How did you become consistant?

[HoundDogOne]

Quote from romik:

I would like to add here that it is important not to keep all 'eggs in one basket'. I can relate very well to holding onto an overextended position if it is the only one and all funds are tied up in that one trade. Spreading your risk by opening multiple positions using that same proven criteria should make it a lot easier to cut a losing position and look for another favourable scenario.

FINALLY someone mentions what is 90% of the ballgame...
Being properly hedged at all times.

Other than ultra-short term scalping...
The only way to produce "consistent" returns is to be an expert and obsessive hedger.

But too many people here believe they can lay directional bets using whatever...
And beat a market that is essentially random for liquid securities.

 

[Maverick1]

Quote from HoundDogOne:

FINALLY someone mentions what is 90% of the ballgame...
Being properly hedged at all times.

Other than ultra-short term scalping...
The only way to produce "consistent" returns is to be an expert and obsessive hedger.

But too many people here believe they can lay directional bets using whatever...
And beat a market that is essentially random for liquid securities.

To anyone/everyone struggling with consistency, check out this article... I think it has deep implications for systematic/method traders and reinforces the principles taught by Mark Douglas in a beautiful way...

Note especially that the mathematician cannot explain why the curve grows exponentially, because of the random components/structure of the experiment. Reminds me a lot of the work done by Wolfram on fractals generated by simple rules/formulae. But the axiom behind Wolfram's work is that there's got to be rules to begin with.

Is this validation of Douglas' belief that in trading, the consistent application of an effective trading rule can yield random results at the micro level but beautiful non random results at the macro level?

Nitro would probably enjoy talking about this

Here's the link:
http://www.sciencenews.org/pages/sn_arc99/6_12_99/bob1.htm

 

[austinp]

<i>"Other than ultra-short term scalping...
The only way to produce "consistent" returns is to be an expert and obsessive hedger."</i>

That is a common opinion voiced by many, but it is 100% false. If there is one, just one person who is trading directional and making a profit, that statement on its face is invalid.

Market action is random, but often predictable to enough degree for success. There are definite trends visible at the time of movement and repeated price patterns within that can be exploited with defined edge.

Please don't confuse "random" with "non-repeating" in the markets. Those terms are not synonymous.

 

[Raystonn]

Maverick, the absolute value of the numbers grow exponentially. However, the sign of the values is still random. In effect you are leveraging up quickly and alternating between massive gains and massive losses at random.

-Raystonn

 

[Maverick1]

Quote from Raystonn:

Maverick, the absolute value of the numbers grow exponentially. However, the sign of the values is still random. In effect you are leveraging up quickly and alternating between massive gains and massive losses at random.

-Raystonn

If you are alternating between massive gains and losses at random, then the curve should not grow exponentially correct? If I'm not mistaken this is what the mathematician cannot explain. What am I missing?

 

[Arnie]

He is using the absolute value in the graph.

By examining typical random Fibonacci sequences based on coin tosses, Viswanath uncovered a similar pattern. He ignored the minus signs, thereby taking the absolute value of the terms

 

[cashmoney69]

Quote from Steve Tvardek:

You've been given solid advice on several threads where you basically asked the same thing. I suggest re-reading them and then trying to apply some of the things suggested.

Why is it that every time I make a thread similar to this, someone comes on and says: "You arn't taking any advice". Why cant I simply just ask an innocent question?... If I started a poll asking what kind of cars people drive, and if 60%+ drive a Toyota, does that mean I need to "take the advice" and sell my car?..no.

The question was, "how did you become consistent?", not "how can i become consistent?"

Sorry if I tend to ask questions that are similar. I have over 800 posts, I dont remember them all.


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peppermint

let me ask you, what is your edge?

your answer will probably be the same as mine. speed. If you find an opportunity, you must be able to capitalize on it before everyone else. If time was on our side, we'd all be investors and NOT traders.

 

[Lamont_C]

Quote from cashmoney69:



Sorry if I tend to ask questions that are similar. I have over 800 posts, I dont remember them all.

You don't have to. You have asked more or less the same question 800 times . . .

 

[Arnie]

Quote from Raystonn:

Maverick, the absolute value of the numbers grow exponentially. However, the sign of the values is still random. In effect you are leveraging up quickly and alternating between massive gains and massive losses at random.

-Raystonn

I agree. If he used the neg figures instead of the abs value, I think that graph might look a lot different.

Mav,

How would we use this? Could you give an example?

 

[romik]

Quote from cashmoney69:

Why is it that every time I make a thread similar to this, someone comes on and says: "You arn't taking any advice". Why cant I simply just ask an innocent question?... If I started a poll asking what kind of cars people drive, and if 60%+ drive a Toyota, does that mean I need to "take the advice" and sell my car?..no.

The question was, "how did you become consistant?", not "how can i become consistant?"

Sorry if I tend to ask questions that are similar. I have over 800 posts, I dont remember them all.


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peppermint

let me ask you, what is your edge?

your answer will probably be the same as mine. speed. If you find an opportunity, you must be able to capitalize on it before everyone else. If time was on our side, we'd all be investors and NOT traders.

Cash, it's consistEnt.