Did you miss the part where I said... think abstractly for a second, not literally. A lot of strategies that traders deploy don't see the damn steamroller.(i.e. OptionSellers) They're blind to it. So they think they're just picking up change, almost for free.....
A message to some day traders.
- Thread starter Amahrix
- Start date
Did you miss the part where I said... think abstractly for a second, not literally. A lot of strategies that traders deploy don't see the damn steamroller.(i.e. OptionSellers) They're blind to it. So they think they're just picking up change, almost for free.....
Optionsellers problem was not a steamroller...It was a weird blackswan or other event of that type that caused NG futures to spike very high for a day or three, and then come back down. What steamroller was in that event? Was there anything slow in that move, like a steamroller?
Some of the traders I've seen you debate with in this thread are not just daytraders...they in fact invest as a hedge or they've hedge a daytrade with a swingtrade.
- You're saying these particular traders have removed luck from the daytrading or removed luck from their swingtrade or removed luck from overall a risk of ruin ?
- After they've hedge their risk of ruin (removing bad luck of wiping them out)...you saying the "good luck" that's remaining will be assisting their technical analysis considering they're using technical analysis to get them into the trades in the first place ?
Overnight........... that's the idea behind the analogy.... they were picking up pennies risking dollars; how about that!?! happy??
Also, what's your answer... if someone is risking ruin, and/or trading with negative EV(which is the same as ruin..), are they lucky when they experience gains whilst on their path to financial ruin?
It is a crappy analogy. It should be dropped from the trading lexicon, because I have calculated that you can make $18 per hour picking up pennies in the street. LOL, nevermind all that...
Counter question...
If someone is achieving success, and/or trading with positive EV (which is the same as success), are they unlucky when they experience losses whilst on their path to financial success?
Its seems like you're implying that a trader that's using technical analysis with hedging will outperform a trader that's using technical analysis alone without any hedging.
wrbtrader
No, luck is never removed.
Assuming they've truly hedged out risk of ruin and are in possession of a trading edge (statistically positive EV)... they can go ahead and believe whatever they want to believe, even if it's a lie... because they're winning nonetheless. But to associate the cause to TA is bullshit.
Using only technical analysis will guarantee you failure. Technical Analysis cannot assist you with respect to the future where it counts the most. You are using TA on charts (events that have occurred) to infer about the future. (Problem of Induction)
Technical Analysis as an investment strategy is utterly useless and absolute bullsh!t!
Technical analysis derives from humans’ preference for looking at pictures instead of engaging in abstract mental processes. This is why @SimpleMeLike is overly simplistic and thinks only in 1st order.
Technical analysis is, by its nature, something that evaluates the past. Making money in stocks requires evaluating the future. If there was a foolproof way to evaluate the future by measuring things in the present and past, everyone would use it and it would stop working (because prices would adjust to reflect it). Especially with traditional TA tools that everyone knows about.
An infinite number of monkeys banging on typewriters may eventually produce Shakespeare... get it?
K, then why did you post this line?
If all past data is useless, then why did you call out data specifically less than 1 year old?
So data more than 1 year old is more useful than data that is less than 1 year old? That blows your whole random thing out of the water.
When I say that a person that is risking ruin and/or trading with a negative EV strategy (basically same thing as ruin) is to be considered lucky.. he is to be considered lucky because he has luckily survived long enough to experience said gains. He will shortly be ruined. Once ruined, he will reflect and think about how lucky he was back when he had those gains and reflect on where he may have went wrong... like lottery ticket winners are lucky enough to win, blow the load, and look back in regret and reflect how lucky he once was.
The answer to your question is no, that is chance. Luck is still involved, such strategy may have random moments of extreme gains (positive black swans whether via put options on S&P or call options on a cancer biotech etc).
There is a difference between luck and chance; hence why we have 2 different words to describe 2 different things in the English language. They're related but slightly different.
The person knows he must take chances that will be positive or negative but will have the portfolio increase in value over time. This fact is embedded into the strategy, bad luck would be thinking he is protected against ruin or has a positive EV strategy and still getting ruined.
Now, kindly, please answer my question before commenting further.
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Randomness is incomplete information.
If I ask someone tell me how ABC stock is doing... and I show you a 6 month chart and its down -15% they'll give me one answer.
If I ask someone tell me how ABC stock is doing... and I show you a 5 year chart and its up 3,500%, they'll give me another answer.
You get more information the longer you zoom out about what it is you're looking at, but never complete information. You'll still run into problem of induction.
Now you got people looking into 2 minute charts applying ineffective tools that mislead them greatly. They'll win 6/10 times and think it's because they're measuring things correctly. There are major flaws with the ideas behind TA.
Get it?
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