer for any comment outside the scope of the issues revolving around making money...

 

[TakeYourProfits]

This shows a massive misunderstanding of the markets. CNBC may well assign cause to a move but it is generally nonsense.


If you treat the markets a bit more like the supermarket, you'll find there are times when you know where the markets going to go because you know why.

i dont make it a habit of professing to know the future, i make it a habit of knowing that all i have to do is manage, or eliminate the risk of any given trade when i can... that is my job as a trader... not pretending i have a magic 8-ball...

ive come to the conclusion by the responses on this thread, that 98% of the people talking all of the nonsense on here are not profitable traders... if you let your ego get in the way of your trading by letting yourself believe that you know what the market is going to do, then you will lead yourself down a path of psychological disappointment... and consistent losses

the only people you have to understand in the market is yourself and how you can adjust your mental state to the ever increasing speed of information in which the market operates on...

The crucial variable is the speed at which you yourself can process the information being displayed by the market at any given time... a guy by the name of col boyd said that... you should look him up and a concept on the web called trading as mental warfare written by a guy name brett steenbarger... hes got another free psychological resource on the web... check him out...

my tools help me to gain an edge by staying in sync with the markets speed of information providing... thats it... i cant pretend to know the future. im not god, im just human, i make do with the limitations i have and i go from there.... mathematically

 

[TakeYourProfits]

TYP seems to be flogging stuff based on Excel along with Barry Burns etc.

i dont know barry burns nor am i in the business to educate people...

im in the business of trading and making money and sharing my experiences.... i know, its hard to see other people who are successful at the things you yourself wish you can do... unfortunately that is not possible if you can only view the world through your distorted and bitter perspective...

im sorry if you have been scammed in the past... again, maybe you should be more vigilant about who you yourself decide to do business with and what trades you actually do take... it makes a big difference if you think it out before making an impulse transaction!

dont be a hater either as you yourself are probably on here trying to find a way to attract people to your own websites so you can charge them thousands of dollars for what i am giving away for free...

i know your kind... go back to hustling old ladies for their social security checks, and leave this forum to people who have an interest in actually learning what needs to be done to be a consistently profitable trader instead of filling it up with your hocus pocus... have a nice day. i will no longer respond to either of your comments... good luck with your "strategies"

:clap:

 

[DionysusToast]

i

ive come to the conclusion by the responses on this thread, that 98% of the people talking all of the nonsense on here are not profitable traders... if you let your ego get in the way of your trading by letting yourself believe that you know what the market is going to do, then you will lead yourself down a path of psychological disappointment... and consistent losses

Well - considering what you've told us about your math based trading methods, it's hardly a shock that you are coming to the wrong conclusion.

Seriously though - some very relevant points have been made. You should at least tackle the points.

 

[DionysusToast]

i know your kind... go back to hustling old ladies for their social security checks, and leave this forum

You know what - that track isn't going to get you very far here.

 

[Pat494]

I've got TYP on ignore - one should only put up with so much cr*p from 1 person !

 

[TakeYourProfits]

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcomin*g, but who knows the great enthusiasm*s, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievemen*t, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." - Theodore Roosevelt

 

[Pat494]

This thread had some interesting posts before nitwit joined in with a plethora of insults

 

[TakeYourProfits]

Another way of looking at it.

You have 5000 people in a shopping mall. Can you mathematically model a system that will predict where each person will be in 10 minutes time?

Think about it.

I can accurately make the prediction for all 5000 - with about 95% accuracy, it just doesn't require math.

its not about calculating where everybody will be in 10 minutes time, thats like trying to predict the future which is impossible... your job is to minimize the risk of a bad decision by reducing your risk as your strategy is slowly revealed by the 5,000 participants in your mall example, to be working or not...

the only way to consistently measure you strategy is by using a mathematically objective model... youre job is not to have a 100% winning percentage... its to hold your winners longer and cut your losers shorter... because no matter what system you trade, you are going to be hard pressed to find anything trade-able that gives you better than a 60% win%, but that is the old cliche isnt it? the only way to get it out of cliche status is to mathematically define it...

look up the concept of an R-Multiple by a guy named van k tharp...

Actionable ideas thats it...

 

[Jerry Westerby]

typ has obviously read alot of pop-psych-trading-books. good for him.

p.s. you can go broke taking profits. just fyi.

 

[TakeYourProfits]

This thread had some interesting posts before nitwit joined in with a plethora of insults

you're right!! & if you look through the post history here you will find the nitwit who started with the insults to take this whole topic off track see for yourself:


Originally Posted by DionysusToast

And your approach is "if you can't blind them with science (as you clearly can't), then baffle 'em with bu11sh1t" ?

Jeeezzzzz....

I hate to break it to you - but you are REALLY going to need to dumb that down

 

[numbertea]

Science or Art? For myself it is art to find the patterns that might yield good trades, it is science to verify that it happens. It is an art to be able to take a theory and turn it into a mathematical model that you can then prove or disprove with science. There are tons of different ways to decide what and when and how to trade. Finding the right combination could be thought of as an art.

I listened to your video TYP and was pleasantly surprised. It was for me the fact that you suggest an overall framework of development based on the scientific method that causes me to commend you on your work and post. I trade in a very different way than you but I document absolutely everything I do or change in my system and realize that without full disclosure of what one's reason for trade position is to one's self, there can be no further positive development of the trading plan.

 

[TakeYourProfits]

typ has obviously read alot of pop-psych-trading-books. good for him.

p.s. you can go broke taking profits. just fyi.

but you can't go broke managing risk effectively using objectively defined trading rules based in mathematics...

so long as you have the discipline to consistently obey those rules that is... thats the only key you really have to have: DISCIPLINE

the only way youre account will go to zero is if you refuse to obey your stops... ive lost 65 trades this year trading the forex market for example... and i didnt go broke... i turned around a 200% forex gain (my total portfolio gain across all markets is 60% ytd) on less than 50 wins... why? because I took profits on more trades that had 400 pip winners, while i kept my losses under 50 pip losers... trade management, risk management, money management... math can define all three so that you can execute your plan consistently every time...

how can you have a winning strategy if you approach the market a different way every time you take a trade? you would never be able to figure out what you're doing wrong or what you're doing right because it's all different... please tell me that makes sense to you.... and i mean that in the nicest possible way...

and you're right... psychology is key...!!! what i do in the market has everything to do with what I & I ALONE PERSONALLY DECIDE TO DO... so therefore, a deep and fundamental understanding of my own psychological decisions making processes are imperative to the success of my business... because at the end of the day, if i came on this forum and i blamed my losses on how you traded the market against me, you would laugh at my ridiculous notion that has no place in a trading forum where traders want to maintain consistent profitability...

as you can see i do everything i can to internalize every piece of literature i read in order to better educate myself... one of those tools i use is to verbalize the very lessons that i have learned, in detail, in order to share as much of it with the general trading public... obviously this is a selfish habit, as I only share my knowledge for my own selfish reason to make efficient psychological use of my own internal dialogue... but lets just say that in the end, i hope that this will eventually help just 1 person willing to see beyond the "fog"...

but as you can see, if your not charging $3,000 for information, people dont take it seriously... something about psychology...

i challenge you to try to verbalize some of your own knowledge rather than pointing out the fact that I've read a few books, as it is obviously apparent that I have...(again, i mean that in the nicest possible way because i really do believe in the exercise)... its like they say: people learn by listening, by writing, & by doing.... so why not use all three methods to help yourself achieve more effectively, against seasoned professionals, in an industry with absolutely no existing barriers for entry other than the fact that you have to deposit money with a broker???

I believe that if you make a serious effort at verbalizing the knowledge that you hold in your head, to teach others without question and without fee, then you will find the experience rewarding and beneficial to your own business...

the sad fact is that nobody does that... and the people that charge you for their mentoring services will use this forum to attack my concepts because they themselves are the one using underhanded psychological tactics, like going into a newbie forum pretending to help newbies, with the sole intention to help them part ways with their money... this is an online marketing fact... so beware...

dont believe me...? the shysters in question have already used my blog as a way to inform me that my "knowledge sharing" idea is actually bothering a lot of these "social security check" thieves... dont take my word for it, do a google search for the following terms & see it for yourself:

takeyourprofits.com people normally pay me for this and you are giving it away

you'll find it under the comments in a video blog i posted for my Trade No.86 - Post Trade Review

just, fyi...

good luck with your trading, i really do wish you the best...

My message for this forum is to develop an Objective trading approach defined by mathematics, to ensure that you will engage the market in a consistent fashion, every time you execute a trade. This is the only way to stop the losses, so that you too can TakeYourProfits...

 

[TakeYourProfits]

Science or Art? For myself it is art to find the patterns that might yield good trades, it is science to verify that it happens. It is an art to be able to take a theory and turn it into a mathematical model that you can then prove or disprove with science. There are tons of different ways to decide what and when and how to trade. Finding the right combination could be thought of as an art.

I listened to your video TYP and was pleasantly surprised. It was for me the fact that you suggest an overall framework of development based on the scientific method that causes me to commend you on your work and post. I trade in a very different way than you but I document absolutely everything I do or change in my system and realize that without full disclosure of what one's reason for trade position is to one's self, there can be no further positive development of the trading plan.

i love you numbertea! thank you for the feedback... please let me know if there are any other videos or topics you would like to see discussed as it will also serve to help me tremendously...

It is you who must be commended for being able to objectively accept the ideas I have been trying to pass along to the group... like i said in another post, if you are the only one i reach, then i am 100% satisfied...

thanks again, and only if youre interested, Id like to invite you to join the TradeSocial Network ive turned the site into, as a way to work different ideas together so that we can push the envelope of profitability together, as a team... but only if you want to as I know that in many cases a lone wolf philosophy is better for a trader...

i dont think everyone has to trade the same strategy to be successful... i really like what you said about differing trading philosophies... the important this is to objectively measure yourself before during and after every trade... its the only way to know if what youre doing works...

youre a smarter person than i am... i cant get an idea across in one paragraph...

thanks again, your feedback is so very much appreciated!!! Good Luck to you

I also have to agree with you.. it can be proven scientifically, however, the act of participation is inherently, very artistic... as traders, we express our emotions to the world... financially

i say any form of expression can very much be construed as art... you actually just helped me to realize that. thank you for the lesson friend

 

[numbertea]

Smarter, maybe not. Definitely I'm a slower typist.

 

[DionysusToast]

its not about calculating where everybody will be in 10 minutes time, thats like trying to predict the future which is impossible...

Any trading method where you trade outright directional positions IS an attempt to predict future price movements. You do not go long if you expect price to go down. Even if you say "I'm going long because there is less risk to the downside", you have still made a directional prediction.

Now - this is never going to be 100% reliable but it is of course possible because of "cause & effect".

If you base all of your studies on financial time series data, then you are analysing effect only. You can do this for years and years and it will never make any sense, you will never be able to predict because you never consider 'cause'.

Look at John Ehlers work - very, very clever guy but no-one ever made any money from his DSP theories (apart from Johns book sales). He also, was totally focused on trying to make sense out of studying effect and not cause.

 

[numbertea]

DionysusToast, I'm wondering if I am misinterpreting this lack of cause and only study of effect. The type of trading technical analysis involving fibonacci sequences that TYP mentions is all about cause... It is analysis based on market psychology, specifically, the reasons why market patterns repeat themselves is because of the psychological drive of the traders who move the markets, ie price action. The fact that price action sequences repeat in certain patterns allows the possibility to gauge the probability of a future repeat of price action when a "cause" is found. Hopefully one can make money when the precursor to the effect is found on the chart.

I am wrong here?

 

[DionysusToast]

cum hoc ergo propter hoc

Or

A occured after B, therefore B caused A.

This is a fallacy. C or D could have just as easily caused A. C and D might not be a pattern or even present on the time-series.

Fibs are a good example of ascribing cause. If you draw fibonacci extensions & retracements, allow a few percentage tolerance on either side, then you WILL absolutely see price react at these levels.

On the flip side, if you calculate how much of the price range you have covered by the tolerance around your fibs, then you may just find that it was statistically unlikely for price not to react on one of the areas.

You can draw random horizontal lines on a chart and price will appear to react in those areas. These are not cause either.

Yesterday, I was short the ES from about 1253, price moved down to 1250 and then at 8:37 some idiot in Germany said something about Europe and before I could react price shot up and clipped me out. After this, the price moved sideways for what felt like an eternity. The reason for that sideways move was obvious - even if you hadn't heard the news - no-one wanted to pick a side. That sudden 27 tick spike up spooked people. Who wants to be on the wrong side of one of those? Everyone was waiting for everyone else to react. I knew the cause of that choppy action, I knew also that once people committed to one side, other people would too and we'd have an actionable move.

Later on, we did see people piling onto one side and the market and some opportunities came up.

The past few weeks we have had the same thing - news about Europe - it's either falling apart or going to be fine - take your pick - a different announcement every 10 minutes on some days.

This is a cause, I am not a fundamental trader and I do not trade the news but I do listen to it because it throws the market offside and helps to warn you off.

Any mathematical analysis of the past few weeks on the ES will be totally useless in absence of the time of the news which effectively changed the decisions of perfectly happy little traders.

In the absence of all this news nonsense, it comes down to a bunch of people trying to trade in the direction they think will make the most profit. That is the real cause. Instead of trying to model this mathematically, it is much better to study game theory as people do tend to react in a similar manner over & over again.

Use math, and all of those spots where C, D, E or F caused the move will be totally hidden from you.