The "pros" and the "cons"

[barjon]

I've been trading pretty much the same set up for over 30 years, but the way I trade it is much different today with a far higher discretionary element. More successful? Well, I like to think so

Seems to me it is very rare to take on a trade that has (or appears to have) everything going for it and nothing against it and it's invariably a question of "pros" and "cons".

One camp would say that your statistically proven set-up should be traded regardless whenever it triggers (the "edge" is in the set-up). The other camp would say that the set-up is only informative and that the pros and cons should be weighed to decide on a trade (the "edge" is in the judgement).

I've moved increasingly from the first camp to the second and I wonder where others sit.

 

[The Leopard]

It probably doesn't matter. Although if I had to guess I suspect must people would be better off just following it as mechanically as possible.

 

[bbmac]

Hi Jon,

Interesting point.

I suspect the clue to your statement is in your having 30 years of experience in trading that set-up such that you have developed a 6th sense/instinct (for want of a better term) as to when it has the highest probability of a successful outcome over just trading the set-up each time it develops on your instrument (s) and t/f (s) of choice. Experience can give you this and although you may not even know it there are probably other 'conditions' that are more common than not when the set-up does experience a winning outcome over a losing outcome.

My experience, although shorter in years is much the same as yours. I have developed a rule set based on a large historical sample of when the set-up (or set-up ) develop based on the common wider 'conditions' they develop in when they do succeed over fail. Ie I tried to pinpoint whether there was more to this 6th sense/intuition of when to trade the set-up (s) and when not to...and sure enough there was...In trading the set-ups (s) I traded as opposed to each time it/they developed - I had obviously remembered the 'optimum' wider conditions that they developed in when they did produce more winning outcomes over when they did not. Put another way - Having done this analysis -I don't just trade the set-up (s) because they develop/because they are there - they have to be in the most optimum wider conditions now. A simple/good example of this is some one trying to trade every bit of bullish divergence that develops in a downtrend - they're likely gonna get killed but there are 'optimum' conditions when such bullish divergence has a greater chance of pinpointing a high probability trade-able counter trend opportunity.

Like the poster above, I suspect though that in the hands of the less experienced /in the absence of this 'wider' rule set they are better just trading the set-up (s) as they develop (assuming it/they have a positive expectancy over any given sample to date.)

G/L

 

[Hakuna Matata]

Somatic Markers, innit.

 

[Mr. Charts]

Hi Jon,

Interesting point.

I suspect the clue to your statement is in your having 30 years of experience in trading that set-up such that you have developed a 6th sense/instinct (for want of a better term) as to when it has the highest probability of a successful outcome over just trading the set-up each time it develops on your instrument (s) and t/f (s) of choice. Experience can give you this and although you may not even know it there are probably other 'conditions' that are more common than not when the set-up does experience a winning outcome over a losing outcome.

My experience, although shorter in years is much the same as yours. I have developed a rule set based on a large historical sample of when the set-up (or set-up ) develop based on the common wider 'conditions' they develop in when they do succeed over fail. Ie I tried to pinpoint whether there was more to this 6th sense/intuition of when to trade the set-up (s) and when not to...and sure enough there was...In trading the set-ups (s) I traded as opposed to each time it/they developed - I had obviously remembered the 'optimum' wider conditions that they developed in when they did produce more winning outcomes over when they did not. Put another way - Having done this analysis -I don't just trade the set-up (s) because they develop/because they are there - they have to be in the most optimum wider conditions now. A simple/good example of this is some one trying to trade every bit of bullish divergence that develops in a downtrend - they're likely gonna get killed but there are 'optimum' conditions when such bullish divergence has a greater chance of pinpointing a high probability trade-able counter trend opportunity.

Like the poster above, I suspect though that in the hands of the less experienced /in the absence of this 'wider' rule set they are better just trading the set-up (s) as they develop (assuming it/they have a positive expectancy over any given sample to date.)

G/L

sub-conscious memories and learning and situational awareness

 

[barjon]

Hi Jon,

Interesting point.

I suspect the clue to your statement is in your having 30 years of experience in trading that set-up such that you have developed a 6th sense/instinct (for want of a better term) as to when it has the highest probability of a successful outcome over just trading the set-up each time it develops on your instrument (s) and t/f (s) of choice. Experience can give you this and although you may not even know it there are probably other 'conditions' that are more common than not when the set-up does experience a winning outcome over a losing outcome.

My experience, although shorter in years is much the same as yours. I have developed a rule set based on a large historical sample of when the set-up (or set-up ) develop based on the common wider 'conditions' they develop in when they do succeed over fail. Ie I tried to pinpoint whether there was more to this 6th sense/intuition of when to trade the set-up (s) and when not to...and sure enough there was...In trading the set-ups (s) I traded as opposed to each time it/they developed - I had obviously remembered the 'optimum' wider conditions that they developed in when they did produce more winning outcomes over when they did not. Put another way - Having done this analysis -I don't just trade the set-up (s) because they develop/because they are there - they have to be in the most optimum wider conditions now. A simple/good example of this is some one trying to trade every bit of bullish divergence that develops in a downtrend - they're likely gonna get killed but there are 'optimum' conditions when such bullish divergence has a greater chance of pinpointing a high probability trade-able counter trend opportunity.

Like the poster above, I suspect though that in the hands of the less experienced /in the absence of this 'wider' rule set they are better just trading the set-up (s) as they develop (assuming it/they have a positive expectancy over any given sample to date.)

G/L

Hi Stewart

Yeah, same road

Analysing the the associated "conditions" was a nightmare of record keeping before the advent of PCs - even had to draw your own charts in those days

First job on my brand spanking new EXCEL sheet years ago was to stick in every conceivable "condition" I could think of to determine which, if any, might be particularly significant. Only a few were - don't fight FTSE (I trade FTSE100 equities) a pretty obvious example, or (and this'll have some rolling in the aisles ) double position when the final leg of the set-up is a hammer or shooting star type candle - and they finished up as conditional rules. A lot of others are still in the memory banks, though, and must have a subconscious influence.

The final button presser is momentum. I do want to see a bit of oomph behind the price. I know it when I see it (I like to think ), but I'd be extraordinarily hard pressed to give you a hard and fast objective set of "rules" for it.

Cheers

Jon

 

[bbmac]

In light of your post I guess I should substitute the word ' guidelines ' where I refer to ' rule set ' in my post above as there is mostly always discretion involved - based on what Mr Charts succinctly sums it up as....so in reality so it falls somewhere between rule set and guidelines I guess. Tomado Tomato...guidelines ruleset...set-up/edge - potado/potarto blah blah blah...

G/L

Hi Stewart

Yeah, same road

Analysing the the associated "conditions" was a nightmare of record keeping before the advent of PCs - even had to draw your own charts in those days

First job on my brand spanking new EXCEL sheet years ago was to stick in every conceivable "condition" I could think of to determine which, if any, might be particularly significant. Only a few were - don't fight FTSE (I trade FTSE100 equities) a pretty obvious example, or (and this'll have some rolling in the aisles ) double position when the final leg of the set-up is a hammer or shooting star type candle - and they finished up as conditional rules. A lot of others are still in the memory banks, though, and must have a subconscious influence.

The final button presser is momentum. I do want to see a bit of oomph behind the price. I know it when I see it (I like to think ), but I'd be extraordinarily hard pressed to give you a hard and fast objective set of "rules" for it.

Cheers

Jon

 

[robster970]

sub-conscious memories and learning and situational awareness

Context, context, context.

 

[BSD]

Hey there Barjon, been awhile

Missing a lot of people here, where have they all gone off too.

Anyway, very good to still find you here.

Don't really know the answer the answer to your question.

I do believe in a sixth sense.

But trading wise, I suspect that the sixth sense comes into play more in terms of overall, long term results.

Meaning, if you follow your sixth sense in trading, you'll probably have lower drawdowns.

But, at the expense of lower net returns.

Alternatively, take every signal your system gives, and probably you'll have higher drawdowns, but also a higher net profit.

I remember somebody here linked to some trading simulation I forget the name of.

But what I remeber is that you took part, and made absolute €gazzilions€, more than anybody else, because you said you took every single signal of your system, which you wouldn't have done with your real life account.

 

[barjon]

Hey there Barjon, been awhile

Missing a lot of people here, where have they all gone off too.

Anyway, very good to still find you here.

Don't really know the answer the answer to your question.

I do believe in a sixth sense.

But trading wise, I suspect that the sixth sense comes into play more in terms of overall, long term results.

Meaning, if you follow your sixth sense in trading, you'll probably have lower drawdowns.

But, at the expense of lower net returns.

Alternatively, take every signal your system gives, and probably you'll have higher drawdowns, but also a higher net profit.

I remember somebody here linked to some trading simulation I forget the name of.

But what I remeber is that you took part, and made absolute €gazzilions€, more than anybody else, because you said you took every single signal of your system, which you wouldn't have done with your real life account.

Hi Markus - good to hear from you again

Aye, there's a good few good guys missing. Some pushed, some found pastures new and some still here in disguise.

Yes, I suppose those £gazzillions£ through following every signal through thick and thin gives a bit of a lie to my fond belief that my discretion (sixth sense) does better. Shame you brought it up really

cheers

jon

 

[NVP]

In light of your post I guess I should substitute the word ' guidelines ' where I refer to ' rule set ' in my post above as there is mostly always discretion involved - based on what Mr Charts succinctly sums it up as....so in reality so it falls somewhere between rule set and guidelines I guess. Tomado Tomato...guidelines ruleset...set-up/edge - potado/potarto blah blah blah...

G/L

Whatever happened to BBmac ?

N