Futures Trading Analysis

[NoDoji]

If one takes the time to compare the high/low of price turns to certain price levels in the environment leading up to the price turn, one will understand how incredibly organized price action is (with the exception of action surrounding key news releases). An astute price action day trader with the mindset to follow a plan without deviation will know that the odds are favorable on every trade.

This phrase does not mean that every trade will produce a profit. It's not necessary to produce a profit on every trade within the framework of a positive expectancy trading plan.

Consistent profits come from predicting the odds of a favorable price move on each trade, not from predicting the outcome of each trade.

If the odds are 50% and risk:reward is 50%, you will lose because that is random and the slippage and commissions will consume your account.

However, the reason price turns at certain levels far more often than not is the key to developing a consistently profitable trading plan.

None of this work or knowledge is useful, however, without the ability to execute the plan.

 

[dbphoenix]

If one takes the time . . .

 

[marketsurfer]

One could ask the same of you, as you continue to spout the same old tired "random market theory" baloney.

Your material is from the pre - pc and even pre-computer age. I thought i was the oldest guy on here, i guess u have me beat. surf

 

[marketsurfer]

If one takes the time to compare the high/low of price turns to certain price levels in the environment leading up to the price turn, one will understand how incredibly organized price action is (with the exception of action surrounding key news releases). An astute price action day trader with the mindset to follow a plan without deviation will know that the odds are favorable on every trade.

This phrase does not mean that every trade will produce a profit. It's not necessary to produce a profit on every trade within the framework of a positive expectancy trading plan.

Consistent profits come from predicting the odds of a favorable price move on each trade, not from predicting the outcome of each trade.

If the odds are 50% and risk:reward is 50%, you will lose because that is random and the slippage and commissions will consume your account.

However, the reason price turns at certain levels far more often than not is the key to developing a consistently profitable trading plan.

None of this work or knowledge is useful, however, without the ability to execute the plan.

Hi

Nice to see you here. Please dont take my points as attacks, because they are not. With yhat said, the above post is empty rhetoric.

But you and your group talk about odds like you do calculations to determine them. In fact, thats what odds are-- math. If you could actually increase real odds consistently and execute on that -- you would quickly be the best trader on earth.

With that said-- how do you predict the odds of a favorable price move on each trade? This needs to be quantified or odds is the wrong term to use. Please no DB style verbiage. I would like to see the numbers. Thanks. Surf

 

[dbphoenix]

Your material is from the pre - pc and even pre-computer age.

So? Truth was not born with Univac. Candlesticks are four hundred years old, yet many people use them. Before 1990, not so much.

What you "know" of the markets is what you've read or heard or been told. None of what you think you know was learned by studying the markets. That's why your system isn't consistently profitable. That's also why it only works "sometimes".

 

[k p]

Hi

Nice to see you here. Please dont take my points as attacks, because they are not.

But you and your group talk about odds like you do calculations to determine them. In fact, thats what odds are-- math. If you could actually increase real odds consistently and execute on that -- you would quickly be the best trader on earth.

With that said-- how do you predict the odds of a favorable price move on each trade? This needs to be quantified or odds is the wrong term to use. Please no DB style verbiage. I would like to see the numbers. Thanks. Surf

Before ND comes in with a better answer than mine, here is what I would like to add. I like the fact that you're asking honestly surf. Here is a little experiment. Below is the outcome of a series of events, "+" means the outcome is a win, "-" means the outcome is a loss. So here we go.

+ - + + - - - + - + + - - - + - + + - +

Its a series of 20 outcomes. Looks kind of random perhaps? I designed it purposefully to be 50% wins and 50% loses. Now here is the key. If this was a trading system.... is this a good system? The one critical piece of information missing is the fact that each win nets you twice as much as each loss. If you're trading the NQ, lets say a win is 6 points, and a loss is 3 points. If its money, let say a win is $400 and a loss is $200.

Now the question of course is if you can design something with a 50% win rate and a 1:2 risk to reward ratio. I've seen this win % way better than 50%, so shooting for this number isn't hard. If you look up the journal of geez from about 2008, you will see this technique in play.

Looking at the individual outcomes, I don't think there would be any way to predict which you're gonna get next. In terms of wins, there are never more than 2 in a row, in terms of losses, I see I actually put 3 in a row, but it looks pretty damn random to me, and with a string of 100 outcomes, I'm sure there could be 5 or more in row that are wins or losses.

But you have to agree that a 50% win rate isn't that unimaginable, and you have to agree that shooting for twice the profit as your stop isn't so complicated either, right? Well with those numbers, you're set to make a killing, as long as you hammer out your plan and follow it.

 

[dbphoenix]

Please dont take my points as attacks, because they are not. With that said, the above post is empty rhetoric.

Which is not unlike saying I don't mean to offend you, but you're the ugliest woman I've ever seen. Or You sure don't sweat much for a fat girl.

 

[samuel11]

Below is the outcome of a series of events, "+" means the outcome is a win, "-" means the outcome is a loss. So here we go.

I think what Surf is asking is “how do you determine your odds”.

IOW, if you observe an event 500 times in the last 2 years, how can you be sure that the statistics for the next 500 occurences will mimic the past.

Not my question, and I’m not going to answer.

 

[marketsurfer]

Before ND comes in with a better answer than mine, here is what I would like to add. I like the fact that you're asking honestly surf. Here is a little experiment. Below is the outcome of a series of events, "+" means the outcome is a win, "-" means the outcome is a loss. So here we go.

+ - + + - - - + - + + - - - + - + + - +

Its a series of 20 outcomes. Looks kind of random perhaps? I designed it purposefully to be 50% wins and 50% loses. Now here is the key. If this was a trading system.... is this a good system? The one critical piece of information missing is the fact that each win nets you twice as much as each loss. If you're trading the NQ, lets say a win is 6 points, and a loss is 3 points. If its money, let say a win is $400 and a loss is $200.

Now the question of course is if you can design something with a 50% win rate and a 1:2 risk to reward ratio. I've seen this win % way better than 50%, so shooting for this number isn't hard. If you look up the journal of geez from about 2008, you will see this technique in play.

Looking at the individual outcomes, I don't think there would be any way to predict which you're gonna get next. In terms of wins, there are never more than 2 in a row, in terms of losses, I see I actually put 3 in a row, but it looks pretty damn random to me, and with a string of 100 outcomes, I'm sure there could be 5 or more in row that are wins or losses.

But you have to agree that a 50% win rate isn't that unimaginable, and you have to agree that shooting for twice the profit as your stop isn't so complicated either, right? Well with those numbers, you're set to make a killing, as long as you hammer out your plan and follow it.

I like you kp. You have a great writing style that conveys a pleasant personality.

I think we may be arguing the same thing. Just that i believe the outcome of each entry and even series is random. Whereas the price action folks somehow believe that their entries somehow provide greater odds of success acrosd single trades or series.

I call BS and a basic lack of understanding on even the most simple financial concepts on thise that espouse this naive idea.

Now, once the trade is entered and price moves favorably. Managing this movement profitably is where the manual trader skill comes into play.

Remember im talking about traders without any edge whatsoever other than money management skills.
With a real structural edge, nothing else matters since it can be automated and scaled. It wont last since the market will morph to quickly eliminate it. But while it lasts its great.

I need to get back to writing/working on the beach. Ill post later. Peace. surf

 

[dbphoenix]

I think what Surf is asking is “how do you determine your odds”.

IOW, if you observe an event 500 times in the last 2 years, how can you be sure that the statistics for the next 500 occurences will mimic the past.

Not my question, and I’m not going to answer.

You can't. And both ND and I have answered this question umpteen times. But ms doesn't want to hear it and pretends he's asking it for the first time. But I'll post this again as all I have to do is copy and paste:

Your edge begins with the knowledge you gain through your research and testing that a particular market behavior offers a level of predictability that provides a consistently profitable outcome over time.

Those who don't know how to define "behavior", "market behavior", "particular market behavior", "outcome", "profitable outcome", "consistently profitable outcome", and so on, or even what "research and testing" entail will not gain much information from this definition.

Those who are genuinely interested can always read ND's first journal.

There's also this: Help, I've been chopped!