Does Probability exist?

[JTrades]

I'm still learning the game so this is an honest question. What mistakes do people continue to make and where can I start to learn how to take advantage?

Off the top of my head:

• holding a position too long (including holding onto losers)
• not holding long enough out of fear of losing an unrealized profit
• poor position sizing (including averaging down or misuse of scaling in and out)
• trading against the trend
• trying to pick turns (tops and bottoms)
• trading too large, beyond comfort zone
• getting into a position too early
• getting into a position too late (after the ship has sailed)
• not understanding risk exposure
• misuse of hedging / diversification
• looking at historic charts but lacking capability to trade at the hard right edge
• over thinking; over complication
• not thinking enough
• over trading (instead of waiting on the sidelines for the best opportunities)
• being unaware of a higher context
• being too leveraged
• thinking options will solve everything
• being too confident after a short stint writing options
• too emotionally attached to individual trades
• believing negative sentiment in forums
• reliance on others for ideas
• not enough planning
• lack of analytical skills
• inability to form sound hypothesises
• inability to correctly classify similar events (seemingly similar events could have very different causes)
• misunderstanding statistical significance
• pinning too much reliance on a single artefact such as S/R
• lack of mechanical rules
• too much immersion in trading software (it's just a tool for placing trades)
• hoping
• having expectations way out of line from reality
• lacking discipline; lacking patience; lacking focus
• lacking self belief

 

[marketsurfer]

Off the top of my head:

• holding a position too long (including holding onto losers)
• not holding long enough out of fear of losing an unrealized profit
• poor position sizing (including averaging down or misuse of scaling in and out)
• trading against the trend
• trying to pick turns (tops and bottoms)
• trading too large, beyond comfort zone
• getting into a position too early
• getting into a position too late (after the ship has sailed)
• not understanding risk exposure
• misuse of hedging / diversification
• looking at historic charts but lacking capability to trade at the hard right edge
• over thinking; over complication
• not thinking enough
• over trading (instead of waiting on the sidelines for the best opportunities)
• being unaware of a higher context
• being too leveraged
• thinking options will solve everything
• being too confident after a short stint writing options
• too emotionally attached to individual trades
• believing negative sentiment in forums
• reliance on others for ideas
• not enough planning
• lack of analytical skills
• inability to form sound hypothesises
• inability to correctly classify similar events (seemingly similar events could have very different causes)
• misunderstanding statistical significance
• pinning too much reliance on a single artefact such as S/R
• lack of mechanical rules
• too much immersion in trading software (it's just a tool for placing trades)
• hoping
• having expectations way out of line from reality
• lacking discipline; lacking patience; lacking focus
• lacking self belief

Again mostly true platitudes.

How do u take advantage of other people doing the above? I think that was the original question.

 

[JTrades]

How do u take advantage of other people doing the above?

Simple. You understand the above then do as few of the above as possible.

The game is accumulation of profits. The trader who controls risk will continue to be in the game. The trader who develops sound analytical skills will acquire sound knowledge. The trader who logically implements timing and sizing with his knowledge will be most profitable.

It's like murray turtle says, wisdom is profitable to direct.

 

[JTrades]

Again mostly true platitudes.

Platitudes or not, they are worthless without study, that is true.

 

[dbphoenix]

Platitudes or not, they are worthless without study, that is true.

That some of them have become platitudes doesn't make them any the less true. If the failed traders who are forever arguing about this stuff would put them into practice, there would be far fewer failed traders.

 

[marketsurfer]

Simple. You understand the above then do as few of the above as possible.

The game is accumulation of profits. The trader who controls risk will continue to be in the game. The trader who develops sound analytical skills will acquire sound knowledge. The trader who logically implements timing and sizing with his knowledge will be most profitable.

It's like murray turtle says, wisdom is profitable to direct.

Yes, that seems right-- but probabilities and analysis in a numerical system are math based. Where is the mathmatics and proper testing proving the platitudes? Fact is this stuff, even Wyckoff himself, is so vague that its untestable.

"In a soldiers stance, i am my hand at the mongrol dogs who teach....." The Byrds

Ps-- if you insist on old fashion TA, may i suggest my friend David aaronsons book- evidence based TA.

 

[Handle123]

if volatility (price change is very low) or stock is trading in tight spread no one can do anything with this, trading becomes risky and non justifiable at all.

One has to define tight range, as for myself, I normally enter in chop of some type, am good at trading tight range and don't consider myself a trend trader, am scalper who trades within Trading Plan.

With regard to trading, you can say something happened x number of times in the past and then pretend to translate that into a probability of that event happening in the future, but i don't buy it since the markets have a non stationary distribution i.e. the underlying distribution is always changing.

So you don't trade at all? Cause unless you using darts, whether you use Price charts, TA or Fundamentals, all is based on the past history?

Trading is knowing the answer before the question and that was accomplished by studying past occurrences. So I believe and use Probabilities. We live in every changing world, but people's emotions don't change and we trade often times opposite of what makes sense because backtested worked well in past. Every trade is a prediction.

 

[dbphoenix]

One has to define tight range, as for myself, I normally enter in chop of some type, am good at trading tight range and don't consider myself a trend trader, am scalper who trades within Trading Plan.

So you don't trade at all? Cause unless you using darts, whether you use Price charts, TA or Fundamentals, all is based on the past history?

Trading is knowing the answer before the question and that was accomplished by studying past occurrences. So I believe and use Probabilities. We live in every changing world, but people's emotions don't change and we trade often times opposite of what makes sense because backtested worked well in past. Every trade is a prediction.

Hindsight is a wonderful thing. And the smart guys get their hindsight in first.

--Lee Child

 

[dbphoenix]

Trading is knowing the answer before the question

I just have to emphasize this.

It ought to be on a T-shirt.

 

[galvinlee888]

Again mostly true platitudes.

How do u take advantage of other people doing the above? I think that was the original question.

This time I with you.
Platitudes is to make you feel good, no one (even the institutional) are able to use this.