A common mistake people make is relying on sample size without understanding the characteristics of the population from which the sample came from. This gets a little bit deeper into statistics, but you can still get lucky with a large sample size, even a very large sample size. You need to have a greater understanding of the population and in the trading world that can mean a lot of things. For example trading environment. Take a guy that made 100 trades a day and made a 15% return during the late 90's. Then remove him from that population set to the current day and give him your life savings to daytrade. My guess is you would get back nothing. You took a set of data with a large sample size from one population and introduced it to a completely different population. Very different results. Yeah, the guy was lucky. The first population set was a daytraders wet dream. You need to understand the difference. I would say 98% of the public does not.
Fooled by Taleb
- Thread starter jem
- Start date
A common mistake people make is relying on sample size without understanding the characteristics of the population from which the sample came from. This gets a little bit deeper into statistics, but you can still get lucky with a large sample size, even a very large sample size. You need to have a greater understanding of the population and in the trading world that can mean a lot of things. For example trading environment. Take a guy that made 100 trades a day and made a 15% return during the late 90's. Then remove him from that population set to the current day and give him your life savings to daytrade. My guess is you would get back nothing. You took a set of data with a large sample size from one population and introduced it to a completely different population. Very different results. Yeah, the guy was lucky. The first population set was a daytraders wet dream. You need to understand the difference. I would say 98% of the public does not.
Sadly morons outnumber out number us by a huge amount. However, I was a moron in the past (and by some definitions may still be LOL) and since they have sent me lots of cash and life experiences, I speak highly of them now! Traders need morons to earn easy money.
Congrats, you rnk in the top five of my all time line of people who came very close to figuring out the prdigm Dodd-Graniville implied.
I have not seen such a close call in the lst three years.
Obviously a trader does Not trade in continuatio, so your statement is a little off the mark in its formulation.
But your other statement does hit the mark.
All you have to do to complete the paradigm is stae the HS in terms of both market variables and also formulate the two statements containing the two variables in a single like-kind manner.
Congrats. I was really thrilled to see someone else compliment you as well.
This thread is so myth filled it isn't funny. The aspect that markets are not zero sum is living proof that sucess draws more participants than failure. Growth is the watchword..
I think this is more important than all the theoretical discussions around number of trades, years, etc.
The world is evolving and a statistically significant strategy 10 years ago may no longer be statistically significant regardless of how good the portfolio manager is.
At the end of the day determining if a manager has real edge is an art muh like determining if a CEO is the right man for the job.
how could I resist.
1. I find it fascinating to see the way people view the market.
I think Van Tharp was correct when he said none of really see the market... we all see it through our perceptual filters.
2. of course I would desire to see your answer... you are the respected poster I was referencing. (a few respected posters have already contributed)
3. So let me put it out there again with a modification.
If a person takes 20 trades a day over a 5 year period. has a steadily rising equity curve. (here is modification) And, is flat at the end of every day.
When can you say it the person is skilled.
if you cant...
suppose his winners were larger than his losers and he had more winners than losers...
Note... I completely dispute the fact some markets are are random or chaotic. (all the time.)
For instance I just started really trading again. You know what lesson I only had to learn twice for almost no money. (the trades may me sick as soon as I put them so I got out in less than a minute.)
Don't but or sell extended markets unless you have a high tolerance for the market moving against you.
I mean you are pretty stupid day trading if you go long after 10 straight ticks up... in the hopes you are about to break resistance.
That very non random rule worked 10 years ago and it worked yesterday and today.
My response here is going to be unpleasant to read. How could I resist?
I can tell if a person is successful if he is asking questions* about his experiences.
* questions of the type his mind thinks up to ask his consciousness.
with regard to the four items:
1. Learn that the market is always correct.
2. You have a stress syndrome that is following the Lizard Syndrome that preceded it.
3. There is a way to differentiate a drift type market trend from the other three types of market trends. There is a way to discern the end of drift trends by using the last two turns within the drift trend. you will be able to anticipate the end of the drift as well as the three other types of trends.
4. As of yet, resistance has never been broken. Don't think about this, just stay with your collection of myths you write about all the time.
A lot of people empathize with you, I can see that. Does empathy make you a better thinker or trader? (This Q is rhetorical)
I can tell if a person is successful if he is asking questions* about his experiences.
* questions of the type his mind thinks up to ask his consciousness.
with regard to the four items:
1. Learn that the market is always correct.
2. You have a stress syndrome that is following the Lizard Syndrome that preceded it.
3. There is a way to differentiate a drift type market trend from the other three types of market trends. There is a way to discern the end of drift trends by using the last two turns within the drift trend. you will be able to anticipate the end of the drift as well as the three other types of trends.
4. As of yet, resistance has never been broken. Don't think about this, just stay with your collection of myths you write about all the time.
A lot of people empathize with you, I can see that. Does empathy make you a better thinker or trader? (This Q is rhetorical)
There are other factors like illness, corruption etc.
I remember playing tennis a long time ago and recall that although I was fairly good, there were some people I couldn't beat even though I was the better player. They had that psychological edge.
Probably not very relevant to markets though.
I appreciate your response but my answer will surprise you.
My visceral reaction to putting on bad trades was honed over 7 years of profitable day trading. It protects me and I love it. I embrace my gut. When I hate the trade... I get out. Which really means I hated my undisciplined entry.
(Even if you think a breakout will work... you have to be smart about your entries. )
So when I got pissed at myself for non disciplined entries I got out with minimal loses. Which was great because...
I also nailed a few large swings in a futures markets. So at the end of the day... thursday was nicely profitable and friday was profitable... which is great for a mostly choppy day.
So now I will teach you something.
When you are pretending you are always in and trading the corners.... you are lying. You can't observe the es and get trades on the corners... the premium only gets extended for a few moments... if you are not in the cue... you are not executed at the extended prices.
But the time you observe the opportunity for those prices is gone.
Always in and get good prices at the corner for reversals is impossible when trading off 5 minute charts like the es.
Those pages and pages of posts you make after the market closes... are trading comedy. you approach the trendline... look at vvolume determine continuation or reversal and if reveral execute.
Meanwhile premium has already snapped back and prices are 3 to 4 ticks away in the cue.
Put up a five minute candle chart of the es for just about any trading day in the U.S.
It does not really matter what time you start the day.
look at all the consolidation periods.
See those wicks...lots of them... lots on each side of the open and close box. If you are making trades after the observation... you get filled in the box not on the wick. So if you subtract 2 to 3 ticks from each one of your orders... you papertrading always in methodology turns into big loses.
So don't go claiming someone who actually makes money trading has a lizard brain when you post many pages of bullshit about a your post facto daytrading method.
Which destroys your disciples accounts.
you should be ashamed of yourself.
My visceral reaction to putting on bad trades was honed over 7 years of profitable day trading. It protects me and I love it. I embrace my gut. When I hate the trade... I get out. Which really means I hated my undisciplined entry.
(Even if you think a breakout will work... you have to be smart about your entries. )
So when I got pissed at myself for non disciplined entries I got out with minimal loses. Which was great because...
I also nailed a few large swings in a futures markets. So at the end of the day... thursday was nicely profitable and friday was profitable... which is great for a mostly choppy day.
So now I will teach you something.
When you are pretending you are always in and trading the corners.... you are lying. You can't observe the es and get trades on the corners... the premium only gets extended for a few moments... if you are not in the cue... you are not executed at the extended prices.
But the time you observe the opportunity for those prices is gone.
Always in and get good prices at the corner for reversals is impossible when trading off 5 minute charts like the es.
Those pages and pages of posts you make after the market closes... are trading comedy. you approach the trendline... look at vvolume determine continuation or reversal and if reveral execute.
Meanwhile premium has already snapped back and prices are 3 to 4 ticks away in the cue.
Put up a five minute candle chart of the es for just about any trading day in the U.S.
It does not really matter what time you start the day.
look at all the consolidation periods.
See those wicks...lots of them... lots on each side of the open and close box. If you are making trades after the observation... you get filled in the box not on the wick. So if you subtract 2 to 3 ticks from each one of your orders... you papertrading always in methodology turns into big loses.
So don't go claiming someone who actually makes money trading has a lizard brain when you post many pages of bullshit about a your post facto daytrading method.
Which destroys your disciples accounts.
you should be ashamed of yourself.