Nearly Random Entry vs a High Probability Entry

[OddTrader]

Quote from illiquid:



Buy randomly, set your stop loss at 20 points and target .5 point, you will find that your success rate in profitable trades will be rather high .

The whole point about seeking proper entries is limiting risk + maximizing reward -- that is what an edge is all about.

Very good point indeed , particularly when many traders say the trending part of any market would be about only 20%, and sideways 80% .

I suppose it would be highly possible that during a sideways market (where a trend trading method would be probably unprofitable), a trader using any random (by whatsoever definition) entry together with competent money management skills might still make profits frequently, even very similar to (if not better than) many others.

Perhaps this topic should include the above-mentioned four factors: Profit volume, Risk volume, Long-trem reliability, and Market characteristics (such as whether a trending or sideways market).




Just a thought!

 

[dbphoenix]

Quote from swoop[TR]:



Semantics. In the end it's all random, the universe of outcomes stretches to infinity with time. Whether or not your universe is constricted to a few potential values in a certain time period still makes the outcome random, or precisely unforecastable if you would rather.

Within the context of trading, it's not semantics. The fact that the outcome of a particular trade is unknowable does not make the outcome random, nor does it make one outcome of equal probability to another.

The trader must develop a system that has a higher probabilty of success over failure. Even though the outcome of a particular trade is unknowable and may move in a direction opposite to what is expected (the expectation being a result of the system), the trader knows that over n trades, he will succeed.

 

[swoop[TR]]

Quote from dbphoenix:



The trader must develop a system that has a higher probabilty of success over failure. Even though the outcome of a particular trade is unknowable and may move in a direction opposite to what is expected (the expectation being a result of the system), the trader knows that over n trades, he will succeed.

I agree. Now ponder on this:
What is the probability that your strategy will eventually fail over time?

Answer: 100%

 

[Gordon Gekko]

what a joke this thread is.

nitro, you know you are never going to open up a real account with this guy, so why bother making the suggestion?

dbphoenix, why are you nitpicking the definition of random???! i shouldn't be surprised, actually. is anything REALLY random?? for the purpose of this discussion, anything close to the concept of "random" would suffice.

 

[damir00]

Quote from Gordon Gekko:

what a joke this thread is.

then why are you still here, BlowUpBoy.

no matter. the lotto suggestion was excellent, in a couple of days i'll launch LottoBoy and without a doubt he will kick your sorry butt all over ET.

lol.

you're about to beaten silly by a lottery ticket, GG.

 

[dbphoenix]

Quote from swoop[TR]:



I agree. Now ponder on this:
What is the probability that your strategy will eventually fail over time?

Answer: 100%

Depends on how adaptable the strategy is.

 

[Gordon Gekko]

Quote from damir00:

you're about to beaten silly by a lottery ticket, GG.

answer this direct question:

true or false: do you believe one entry can be no better than another?

 

[damir00]

Quote from Gordon Gekko:

true or false: do you believe one entry can be no better than another?

that's not the question at issue. in fact, that's not even close. do you want to try again?

 

[Gordon Gekko]

Quote from damir00:



that's not the question at issue. in fact, that's not even close. do you want to try again?

Quote from damir00:

there is no edge in picking entries, none whatsoever. the only edge out there is money management, and the solution to that comes from you as a trader: what are you comfortable risking, holding etc.

what is it then? i didn't bother reading all 13 pages of this bs.

 

[damir00]

what, i'm here to serve you? do your own homework.