How do you know if you're making **Progress**

Quote from jack hershey:

Great OP.

This can be the thread of the month.

I looked at the Far Side cartoon for today and had two laughs: the cartoon and why aren't there two shoe boxes?

A fast animal is putting on 2 sneakers to go catch another animal from the nearby herd. He has four feet.

This is my contribution with regard to the topic.

A traders progress is measured by a common standard available to all traders.

There is but one standard: the market. And the standard is always right and always there.

Neither trader A or B is going to be showing much progress over time by this standard. Both are just going to be marginal and like the sample in the recent Clinical Study of Day Traders.

The market offers. This offering is the standard.

The narrowing of the trader's equity curve, asymptotically to the market equity curve of offerings is the measure of progress.

The lessening of the difference of the two curves is the measure of progress.

Since this is the standard, then it is incumbant on all traders to continue to perfect their performance by ranking a set of objectives that are specifically designed the knock off serious chunks of the existing difference.

I hope it get very obvious to ET members that there are a herd of elephants represented by these chunks that need to be knocked off.

Purposeful work on each of these chunks is called for at all times.

1. Traders A and B have never seen the markets. Fix that. If you do not have at least four platforms running, you are not seeing the markets. 100,000 lines of code doesn't do it either.

2. You have to be on the right side of the market when you are in the market. If you can't see the market you can't see the right side. One continuous indicator measures the sides of the markets. It is the sentiment indicator. Neither trader A or B have a display running continuously of the sentiment indicator. Graph all losses as a line on the equity graph. This shows where the sentiment was not measured correctly. Color the area under the line and above the horizontal axis; it is the money forfeited by losing while on the wrong side of the market.

3. You have to be in the market to make money. Calculate the % of the time you are in the market. Use 100% as the base beause the is the % of time the market is offering profits. the task is to design a trading approach that takes 100% of the opportunity. All of the times you are presently not in the market and it is offering money is an indication of the amount of progress that is on the table to do. Draw a graph representing the % times the standard + the height of 2. Color the eara between the two lines; it is the equity forfeited by being on the sidelines.

4. You have to not make errors is switching sides of the market. The remaining area between the market offering standard and the sum of 2 and 3 lines is largely timing errors doubled. Divide the vertical didtance in the space and draw a "timing" correction effect. This is the "putting" phenomena. you could be on either side of optimum. Here the topic is effectiveness and efficiency of trading and it is measured to become optimum.

Notice that there is no probability or betting or money management or protection as part of this.

the standard of progress in trading is how a trader can recognize the correct strategy (neither A nor B has anything remotely related to strategy) and perform that strategy. If trader A or B had anything like a stategy that would have been said. Most often in any post what is not said is the important consideration.

Why is a person unable to see the standards of trading?

Why do not people work in purposeful ways?

Why haven't most people ever seen the markets?

This is just simple run on copy nor reread or edited. It is just a simple way to make a simple graph.

I just made it up as I went along and made sure I covered the big elephants as a starter.

No one will do any work to make a graph. No one will figure out what the market is offering. no one has a display that shows the market; it takes four platforms and that would be too expensive...lol. No one does anything to get more time in the markets; they just watch the pipeline flow to others and let it pass until they are broken and have to quit trading.

Optimizing....effectiveness...efficiency...these are so far out on the hozion a cheetah with for snekers on couldn't catch them they are running away so fast for most traders.

90% daytrading failure rate. Most people never have any forward progress in the first place. Trader A and B didn't have any. Zero out trader A aha's he doesn't get it at all. The level of profits he is making probably look like the performance of LBR respondents (See table 3).
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Just found this thread. Thanks Jack for the post above. Your ideas are always refreshing and some of the best food for thought.

I have a quick question.

In reference to position trading, while working with a sample market of 30 or 40 instruments. How do you view the "always in" methodology in this case.

If you have six posistions open maximum at any time I wonder if you think that using SCT type trading is feasible in this scenario. (or is having six positions open at all times the equivalent to SCTing one market)

Thanks.
 
Quote from optionpro007:

Just found this thread. Thanks Jack for the post above. Your ideas are always refreshing and some of the best food for thought.

I have a quick question.

In reference to position trading, while working with a sample market of 30 or 40 instruments. How do you view the "always in" methodology in this case.

If you have six posistions open maximum at any time I wonder if you think that using SCT type trading is feasible in this scenario. (or is having six positions open at all times the equivalent to SCTing one market)

Thanks.
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great question.

the PVT, at expert is all in all the time too.

The quickest answer in the camtasia called putting the pieces to gether. Where we centered on the "unusual volume chart for the trading sequences.

The six positions open that divided the capital is the equivalent.

I haven't introduced in detail as yet the "cross over trading and the neutral bias trading where trading short is a factor.

What it comes down to to emphasizing the exponent of the compound interest formula.

We go from 40 to 60 quite easily by being sharp.

At some point the aspect of having to do scaling in and out becomes a reality. when this is apperant that it is a modus, then you are shifting blocks of money out of one stock into another. It is a laced operation.

basicaly you have on unusual volume the SIGNAL that the door is open and there will be a price breakout in the am within an hour to hour and a half. You also see what you own is not making the increasing PRV so that stock is peaking.

you use 10% of cumulative volume as the amount of blocks you can be running in each.

i use an example at the stream limit of 100,000 shares.

the exit takes 30 and the respective entrance was 20
So you are blockiong out and blocking in using the cummulative volume and the block sizes shouwing on the T&S.

Electronic is convenient these days. In the past it was a case of keeping your broker trained up and on the ball. i prefer women simply because they are reallly concientious and past being salesmen and schmoozers.

So when you ramp up to becoming more efficient you look at some slight shifts

I like to trade into the peak and that saves a day. I just leave stuff on the table it looks like but it isn't

you gain another lap on the compounding every once in a while


For entering, you can go to pm entries because you then have the money. and you know the "news" of the BO is going to be sniffed out by others and then the herd comes in. going in late afternoon set you up for front running the arriving herd on the next day
Often this is a gap.

Look at NTRI to see this last year.

Those were 3 day trades that got the gaps.

The result is true compression and having lots of days to add on the exponent.

All three day trades is exponent of 80.

And as you see on NTRI the take per cycle is up to 30% per shot.

Over 12 days you did 4 cycles of three days each with 30% per shot.

Personally, I appreciate your Q's.

when you see people frequently who are doing these trades more or less indiepenently but also simultaneously, it makes for great conversation.

I only meet every two weeks with them but they meet in between weekly.

It is not like the ET threads. It is a very real world where they are doing this.

In the "putting the pieces together" cantasia and its companion illustrated document that is an actual person, Tom, who is causing his capital to go to 10 times his starting capital in a fixed matter of time. we took 31 picures of the "batting order that day to see the action. In fact you see the hand written notes to set the days of an entire week up on a Sunday morning.

This can be done twice in any year.

My world is getting people to do this and then they can be free to help out others.

This year I will finish writing, etc. I hope that the pragmatic examples of real people doing this in a real place become very helpful to others.

Lo (1999, 2005, 2005) has figured out that people are capable (Adaptable). He is unable to address how because of intellectual constraints, but that is okay since others have done that. I will also shift back into an academic orientation as a sidebar and prove in our paradigm. Frankly, it could have been done long ago had I felt the urge. It is perhaps better to follow up on Lo's AMH (2005) with the pragmatic goods on the amateur retail reality of the potential.
 
Quote from aeliodon:

How do you explain Livermore? You'd think a guy that knows all the ins and outs of the market and has 20+ years experience would never blow out. And since he did blow up then add up all his 'progress' over the years and it adds up to nothing.

How do you explain the persistent under-performance of institutional traders compared to a buy and hold strategy on the S&P 500 over any 10 year performance. And I'm talking about the institutional traders that survive and still under perform. For every one fund that survives, 5 get shut down. What does their progress amount to?

Consider a very intelligent long time poster on ET that had a very consistent record then blew out last fall. What does his progress add up to?

How does one get 10 years of experience out of 10 years of experience? Instead of just repeating year 1, 10 times over.
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Crickets chirping.
 
Quote from aeliodon:

So how do you know if you're making progress or not if you can't judge by the P/L #s alone? [/B]
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If your asking that question, you are. :D

However, we do this to make money...
 
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