Common Sense... does it exist in the market?

W

WDGann

It's from this thread...

http://www.elitetrader.com/vb/showthread.php?threadid=11618

First, my comment was there is no "common" common sense. I was born and raised in Japan, then moved to US 10 years ago. Common sense in Japan and in the US is different. What is common sense in business is not a common sense in some religious common sense.

With the market, what I thought be common sense trading actually ended up to be wrong. When I started back-testing strategies, what I thought to be common sense ended up to be a losing strategy. When I started it was hard for me to create a system with profit factor of 1.5. After 5 years, I can come up with one in 10-20 min. from knowledge and experience. My common sense in creating a strategy has realistically adjusted and changed...

When I traded the markets... I was losing a lot. I had a good system but I still lost or underperformed. I have learned and adjusted and it's common sense for me...

So what is common sense for me since I was in Japan has changed to the American lifestyle, System Programmer, Mechanical Trader, to now a Discretionary Trader...

I've been opiniated based on experience... what do you all think?
 
Common sense, random, liberty, etc... all these terms have something in common: they are abstract and behind abstraction you can instantiate or hide many things it will depend on context and people. So the first thing to do is to precive the definition, and above all the context and your personal point of view in this context. Context is what is hiden and most important. It is what people are not automatically conscious at. So the context of common sense here is in trading. Is this context the same as in general ? No Context in trading has much thing to do with variation concept understanding and as a former statiscal process ingeneer I can tell you that understanding vraiation concept thorougly is not so common sense even for ingeneers: they know how to calculate the most sophisticated formulas but they don't even know that hasard is rather transcendant to mathematic and that statistical test alone do not decide ALONE if it is random process or not but the knowledge of the process is also important in the decision.

I have some usefull videos I can post that explains variation concepts and for most of you I think It will not be so common sense. It is in the context of quality control and it can be easily transposed in the context of trading. For example in statistical control there is the concept of common cause or effect and speual effect. In trading it would be breakout signal. In quality control you must not change a process as long as there is no special effect, in trading you must not overtrade by only taking sure signals.
 
Now let me get this straight. You went from an unprofitable trader using a 1.5 dime a dozen profitable system, to a discretionary trader, all because you have common sense?
 
"I have some usefull videos I can post that explains variation concepts and for most of you I think It will not be so common sense. It is in the context of quality control and it can be easily transposed in the context of trading. For example in statistical control there is the concept of common cause or effect and speual effect. In trading it would be breakout signal. In quality control you must not change a process as long as there is no special effect, in trading you must not overtrade by only taking sure signals."

I for one am interested in the videos.

Still being in the process of finding out a "scientific" explanation for the fact that an average succes ratio >0.5 is possible, just like a higher average gain is possible.
 
I think that the market, being a giant auction which reflects the current status of all participants' beliefs, at each moment, works on nothing than common sense (i.e., unadulterated aggregate opinion.)
 
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