A message to some day traders.

[Amahrix]

All money made under the possibility risk of ruin(ruin doesn't mean zero) is due to chance. Remember, picking up nickels in front of a steamroller. You can bet more prudently by hedging risk of ruin before engaging and this removes gambling component of trading.

Otherwise it is a game of chance.

Ruin is different for different people and their strategies(doesn't need to be 2008).

Also negative statistical expectation can be substituted for "ruin".

If you have negative long term statistical expectation (win rate x payoff over large frequency is zero or negative), all your gains are considered a result of luck, because you're doomed to fail.

A lot of daytrading strats have negative statistical expectation over long run, especially one that trade 5-10 minutes, a lot of them hit a unexpected jolt a few times here and there, over and over and over again over large frequency and payoff doesn't compensate thus negative statistical expectation... the wins are a result of chance but you're doomed to fail regardless.

Luck has a major role in these type of things.

Again, hedging risk of ruin removes the gambling component of trading, then its up to your skills and still some serendipitous luck, to make profit.

 

[Amahrix]

You can save yourself a lot of trouble if you put aside your disgust in me and pick up what I am saying.

 

[Overnight]

Idiot, did the pattern leading up to the subsequent demise of this chart embed the information of such subsequent demise?

...

I think the chart you keep posting there is an unfair example.

XIV was just weird, from my basic understanding of it. So you long an ETN that thinks volatility is going to keep dropping towards zero...But have a rider that if volatility spikes north, and the fund loses 95% of it's value, it shuts down and everyone is ferklempt? If the XIV were still open today, where would it be? *shrugs*

Use a more moderate example maybe?

XIV was as weird as liquid hot MAG-MA.

 

[Amahrix]

I think the chart you keep posting there is an unfair example.

XIV was just weird, from my basic understanding of it. So you long an ETN that thinks volatility is going to keep dropping towards zero...But have a rider that if volatility spikes north, and the fund loses 95% of it's value, it shuts down and everyone is ferklempt? If the XIV were still open today, where would it be? *shrugs*

Use a more moderate example maybe?

XIV was as weird as liquid hot MAG-MA.

You illustrate best when you use the extreme example. Now you want to change the example? Earlier they wanted to redefine technical analysis to remove the word prediction. The example is a real life example. It was "one-time"... no, one day S&P will get destroyed if Govt goes bankrupt. Let's imagine this to be plausible, you can only imagine how lucky we really are...Hedge it, so you don't realize it was luck, in hindsight.

 

[Amahrix]

I believe the last few posts epitomizes the role of chance in the markets. If you do not understand by now... I'll be truly dumbfounded.

 

[Amahrix]

I think the chart you keep posting there is an unfair example.

XIV was just weird, from my basic understanding of it. So you long an ETN that thinks volatility is going to keep dropping towards zero...But have a rider that if volatility spikes north, and the fund loses 95% of it's value, it shuts down and everyone is ferklempt? If the XIV were still open today, where would it be? *shrugs*

Use a more moderate example maybe?

XIV was as weird as liquid hot MAG-MA.

Here is what bankrupt OptionSellers.

Edit: Look at the risk you made me take Overnight... I can smell a couple scrubs about to comment that they predicted this and saw the patterns forming for this to happen. (lol)

 

[Overnight]

...It was "one-time"... no, one day S&P will get destroyed if Govt goes bankrupt. Let's imagine this to be plausible, you can only imagine how lucky we really are...Hedge it, so you don't realize it was luck, in hindsight.

It was "one-time" because Credit Suisse gave it a termination point. The S&P does not have such a rider...

 

[comagnum]

TA tools, does not work over the long term. To those that argue it has for a select few; 1) survivorship bias 2) it can statistically happen due to sheer luck

Than explain the billionaire technical traders and the many that have made a living at it for decades? Granted it requires a great deal of hard won skills to execute & strong risk/trade mgmt and most noobs what they call TA I can not relate to - at all.

It really rather simple - periods of price constriction show a consensus of wagers being made - when those traders are proven wrong there is a mass exit. This can spark a very strong price moves for days to months.

Bitcoin longs throwing in the towel when the massive descending triangle was finally resolved to the down side. This sparked a parabolic move on the day & could have a lot further to go.

Bruce Kovner - former Taxi driver made over $5B
I’m not sure one can really define why some traders make it, while others do not. For myself, I can think of two important elements. First, I have the ability to imagine configurations of the world different from today and really believe it can happen. I can imagine that soybean prices can double or that the dollar can fall to 100 yen. Second, I stay rational and disciplined under pressure.
What I am really looking for is a consensus the market is not confirming. I like to know that there are a lot of people who are going to be wrong

For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is — whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge.

Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders may say about the future activity of other traders.
Technical analysis reflects the voice of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual. It is very important for me to study the details of price action to see if I can observe something about how everybody is voting. Studying the charts is absolutely critical and alerts me to existing disequilibrium and potential changes.

 

[Overnight]

Here is what bankrupt OptionSellers.

Edit: Look at the risk you made me take Overnight... I can smell a couple scrubs about to comment that they predicted this and saw the patterns forming for this to happen. (lol)

Yeah, many folks here remember the Options sellers guy's remorseful apology. It was quite pathetic. I am not saying the market does not have random chance...

In fact, what are we discussing? Was it that markets ARE random, or NOT random? Tired, I forget.

Markets seem to be turning north. Take it down 30%

 

[Amahrix]

Than explain the billionaire technical traders and the many that have made a living at it for decades?

Name me a day trading traditional TA-using billionaire. This post is an attack on day traders who use traditional TA tools and close positions same day, in fact they open and close within 5-15-30 minutes.

Your post also reeks with survivorship bias, go look at the graveyard of dead day trading TA users. You have one guy as an example against millions that have tried and failed. Also, I do not know the exact strategy of that individual. If he held longer than a day, used options, etc.