A message to some day traders.
- Thread starter Amahrix
- Start date
great thread... right a. re we cannot predict, we just react
trading is all about managing risk & taking trades that, based on skill, we estimate have less randomness/variance and high odds of profiting.
so let's use real trade examples. I expect markets have a higher probability of selling off in october vs rallying, based on recent $VIX spikes, so I am mostly bearish, with these small initial trades in inverse ETFs/ETN swing trade positions. If markets sell off and I profit, how much of that is skill vs luck?
(btw threads here would be better if et posters used real trade examples vs theory imho):
trading is all about managing risk & taking trades that, based on skill, we estimate have less randomness/variance and high odds of profiting.
so let's use real trade examples. I expect markets have a higher probability of selling off in october vs rallying, based on recent $VIX spikes, so I am mostly bearish, with these small initial trades in inverse ETFs/ETN swing trade positions. If markets sell off and I profit, how much of that is skill vs luck?
(btw threads here would be better if et posters used real trade examples vs theory imho):
So randomness. Hmmmm like trading on a one minute basis for years and years and years (looking at RTH only that would be approximately 250x390x10years = 975,000 possible market minutes) being in a trade although obviously most day traders are in and out fast or mostly watching and waiting on the sidelines. How many so-called Black Swan events have happened during the past 10 years covering those 975,000 RTH market minutes that you claim a trader needs protection against?
Yea I know, it takes just one to possibly take a trader out. That knowledge and $2 could also possibly win you a Powerball Jackpot.
That's been my experience. I've always felt like longer time frames contain less noise than shorter time frames. I've had a lot more success trend following the overall market as a long term investor than as an active trader. Everyone sees things differently though. What looks like noise to me may look like a good setup to others.
Yes, trading is absolute waste of time and money to 99% of people and it's also bad to our health. Giving up is sometimes wise choice.
However, as a hobby, it's better than Casino I think......
I differ with you here. What you think is a wastage of time, is a source of income for millions of people. They don’t only trade as a hobby but to earn a living.
Howard Mark is deep into this predicting topic. He made a paid/commissioned study/research tracing back, 50 years or more (now im sorry, the details are blurred, i don't remember exactly, but it was a long-time period) about how accurate were most of predictions in the markets.
It was 50% on 50%. At least. I think it went even lower.
Anyway, the best of recent failed-prediction example came to me, from a R.Dalio,
based on a yield curve, should have happened a year ago.
(although i still greatly respect him)
So all that there is left - timing...
@Nobert you are spot on. This is the point. Predicting Time and Direction when trading is not going to provide consistency when it comes to profitable trading. The answer is Statistical Arbitrage also called Dynamic Hedging. @Amahrix i guess has tired of this thread and decided not to continue with the tedious responses?
