A message to some day traders.

[Amahrix]

Is there a point you are attempting to make by pulling a quote out of your Nasim's arse?

You mentioned you apply probability to events. (Unless you can clarify further), this means you associate odds to an event. We cannot find the odds like we do on a roulette table. This is what the quote highlighted.

I recommend not committing any more Ad Hominem Fallacies going forward.

 

[Amahrix]

Morning Amahrix,

You ask me do I think my trading was luck in another thread. I answered here, and I have not received any comments from you yet.

I mean, I understand the book fooled my random markets, but man, we don't have time for all that reading book stuff, money still have to be made daily trading. If the markets is fooled by random, oh well, it is what it is. I been fooled by women too, but I still have to play with them and get it.

https://www.elitetrader.com/et/thre...echnical-analysis.336198/page-11#post-4932177

I am the first to be a proponent of keeping things simple, but your view of trading is too over simplistic. Here is your answer, it was 99.99% luck.

Did you know that I can have a 90% win rate for 3 years and it can still be a result of sheer luck. It certainly gives the illusion that it isn't, but it is. Assuming your enduring the risk of ruin during that time period.

I can clarify further upon request.

 

[Amahrix]

What is truly arrogant is to deny the fact that random systems are constantly being explored in our world with mathematical and statistical models

Did I ever deny that a random system is not being constantly explored in our world with mathematical and statistical models?

Traders, like meteorologists, operate in a world of probabilities. We can explore the likely behavior of random systems under different conditions.

Did I say we don't operate in a world of probabilities.

We can induce the likely behavior of random system under different conditions, but there are conditions and circumstances that will pop up that no human thought were possible. Especially in the markets.

The point is if your strategy is built around inductive reasoning, you're 100% set to fail over the long term. No question. A lot of strategies are built around only this type of thinking. This is why practically all day trading TA-using players end up in the graveyard.

 

[Amahrix]

Amahrix said:
Ignored and blocked. Reason: time-vampire.

tommcginnis said:
Your premises are demonstrably wrong, your arguments are tautological, your responses are off-point, yet this thread has gone 70-some pages. ........I hope you get the help you deserve.

Tom,
Your characterization of Amahrix is spot on. Other flaws in his thinking: 1) not understanding that a simple binomial test applied to a series of trade outcomes can distinguish between pure luck and trading skill at whatever level of Type I error an investigator chooses. People who trade profitably almost every day generate data that, when analyzed by a binomial test, determine that the probability of their success being due to luck was 1/(many thousands);
2) at points in this thread his statements appear to show that he believes that daytrading is defined not by being flat overnight, but rather by looking only at sub-daily price action. He referred repeatedly to making a decision to be short last Friday from a 30-minute chart.

Nothing he said is an improvement on the concepts of money management, i.e., bet sizing, which have been researched quantitatively by John Kelly, Ralph Vince and others.

The odd thing is why so many, even I who almost never posts, have responded to ravings. Probably our subconscious motivation is the same as that of a person who sees someone choking on food or having an epileptic attack. In this case however, help is not deserved in my opinion.

Jayboy, did you know that you can have a 90% win rate, say over 3 years, and it can easily be attributed to 99.9% luck?

If the strategy entails risk of ruin, or if the strategy has a statistical expectation that is negative over the long term, all gains realized is precisely a result of luck. Because law of large numbers is your enemy, not your friend. Therefore, the more you trade, the more likely your expected to hit ruin as time passes. Enjoy those gains; think of it as a loan from Mr. Market that will be called back plus interest, and penalties for your arrogance.

As far as Kelly goes, guy is a genius. & I know exactly what day trading is. In fact, I trade daily but don't day trade(in the traditional sense) ;p.

 

[Amahrix]

Point is there are many more Turkeys than Butchers

The market is the turkey.

The butcher is reality.

If you want to survive inside the market, you need to take prudent measures to not be caught in a act of slaughtering by reality.

You need to be suspicious of your knowledge, suspicious of your tools, suspicious of everything. One needs to be paranoid.

You need to not only rely on inductive reasoning. (Unlike traditional day traders).

Gains made in market under the exposure to ruin is a result of luck.

Gains made on a strategy that has a statistical expectation that is negative is a result of pure, sheer luck.

Day traders take their TA tools tooo seriously.

Day traders lose and blame markets not their tools. And they rinse and repeat until they're depleted of all cash.

 

[SunTrader]

You mentioned you apply probability to events. (Unless you can clarify further), this means you associate odds to an event. We cannot find the odds like we do on a roulette table. This is what the quote highlighted.

I recommend not committing any more Ad Hominem Fallacies going forward.

Probability yes or no. Not the odds of which.

I recommend you read something besides Taleb. Coming up with fallacies, Ad Hominem or otherwise, when there are none.

 

[Amahrix]

Probability yes or no. Not the odds of which.

I recommend you read something besides Taleb. Coming up with fallacies, Ad Hominem or otherwise, when there are none.

Please give an example.

What about an event you're not expecting, what do you do about that whilst your exposed inside of a trade?

Nevertheless, please give an example.

 

[Amahrix]

I recommend you read something besides Taleb.

I recommend you attack my points with some empirical evidence instead of being triggered by an author of a quote.

Do note: I am a (skeptical) empiricist.

 

[SunTrader]

Look, look a "Black Swan" event dayssssssssssss after the top - which EW and fib time/price pointed to and after 3 major support levels were broken:

 

[Amahrix]

Look, look a "Black Swan" event dayssssssssssss after the top - which EW and fib time/price pointed to and after 3 major support levels were broken:
View attachment 209885

Oh nice, that's why your tool is 100% accurate and you have a 100% prediction rate with it right? How're you not a multi-billionaire already.

Filled with Fallacious argument. Fool.

Hindsight bias, also known as the knew-it-all-along phenomenon or creeping determinism,refers to the common tendency for people to perceive events that have already occurred as having been more predictable than they actually were before the events took place.

Your post is meaningless , in fact, it only strengthens my point. Your tool is so reliable, wow....!!! That's why you have better returns than Medallion Fund.

Give me a real life "successful" example of how you use probability in calculating yes/no events in the marketplace, i'm waiting.