Is Trading Just Guessing?

[ric3bowl]

Quote from lwlee:

Another thing, at what point does gambling become investing

The only investing going on in the markets is from the activities of disciplined, long-only value investors. Most other "investing" going on in the markets is speculation. Not making a judgement call on speculation, but it's not investing.

But that's just semantics. For speculators, the point they become successful is probably when they have fleshed out their edge and have positive expectancy. That's when the "gambling" becomes "professional." But a speculative trade is never investing.

 

[N54_Fan]

Quote from intradaybill:

I like the dogmatic way some people present their own views. How do you know there aren't people who experience precognition, consistently? Maybe there are.

I KNEW you would say that...

 

[intradaybill]

Quote from N54_Fan:

I KNEW you would say that...

Here is a proof of precognition

 

[oldtime]

A similar question is what role does luck play in trading? The simple use of stops can protect you against bad luck and open you up to good luck. So theoretically, even if you are just guessing, you have limited loss and unlimited profit potential.

 

[jnbadger]

Quote from intradaybill:

I like the dogmatic way some people present their own views. How do you know there aren't people who experience precognition, consistently? Maybe there are.

Consistently? As in day after day? Perhaps, but the rarity of such a thing seems like it would be beyond extreme.

 

[syswizard]

Quote from oldtime:

A similar question is what role does luck play in trading? The simple use of stops can protect you against bad luck and open you up to good luck. So theoretically, even if you are just guessing, you have limited loss and unlimited profit potential.

Be careful with this....don't imply that close stops are going to make you a great trader. Instead, you are likely just to start losing a little...very consistently.
Stop placement I think is the real trick to this game.

 

[ammo]

Quote from macattack:

Isn’t the decision to enter a trade nothing more than a guess?

Guess: To predict (a result or an event) without sufficient information.

No matter if you’re using an automated fancy system, 10 monitors, your gut, the moon, technical analysis, fundamental analysis, breakouts, support/resistance, Fibonacci levels,
trendlines, Bollinger bands, oscillators, the moon………….everybody is just guessing aren’t they?

Some genius from MIT can spend 10 years developing some extremely complex system at a cost of a million dollars, & it would still probably do no better than some guy with a high school diploma who Has 20 years of experience & the ability to make calm, logical “guesses”.

It reminds me of sports betting. Even the sportscasters on tv who should know way more than anyone else can’t even predict half the games right each week. You would think they could, but like the markets, there are so many variables you just don’t know.

It seems like the keys in trading have more to do with experience, risk control, bet size, having a strong mind, etc. As far as entering a trade everyone, from the little guy to the
multi-million dollar corporation, seem to have about the same winning %’s when successful……….because for everybody it’s the same……….it’s just a Guess !

its guessing with a cheatsheet,if you see ants,you put your picnic blanket somewhere else, a blind man wouldn't have that advantage,in this case eyesight would be an edge,it's a bad setup and you avoid it,the more setups you see,market tipping it's hand, the better guesser you become

 

[ammo]

Quote from intradaybill:

I like the dogmatic way some people present their own views. How do you know there aren't people who experience precognition, consistently? Maybe there are.

if you hand chart the market profile in 30 minute bars,it keeps you in the market,flat or not you are in and your hand will tell you where the market is going 3 or 4 times a day,used that as an example of how precognition is not far fetched at all,the more you are immersed in the market,the better the feel

 

[oldtime]

Quote from syswizard:

Be careful with this....don't imply that close stops are going to make you a great trader. Instead, you are likely just to start losing a little...very consistently.
Stop placement I think is the real trick to this game.

getting back to horse betting, what if you could take half your bet off midway through the race? Then you make that slight move away from guessing into money management and you've narrowed the amount of data you need to analyse. It gets pretty simple at that point. How many horses in last place halfway go on to win place or show?

 

[oldtime]

or for that matter, what if you could add to your bet halfway through the race? What started out as just a guess now has a very good chance of finishing quite well.