Quote from marketsurfer:
Easily from your post.
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A 30% hit ratio would portend to be less than random, worse performance than truly random entries with tight risk control. Therefore, inadvertenly apparently, you are saying that random entries must work.
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I have spoken to and interviewed Ken Grant for an article. He is one smart guy! Once again, if most profits come from 10% of trades, this logically leads to the conclusion that 90% of your trades will be break even, small winners or different size losers depending on risk control. Randomly entering, then holding or cutting depending on price action, would clearly result in these or better outcomes. right?
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Clearly, if you have an edge making your entries better than random odds of success, multiple shots would not be needed to catch the outlier moves. You would catch the same moves with this methodolgy with random entries.
I really don't know what to say to you, surf, except we are practically living on different planets.
The logic of your first paragraph, re, 30% hit ratio is dead wrong out of the starting gate, and you appear not to have the slightest inkling as to why -- like an armchair theorist who is wholly unaware of the nuances and subtleties of real world interaction. You speak of discretionary trading like a sex therapist who has never had sex.
Your point in the Ken Grant paragraph, re, trying to connect with "randomness" is insanely out to lunch too, again for reasons you seem to miss completely. Random entries have nothing to do with setting up and executing on huge R trades, which require repeated attempts at logically identified inflection points to dial in just right (a hell of a long way from throwing a dart).
In other words, and holy mother of god I cannot believe I am having to explain this to someone who claims to be a knowledgeable trader, the gap between "random entries" and combining fundamentals, technicals and sentiment to establish a tightly controlled position in large size that is subsequently ridden to outlier gains is GRAND CANYON SIZED. This seems as plain as the day is long.
It's why Paul Tudor Jones gave up hundreds of basis points in probes before nailing the '87 crash. It's why Jesse Livermore talks repeatedly about putting out tester bets in the market before establishing his full line. It's why Druckenmiller says he never uses valuation to time a market (but instead applies other methods of testing when he feels the time may possibly be right). It is why countless top global macro traders talk about developing a fundamental view, then expressing trades around potential catalysts and technical inflection ponts that confirm that view, because there is no bell that rings to say 'this is the precise moment when the broad market agrees with you now.'
It is, pardon my french,
Fucking Obvious, with a capital "F" and a capital "O" (and bold to boot).
In short, for anyone who understands the nature of discretionary trading (especially macro trading) on the most basic level, as I have long described it and others long before me have described it, the "non-randomness" of the exercise is so damn bloody transparent as to make your professed ignorance mind-boggling.
But then, surf old buddy old pal, you always did have a knack for astonishing me (in your own unique way)...
