Search results

I read a comment on here recently where someone was arguing that "strong hands" don't trade algorithmically. The comment was made in the context of directional trading, so I'll keep my discussion limited to that realm, although there is probably a whole other realm of non-directional...

My point about methods may SOUND ridiculous in theory, but go back and read Market Wizards and tell me again how many of the people Schwager interviewed used the exact same methodology or even variants of the same methodology. I'll save you the time and just tell you the answer: Very few. From...

While true, I think this is more about the use of a portfolio of strategies across timeframes than a single strategy. Not to try to limit the thread to one topic, but it's the single strategy approach which I was addressing. I read a paper that showed the distribution of profitable short-term...

I think that there is also an implicit statement in the guy who is not using a stops decision to do so, and I've brought it up a couple of times and no one has responded, and that is an implicit statement about time. The trader not using a stop is assuming that the opportunity cost of capital...

My response came across wrong. I was agreeing with you but making the point that the posters who are allegedly trading without stops are the ones who are "paper-trading tigers", so they simply assume infinite capital and time into existence so they can be right, eventually, on every trade.

"Hedges" are illogical. Why would you incur additional commission costs to protect yourself from just taking a loss on your original trade, which you may end up having to take anyway? You might as well set your money on fire. Can one of you "no stops" people can name ONE well-known trader who...

I guess when you are a paper-trading tiger, stops don't matter because it's all just "play money". If I had infinite capital and patience, I'd never use a stop either. Meanwhile, in the real world of limited capital and time, stops are useful. As I said, a few people on this board do actually...

And we return back to the beginning, which is kind of always the way these "my method is better than your method" threads work, where no one learns anything, but people sure do spend a hell of a lot of time on their virtual soapboxes. No method, in and of itself, puts you at an advantage or...

See, you assume the 10 points was a random price level. Wrong. It was just an example. One day it's 10 points. The next day it could be 5.25 points. The next day it could be 13.75 points. The next day it could be 8 points. It depends on what the market is doing. Same for exits. It will depend...

Which is one reason why figuring out how to identify "false positive" trade signals can be a goldmine. Keeping yourself out of bad trades is just as good as making a good trade, especially when the bad trade looks so much like a good one before you enter. This month alone, by identifying a...

Out of 500 systems with 30% win ratios, the few that survive will have ratios along those lines. The rest will be discarded, as any "unfit" organism would be in this Darwinian world. By default, the survivors will have excellent win-loss ratios. As for how you would "know" in advance that "a...

If you are trading directionally, I would submit that the best way to make money is to understand the topping and bottoming PROCESSES the market goes through on the timeframe of relevance to you and trade according to the logic of those processes. Your trading will always be somewhat contrarian...

Win rate is only one part of the profit equation for a trading method. The other part is the ratio of the size of winners to the size of losers. With a 4-1 winner to loser size ratio, 30% win rates are completely viable and so the systems with 30% win rates will typically have ratios like that...

No, the system includes stops so being stopped out is part of it. Also, since you don't know where the market is going to stop moving against your trade position you got stopped out of, saying that I got my ass handed to me is unsound reasoning. Let's say I'm in an ES position at 1300 with a 10...

It is kind of odd that the implicit statement in the example about the fund manager placing a large order is that your method won't work because it can lead to losing trades deriving from unforeseen circumstances. In fact, it seems that the person making that argument is using that standard as...

Stops don't have anything to do with leverage in any number of cases. They are simply points at which your hypothesis about the market is more likely to be wrong than right or the point at which locking in a profit is sound logically. There are some people on this board who do sound like they...

One last point on this "reaction low/high" stuff. My experience has been that that kind of stop gaming is far more likely to happen during an uptrend than a downtrend. As a result, I've developed a trailing stop method that differs for long trades from what I do for short trades. Using this...

I don't trade the Dow, but the ES and the only real activity after hours is when the various Asian and the India markets open, but only if there is significant news coming out of those markets, then a complete lull after India's open until the German and UK markets open. A "big" move during...

I don't look at timeframes but I do look at time and what I know is that if I know how long a specific price move takes, I can tell if it is significant or not. The amount of volume that occurs during that time may be significant as well, but I can get around 60% accuracy just using time, so...

Ah, but notice I said "my stop" not "a previous reaction low/high". Trust me, the two are never the same. There isn't a trader alive who could game my initial stop. It would be like trying to guess a 128-bit encrypted password with a cereal box decoder ring. Now, the stops where I'm locking...