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Is Daytrading a Random Event?
- Thread starter LelandC
- Start date
i agree with you. i don't understand why people insist on applying the label "negative thinker" to others who happen to have a different opinion of the odds.
if i say to someone who is about to "fly" from the top of a tall building that his chances of success are slim to none am *i* a "negative thinker"? i think its a dumb distinction. it's simply another opinion of the odds, there is no "negativity". :-/
if i say to someone who is about to "fly" from the top of a tall building that his chances of success are slim to none am *i* a "negative thinker"? i think its a dumb distinction. it's simply another opinion of the odds, there is no "negativity". :-/
Originally posted by cmz1
i am not negative, i am realistic. equating a business venture with trading is flawed. no business has constant wild price swings in their products or inventory. having a positive attitude when your in a business venture will improve your odds of success (customers will want to do business with you, etc.). whereas, having a positive cheerful attitude as a daytrader will do nothing to improve your odds in the market.
The size of the swings is correlated to the size of risk per trade. Big risk, big swings. Little risk, little swings. Same thing for a business. Some businesses have wild profit swings. Some businesses have a flat profit curve. Some businesses make 90% of their money three months out of the year. Some businesses dribble it in day in and day out. Some businesses are conservative, some are aggressive. Hmm, sounds like different trading styles.
Steve Cohen and Marty Schwartz, for example, both managed to make triple digit returns for ten year plus periods with never more than a three percent monthly drawdown. I'd say a three percent fluctuation to the downside isn't too "wild." Were they both just lucky? For more than 20,000 trades in a row? Please explain your take of these results.
A positive attitude has nothing to do with expectation.
Realism is what it's all about, that is my point. In painting all daytraders with a losing brush, you are not being a realist, you are being a pessimist. You wave away countless variables with a brush of your hand.
If you said you didn't know whether it were possible to make money daytrading, I could almost respect that. For you it might not be possible. But to be dogmatic in saying it is futile- especially when there is walking talking evidence against you- just makes no sense.
Faster: I already posted thoughts on randomness question, multiple ones in fact. Last time I checked it was OK if threads took an occasional twist or turn in terms of focus. Baron or Magna please correct me on this if I am wrong.
Originally posted by cmz1
on a side note, books on how to be a great trader are so lame.
these "successful" traders love to share their insight on how they made money trading; and, they are so ready to share this garbage with any fool willing to spend the $20 on their book.
On this point at least, I agree w/ you 100%.
hmmm, i looked again dark. i didn't find anything from you that finally laid to rest those annoying "random-walk theories." {{shrug}} ahhh but what the hell do i know... :-/
Originally posted by FasterPussycat
hmmm, i looked again dark. i didn't find anything from you that finally laid to rest those annoying "random-walk theories." {{shrug}} ahhh but what the hell do i know... :-/
i didn't know the debate rested on the shoulders of my contributions.
but since you are my bosomest buddy, here is a summation for you faster:
markets are mostly "random" in the short term, but somewhere between 1 and 5 percent of the time they present opportunity for precision entry which, when coupled with consistent execution/ logical exits / conservative money management, allows a short term trader to make money over time.
p.s. random walk theories have been laid to rest by the existence of consistently profitable traders. if you say there are no blue daffodils and i show you one, your theory is dead.
Originally posted by darkhorse
The odds of success at trading are similar to the odds of launching a successful new business. Should entrepreneurs throw in the towel?
The odds of success at trading are similar to the odds of sticking to a diet. Should overweight people give in and drown their sorrow with a tub of Haagen Das?
It has always been the case that a minority of individuals possess the talent, drive and knowledge to accomplish things that the majority cannot.
"Most people fail" does not equal "trading is impossible."
"Markets are mostly random" does not equal "markets are totally random."
I can't resist quoting Marty Schwartz' from Pit Bull here:
"....I hate negative thinkers, they are such losers."
I have to agree with Darkhorse...this is solid, logical, thinking.
Marty Schwartz is a legendary trader...he's great.
When people ask him if they should try to make it as a
trader this is what he tells them.
Quote..."I always try to encourage people that are thinking of
going into this business for themselves. I tell them,
think that you might become more successful than
you ever dreamt, because that's what happened to me"
...Marty Schwartz
"markets are mostly "random" in the short term, but somewhere between 1 and 5 percent of the time they present opportunity for precision entry which, when coupled with consistent execution/ logical exits / conservative money management, allows a short term trader to make money over time."
hmmmm, ok. between 1 and 5% huh? ahhh, i don't mean to be a stickler but where did those astonishingly precise figures come from? i'm not trying to be a hard nose about it but when someone tosses out hard figures like this i like to know their origin.
"p.s. random walk theories have been laid to rest by the existence of consistently profitable traders. if you say there are no blue daffodils and i show you one, your theory is dead."
first off it's not my theory. those thoeries come from decades of academic reasearch by qualified experts in the field of finance and whatnot. i am not so quick as you are to fly in the face of such an enormous mass of accumulated knowledge. i like to take things just a bit slower. however i also don't believe the final word has been spoken. a mortal wound has not been inflicted by either camp (not here on ET, and especially not on this thread) so let us not make a pronouncement of death just yet. (unless of course you have something more that you haven't shown us besides "see, he's successful, that proves it!")
hmmmm, ok. between 1 and 5% huh? ahhh, i don't mean to be a stickler but where did those astonishingly precise figures come from? i'm not trying to be a hard nose about it but when someone tosses out hard figures like this i like to know their origin.
"p.s. random walk theories have been laid to rest by the existence of consistently profitable traders. if you say there are no blue daffodils and i show you one, your theory is dead."
first off it's not my theory. those thoeries come from decades of academic reasearch by qualified experts in the field of finance and whatnot. i am not so quick as you are to fly in the face of such an enormous mass of accumulated knowledge. i like to take things just a bit slower. however i also don't believe the final word has been spoken. a mortal wound has not been inflicted by either camp (not here on ET, and especially not on this thread) so let us not make a pronouncement of death just yet. (unless of course you have something more that you haven't shown us besides "see, he's successful, that proves it!")
those are simply a collection of trite phrases. not proof of any sort. and surely not logical, are they? i always thought logic had to do with formulating arguments. i don't see an argument, i see proverbs. proverbs are nortoriously an unreliable form of knowledge. i am not moved by those.