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I read a lot of posts that say the only real way to succeed in trading is by "graduating" beyond FA and TA and using "price action" (PA) only (although, to be clear, price action is defined differently by different traders, but then so are FA and TA). But what kind of evidence is there that...

The same could be said of any methodology. If this is the standard for saying something is BS every single trading system known to mankind is BS and you should only use low-cost index funds and never sell them.

The "law of large numbers" will predict that the indices you're watching will bounce off your trendlines any number of times, given enough opportunities to do so. The trading problem is whether or not those bounces are sufficient in number to become part of a profitable trading strategy. No one...

Effort is fine, but results are what matter. Again, after having read his posts and seen his charts relating to his methods, I don't see anything that differentiates his approach to the market and it's all just random lines, entries and exits. He's just throwing money in to the market without...

Nothing you post indicates any reasoned view of markets and how they fluctuate, which is a prerequisite for rational trading, since traders make money precisely from price fluctuations. You are just throwing money into a flaming pit and if you continue to trade, you will ultimately end up with...

Maybe it does end up being psychological for some of these traders. The only way to really know is to compare what their results would have been had they stuck to their discipline vs. what they actually achieved, since it could be that even if they had followed their strategy, the strategy had...

But did their strategy cease to work or did they cease to follow its rules? If it kept working, presumably they could have come back and recouped their losses, after their period of psychological distress passed. Also, as the saying goes, "the market will still be there tomorrow". You have to...

I would say it boils down to essentially the same things, either their strategy doesn't actually work or they are overbetting on a winning strategy, causing larger drawdowns than they can withstand, which breaks their discipline. I also think that ego plays a larger part in discretionary...

That's because the psychological difficulties of day trading are caused by not having a robust strategy with which to trade, leading to negative expectancy trading over time and the overwhelming temptation to "break the rules" in the hope of gaining back some of one's losses or having a robust...

Exactly. In game theory, it's called your "dominant strategy", i.e. the strategy you will follow regardless of what the other players are doing.

This question seems to undermine your initial premise that HFT has some impact on market action that didn't exist in the days before HFT. Price still sometimes moved from point a to point b in 2 minutes instead of 10 before HFT and it does so now that HFT is the majority of the market. There...

You probably won't be surprised that I'm not going to give away any details, but I only use 1 strategy and it encompasses all possible market movements, so that I always know exactly what price to buy at, sell short at, exit or re-enter. I have never seen a chart which didn't exhibit the...

They won't, of course. The only real debate is: 1. What requirements MUST be met for something to be considered "endemic to basic market structure"? 2. How many methodologies meet those requirements? I think I have a good grasp on the first one, but no idea of the second one. But, in my...

Markets don't change because of "black swans". If anything, "black swans" are "the exception that proves the rule". "Black swans" are best dealt with via robust money management rules, not strategy. And if a "black swan" came along which flipped the strategy directly on its head, so? If...

[/B] I'd actually flip the ratio to say that success is 90% strategy development and 10% "psychology" by which I mean following the rules of the strategy to the letter and resisting the urge to scrap it once you have a bad streak, which is going to happen. So, the 90% of your time should...

I'm pretty sure that the optimal f calculation assumes that your worst loss is still in the future, using that information to determine bet size between now and the occurrence of that loss to reduce risk of ruin or maximum drawdown. To the OP, if you are just going through a phase where the...

Actually that Kelly formula is correct for a two-outcome situation so, yes, you are maximizing your potential gain with a 70% bet. But, as was pointed out, the chances of you actually having and knowing with certainty that you have a 75% chance of winning with a 5:1 payout are very slim in the...

I don't know what version of Kelly you're using but here's what mine says: (.75*(5) + .25*(-1))/(.75*(25) + .25*(1)) = .1842 ~ 18% Round down to 10% or 15% for a margin of safety and that's a far cry from 70%+. [/B] I'm pretty sure that Kelly is: %Win - ((1-%Win)/(W/L Ratio))...

Yes, this is why I think that the only constructive way to conceptualize risk is "risk of ruin". Thinking of risk in terms of "drawdown" will stop you from risking the optimal amount based on your strategy's historical performance. This is also why I think you should only trade with money you...

It is a property of Kelly betting that it's only virtually guaranteed to be optimal at "terminal wealth", but may be suboptimal at any specific step along the way. Over 500 trades, Kelly is the way to go. Over 5 trades, who knows? There is a good paper on Thorp's website which shows this in...