Do trading edges for retail traders rely on intellect or do they rely on knack ?

[SimpleMeLike]

you back test your strategy rigorously using the rules you would use in live trading.

trend2009,

Thank you. I am back testing manually now.

I have to work on having more rigorously plan for exiting and entry.

How many manual backtesting trades do your recommend to prove I have consitent profitable stratgies?

Thanks

 

[murray t turtle]

Just what is considered intellect anyway when you're competing against bots (soon it'll be AIs). It's pointless to even ask.

What you need are merely two things: profitable strategy and discipline to follow through. Other than that, it's all noise.

BTW luck doesn't come to those who can't spot it.

%%
Good points. Bernard Baruch, [1870-1965] said bad luck =laziness.....................................................................................................

 

[trend2009]

trend2009,

Thank you. I am back testing manually now.

I have to work on having more rigorously plan for exiting and entry.

How many manual backtesting trades do your recommend to prove I have consitent profitable stratgies?

Thanks

If you are a day trader, possibly 1-2 years is enough, which possibly has covered all situations a day trader may come upon. if you are a swing trader, you need to cover bull and bear cycle, which last many years. I found it is quite hard to manually back test a strategy, since it tends to loose the rules to favor a winning trade.

 

[MarketDiver]

Finding an edge in the indices or some stocks is easy. But not so easy for forex. Forex is choppy.

 

[gaussian]

I've met many more successful traders with no more than a high school education than ones with more school than high school.

Having this problem myself, I can tell you that it is harder to accept the mystery of the markets when you've taken enough math to smell something funny. Does this mean nothing is there? No, after I stopped trying to outsmart myself and the market I started to become profitable. Does this mean anyone with an advanced degree would make a bad trader? No, not at all. But there is something to be said about the "blissful ignorance" of someone who hasn't studied a hard science. To me, it really came down to letting go of wanting nice numbers. For example, the markets don't really behave nicely when you try to model them with standard probability theory stuff. Sure, you have options but even in modern models there are holes. If you didn't care to begin with you would've never thought about all the funny business in some of the math that goes into the markets. This is a surprisingly hard concept to work back to. I wouldn't give up my academics ever, but wanting to trade has been a relatively arduous journey as a result. Trying to dig as deep as possible for an "answer to the markets" has just left me returning in the negatives.

I guess to answer the question directly -

you have to be smart enough to know a good thing when you see it, and not so smart that you miss it. I've spent more time learning to let go before I became profitable than studying any particular system. After that, I just found something that really worked well for me and the way I think (futures spreads - they have some nice mathematical properties and also just "make sense" to me) and walked away from everything else.

 

[henry76]

%%
Good points. Bernard Baruch, [1870-1965] said bad luck =laziness.....................................................................................................

Bernard was just plain wrong , your genes are down to chance , your early experiences which extrapolate into later experiences down to chance , which are the only two inputs you have into the decisions one makes.

 

[SimpleMeLike]

If you are a day trader, possibly 1-2 years is enough, which possibly has covered all situations a day trader may come upon. if you are a swing trader, you need to cover bull and bear cycle, which last many years. I found it is quite hard to manually back test a strategy, since it tends to loose the rules to favor a winning trade.

Hello trend2009,

Merry Christmas to you and family

Thanks for response. I currently manual back test price action setups. Yes it's a lot of work, but I get chart experience as well and helps my quick decision making skills and other ideas.

I only backtest for 100 to 300 trades to see if strategy makes money and I'm comfortable with it.

 

[ironchef]

Hint ;most of the market millionaires are market makers /specialists + long term investors;

Another hint, as they say in Chicago; '' the smarter you are , the longer it takes'',

I hope you are wrong on both counts, after all we are traders here and we need hope.

Merry Christmas.

 

[heavenskrow]

As Mark Douglas once said, "every moment is unique".

There is your edge derived from backtesting-forwardtesting.

Then there are the players in the current market which produce the "every moment is unique".

Hence the art and science aspect to trading.

I'm not necessarily smart by any means. I am similar to Ray Dalio who claim we are dumb-shits. What I do best is to observe and listen and no ego which has helped me uncover the market's flow.

 

[murray t turtle]

I hope you are wrong on both counts, after all we are traders here and we need hope.

Merry Christmas.

%%
WELL GOOD thing i dont make predictions about the future stock market.Lots of truth in the Chicago sayin' ''the smarter you are the longer it takes'', . But also true is the old school hedge fund winner M Stienhardt saying/paraphrase, even an ignoramouse can make a fortune ''LOL [Spell checker not used; not long bitcon]