can someone give me the holy grail

[Trankuility]

^^^
Incorrect sir.

What it leaves you with, is as someone else mentioned, is many small losers, many small winners, a moderate amount of medium winners, and few large winners.

Big difference.

Quote from jokepie:

Stay Greedy whne in GREEN
Stay ShitScared when in RED

heh, yeah, that's another way of putting it.

 

[Rationalize]

Quote from Trankuility:

^^^
Incorrect sir.

What it leaves you with, is as someone else mentioned, is many small losers, many small winners, a moderate amount of medium winners, and few large winners.

Big difference.

...

And you think that this works when flipping a coin too?

If you are betting heads, and you get 2 heads in a row, you should keep betting heads .. but if you get one tail, you should stop?

And you think that this "leaves you with many small losers, many small winners, a moderate amount of medium winners, and few large winners"?

 

[Handle123]

Quote from Rationalize:

And yet some "traders" use technical analysis to exploit repeating patterns, and apparently become extraordinarily wealthy, driving fast cars and attracting beautiful women .. because they such savvy financial geniuses. Big swinging di*ks even.

But, of course, TA does not work in backtest. Doubly useless out-of-sample.

So .. while I agree that the past is no predictor of the future, perhaps something that fails in all timeframes and over all time periods in the past is probably not going to work in the future either.

But then maybe you're a profitable TA trader. What's your shoe size?

I believe why most do not do well with TA, is it not just when X crosses Y. The indicator shows patterns just like Price shows patterns. One has to study what is going on before they cross, during the cross and after they cross to be able to use TA to a better result. The more experience you gain at indentifying patterns of the indicators, the better the backtests and out of sample testing shows.

But too many don't take the "extra" step to think outside of the box. The 95% that lose read all the books on how to use TA and Price Action, have to use it unlike the other 95% and with strict disipline.

And as far as "Holy Grail" method, it is different for each trader, a method that does well might have extremely high risk and if your personality can't handle that, can't trade it.

 

[efficiency]

Quote from jokepie:

Stay Greedy whne in GREEN
Stay ShitScared when in RED

This sage advice kinda runs counter to your Deere short, doesn't it?

I amaze myself on how kind I can be.


Where I come from, exchanging a proven/proving position for fresh risk is_______________.

 

[efficiency]

Quote from Rationalize:

And you think that this works when flipping a coin too?

If you are betting heads, and you get 2 heads in a row, you should keep betting heads .. but if you get one tail, you should stop?

And you think that this "leaves you with many small losers, many small winners, a moderate amount of medium winners, and few large winners"?

If you run a simulation with a random number generator, the result is going to be the outcome tranquility arrived at.


The longer the sample the more statistically significant.

At 18,000 samples of a strategy undivulged , a distribution is highly skewed to the right. 2900 at breakeven (no coin flipping). But a pronounced "hook" at the very right, the land of the 10-baggers.

Although a coin flip is an instantaneous and binary event, a true distribution reinforces the time-tested adage to ride winners and cut losses quickly. Discretionary advantage over a random coin flip.

 

[deaddog]

Quote from Rationalize:

But, of course, TA does not work in backtest. Doubly useless out-of-sample.

I keep hearing that TA doesn't work yet I have never seen an example of how TA failed a trader.

I'm guessing that for the most part it's the Trader not TA that doesn't work.

 

[Rationalize]

Quote from deaddog:

I keep hearing that TA doesn't work yet I have never seen an example of how TA failed a trader.

I'm guessing that for the most part it's the Trader not TA that doesn't work.

Some examples.

Moving averages:

- When following a trend, buy when price crosses above the average, and sell when price crosses below the average. Works fine for long trends. Fails in ranges though, because when you're buying, price is about to revert back down below the average. Many small losses as price crosses back and forth.

- When counter trend trading in a range, sell when price crosses above the average, and buy when price crosses below the average. Works fine for long ranges. Fails in trends though, because when you're buying, price is about to continue down below the average. A small number of big losses as the trend continues.

Oscillators fail in the same way, just reversed.

The core of the problem is that you don't know ahead of time whether you are in a trend or a range. If you did, then TA may be useful.

 

[deaddog]

Quote from Rationalize:

-
The core of the problem is that you don't know ahead of time whether you are in a trend or a range. If you did, then TA may be useful.

What you have mentioned above are 2 strategies that will work in the right conditions. Nothing works all the time.

You should be able to tell at a glance whether you are in a trend or a range. Apply the strategy for that situation.

 

[Rationalize]

Quote from deaddog:

What you have mentioned above are 2 strategies that will work in the right conditions. Nothing works all the time.

You should be able to tell at a glance whether you are in a trend or a range. Apply the strategy for that situation.

If you are suggesting that you can tell "at a glance" whether a trend or a range will continue, then you will do very well..

I'd say however that all participants have a 50% chance of telling whether a trend / range will continue.

Random, minus costs.

Try your luck with some historical yahoo charts. Cover up the right hand side, and try to predict. It's free..

 

[deaddog]

Quote from Rationalize:

If you are suggesting that you can tell "at a glance" whether a trend or a range will continue, then you will do very well..

I'd say however that all participants have a 50% chance of telling whether a trend / range will continue.

Random, minus costs.

Try your luck with some historical yahoo charts. Cover up the right hand side, and try to predict. It's free..

50% is not bad if you cut losses and let winners run.

Like I said nothing works all the time, and there is more to trading that just buying or selling a MA cross. Risk and Money management also factor into the equation.