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If edge is hard to get, why traders keep trading?
- Thread starter OddTrader
- Start date
Quote from dozu888:
scored 99% in both math and logic, but only 38% in language (not my mother tongue).
anyway, if the market is 100% chaotic, then that means the price is 0% predictable.. therefore all of us here are 100% wasting our time... that would be 75% ironic, isn't it.
Human behavior is not 100% random. Human behavior drives the market. On surface it is chaotic and random, but underneath there are predictable elements. These elements are the market's 'method' to reach the agreeable price in an auction.
What do you feel when you see the price go up/down/sideways, when you are long/short/flat? Is your emotion 100% random? then you'd be 100% insane wouldn't you?
If we assume that >90% of the participants are not trading out of the mad house, then their behavior would be certain% predictable under these situations -
68.342% chance that a flat trader regrets he didn't buy before the rally
78.34% chance that a long trader regrets he didn't sell before the break
88.324% chance that a short trader will panic to cover when the price go up 27% in a week.
I have more to share if you wonna listen. But you got a taste.
Keep It Statistical, Stupid.
So you took Logic, scored 99% and quote statistics, correct? Interesting considering all logic professors I've met with, taught with and conversed with will soap box the vast differences between the two.
They ALL will tell you that statistics flurish in random variable environments but statistics lose value in constant dynamic environments.
Change your charting from random to dynamic and then come back and try to prove to me that the charts don't amazingly become methodical. Don't worry, I won't hold my breath.
they want to discover it.
after many tries, they find they can not get rich quick
after many tries, they find they can not quit their jobs and go day trading
after manay tries, they find the market is full of betrals, teasing, tricking and manipulations, you never know why it stops its drop at some magic number and starts to bounce hard, or you never know why it stops its nice rally at some seemingly msterious number
after many tries, they find the market is unpredictable, not like textbooks'describations, high higher low higher uptrend move, or low lower high lower...there are lots of msterious move
after many tries, they find an very exciting news may create an exodus of nice rally, they just can not figure out, the news is so good why the market is out
after many tries, they find some market rallies without any stop, day in day out, doubled, tripled , even 10 folds, even 100 folds, and it is still climbing
after many tries, they find some market drops without any rest, day in and day out, even 99.9% value is lost, it is still edging down, they never know
........
there is no ending for the sake of discovery
after many tries, they find they can not get rich quick
after many tries, they find they can not quit their jobs and go day trading
after manay tries, they find the market is full of betrals, teasing, tricking and manipulations, you never know why it stops its drop at some magic number and starts to bounce hard, or you never know why it stops its nice rally at some seemingly msterious number
after many tries, they find the market is unpredictable, not like textbooks'describations, high higher low higher uptrend move, or low lower high lower...there are lots of msterious move
after many tries, they find an very exciting news may create an exodus of nice rally, they just can not figure out, the news is so good why the market is out
after many tries, they find some market rallies without any stop, day in day out, doubled, tripled , even 10 folds, even 100 folds, and it is still climbing
after many tries, they find some market drops without any rest, day in and day out, even 99.9% value is lost, it is still edging down, they never know
........
there is no ending for the sake of discovery
Quote from ProfLogic:
This coming from "Ostrich Man".
I'm so sorry you have such a problem with the English language. You know there are courses you can take at your local Community College to fix that.
If you would like I can give you the name of a VP at Raytheon Corporation that would give you an earful regarding your closed mindedness to simple physics.
Have posted calls . . . you conveniently ignore they exist. I don't need to "twitter" with twits to validate what I do . . . I just trade.
The VP of raytheon is about as relevant as the pope when it comes to markets. i don;t get the point.
i betcha you cant put me in touch with one REAL money manager who uses your methods succesfully for any length of time.
thanks, surf
thanks,
surf
The key is to eliminate psychology all together. Hard to do but can be done.
The edge is that you have to trade emotion free, and eliminate the psychological effect from your entry/exit decisions. The problem with 98% of the losing traders by far, is overtrading (trading too large relative to their equity by betting too big, averaging down, revenge trading, etc.), and letting emotions taking over, eroding any positive expectancy your method may have.
Two ways to accomplish this:
If you have a large capital, trade small and win consistently. This is an easy way and emotion will never be in the picture.
Or
If you have a small capital and try to make a living, trade according to POPâs rules, and you never have large positions on when you are wrong. This is not so easy since for day trading, range is small and action is quick and it is hard to add to good position, and you will have many small losses before you hit a big one.
These are the most useful two books for me on trading (They are all FREE), and every time when I have draw down, I violate the rules in these two books:
Speculation as a Fine Art by Dickson Watts:
http://stockvision.org/books/Dickson_G_Watts-Speculation_as_a_Fine_Art_and_Thoughts_on_Life-EN.pdf
And Phantom of the Pits(POP) by Art Simpron
http://www.trading-naked.com/library/Phantom_of_the _Pits.pdf
Find what ever trading method you are comfortable with and never violate the rules in these two masters, and you will find your edge.
Good trading to all!
The edge is that you have to trade emotion free, and eliminate the psychological effect from your entry/exit decisions. The problem with 98% of the losing traders by far, is overtrading (trading too large relative to their equity by betting too big, averaging down, revenge trading, etc.), and letting emotions taking over, eroding any positive expectancy your method may have.
Two ways to accomplish this:
If you have a large capital, trade small and win consistently. This is an easy way and emotion will never be in the picture.
Or
If you have a small capital and try to make a living, trade according to POPâs rules, and you never have large positions on when you are wrong. This is not so easy since for day trading, range is small and action is quick and it is hard to add to good position, and you will have many small losses before you hit a big one.
These are the most useful two books for me on trading (They are all FREE), and every time when I have draw down, I violate the rules in these two books:
Speculation as a Fine Art by Dickson Watts:
http://stockvision.org/books/Dickson_G_Watts-Speculation_as_a_Fine_Art_and_Thoughts_on_Life-EN.pdf
And Phantom of the Pits(POP) by Art Simpron
http://www.trading-naked.com/library/Phantom_of_the _Pits.pdf
Find what ever trading method you are comfortable with and never violate the rules in these two masters, and you will find your edge.
Good trading to all!
Quote from crash n burn:
the only way to achieve positive expectancy is modeling the market biases and long term structure.
TA or any other similar retail-based mystical predictive approaches will never provide an edge because <b>the market is NOT predictable.</b>
among other, INFLATION is one of the most powerful and widely available biases that can used by any trader to achieve positive expectancy.
so, an edge is not difficult to find but understanding what could be an edge and how to to use it is what seems to blow most trader's minds.
absolute bullshit.
I made a 6 figure living trading a highly leveraged account for over 5 years trading stocks off of t/a.
It worked great until they changed the rules.
In my office at one point in time 12 guys made a living doing the same.
we made 20 - 100 trades a day.
it was not statistically anomaly. It was an edge we had using t/a.
I am sure there are plenty of guys who still make a living using t/a.
the markets are very far from random.
If you have a solid edge, you don't need psychology stuff.
Psychology becomes an issue because you have no edge and your mind begins to question what you're doing as your confidence in your method erodes away.
If you have a solid edge/consistently profitable method, psychology rarely enters the realm. Unless, you're a really weak trader to begin with.
A trader with a great psychological frame of mind and no edge/losing method just confidently pisses away his entire account. Sort of like a perpetual casino gambler with a permanent smile.
No edge=loss of capital & need for psycho shit.
Good edge= money making machine & no need for psycho blab.
Foolish book authors who say...control your emotions, bla, bla, bla, don't realize that a trader who lack emotional control is someone with no edge. No matter how much 'control' he exerts on himself, he's just going to drain away his account in a controlled manner.
Psychology becomes an issue because you have no edge and your mind begins to question what you're doing as your confidence in your method erodes away.
If you have a solid edge/consistently profitable method, psychology rarely enters the realm. Unless, you're a really weak trader to begin with.
A trader with a great psychological frame of mind and no edge/losing method just confidently pisses away his entire account. Sort of like a perpetual casino gambler with a permanent smile.
No edge=loss of capital & need for psycho shit.
Good edge= money making machine & no need for psycho blab.
Foolish book authors who say...control your emotions, bla, bla, bla, don't realize that a trader who lack emotional control is someone with no edge. No matter how much 'control' he exerts on himself, he's just going to drain away his account in a controlled manner.
Quote from Love Trading:
The key is to eliminate psychology all together. Hard to do but can be done.
The edge is that you have to trade emotion free, and eliminate the psychological effect from your entry/exit decisions. The problem with 98% of the losing traders by far, is overtrading (trading too large relative to their equity by betting too big, averaging down, revenge trading, etc.), and letting emotions taking over, eroding any positive expectancy your method may have.
I dont know why people keep throwing the word "Edge" around, because no one really has an edge.
you and a million other people are most likely looking for the same set ups....
just about every system and style of trading is being copied by millions of others. Just find something that works.
the only possible edge you have, is keeping your mental state sharp, and alert, unlike every other noob trader.
you and a million other people are most likely looking for the same set ups....
just about every system and style of trading is being copied by millions of others. Just find something that works.
the only possible edge you have, is keeping your mental state sharp, and alert, unlike every other noob trader.