Nearly Random Entry vs a High Probability Entry
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...until you are constrained either by your own account or by the maximum potential for that strategy that the market will support before returns start to go downhill.
In general the shorter-term the strategy, the quicker returns go downhill by adding more trades or additional contracts. Adding additional markets is a good way to get around this.
The point I failed to make, and which is true of any system is that if this natural market tendency were minimized or absent for one reason or another, then damir's system would either have far less profitability or it might even fall apart. But I think that point is obvious. Assuming the market tendency stays intact, the system should continue performing well.
Going from summer low volatility to fall high volatility (maybe) could upset the apple cart. Time will tell.
As a local I traded like Damir for years. You can't get much more random than just mindlessly bidding and offering at every tick trying to get "the edge". Naturally on a probability basis about a third of those trades are golden, a third are in the midst of chop, and a third are garbage. The natural inclination on the garbage trade is to wait for percieved maximum range expansion against you and then put more on. Then as TriPack hopefully thinks, a "natural" rotation will take place and allow you to scale back out at a profit. On normal distribution days this strat works like a charm. Even on trend days there may be brief distribution phases. But in general as Damir showed yesterday and today, markets that refuse to wholeheartedly revert to the mean are deathtraps for anti-trend strategies. All it takes is to get 4x your normal starting size in hopes of a meaningful reversal, coupled with several days of similar, take no prisoners trending, and it's simply amazing at how much of those 57 winning trades can be eaten away in a few sessions.
Yes, index futures are particularly forgiving markets compared to individual equities or as many of you have seen, Treasury Bond futures. However profiles are completely random. Literally any combination of prices can and will occur in any defined interval. Hell the Dow could break down hard 500pts to-morrow and on a pct. basis not even be in the top 10 worse days. But I bet for any trader who believes that prices always retrace and fill, it will be one of his 10 worst days!
Yes, index futures are particularly forgiving markets compared to individual equities or as many of you have seen, Treasury Bond futures. However profiles are completely random. Literally any combination of prices can and will occur in any defined interval. Hell the Dow could break down hard 500pts to-morrow and on a pct. basis not even be in the top 10 worse days. But I bet for any trader who believes that prices always retrace and fill, it will be one of his 10 worst days!
Nearly(?) Random : what "nearly" means here ?
Frequently polemic comes from definition of term. I don't have time to read all the threads of the debate, I only read a few rapidly as usual, and in the few I read I didn't see any OPERATIONAL description of the entry. What I want to know is the detailed description of the entry setup without a priori qualifying it as random or not random .
Because I've been a scalper when I began on futures market I guess also "nearly" what Dameer means by random
A scalper can enter a market so frequently that he would declare that his entry can be random but strictly it is not really random. Then it would become a debate between scalp or not scalp which is one of the usual (and perhaps useless ) debate.
"Nearly" anybody could scalp successfully for several months and even years because the probability of making a small gain is very big (so the percentage of win over loss must be well above 50% contrary to swing so that 80-90% is not extraordinary). I already gave the example of a guy I know who was totally novice who scalped on sp500 making gain nearly all the time until one day he lost 1 million: after that he understood what efficiency of market means
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Frequently polemic comes from definition of term. I don't have time to read all the threads of the debate, I only read a few rapidly as usual, and in the few I read I didn't see any OPERATIONAL description of the entry. What I want to know is the detailed description of the entry setup without a priori qualifying it as random or not random .
Because I've been a scalper when I began on futures market I guess also "nearly" what Dameer means by random
A scalper can enter a market so frequently that he would declare that his entry can be random but strictly it is not really random. Then it would become a debate between scalp or not scalp which is one of the usual (and perhaps useless ) debate."Nearly" anybody could scalp successfully for several months and even years because the probability of making a small gain is very big (so the percentage of win over loss must be well above 50% contrary to swing so that 80-90% is not extraordinary). I already gave the example of a guy I know who was totally novice who scalped on sp500 making gain nearly all the time until one day he lost 1 million: after that he understood what efficiency of market means
.Harry', it would be much easier to understand this thread if you did take the time to read it. Briefly, the community participating in this thread, save one, accepts the term random entry to mean any entry not derived from some type of analysis. This type of entry, as stated in the thread, might be from a random number generator, a cat walking on a keyboard, the lotto ball numbers, etc.
In this community, for the purpose of this discussion, the generally accepted definition of random entry is as above. However, the 'one' referenced previously is unable to accept the local generally accepted definition. So to facilitate the discussion, the thread title was changed.
Again, I encourage you to read the thread for a complete understanding.
In this community, for the purpose of this discussion, the generally accepted definition of random entry is as above. However, the 'one' referenced previously is unable to accept the local generally accepted definition. So to facilitate the discussion, the thread title was changed.
Again, I encourage you to read the thread for a complete understanding.
I can't understand why everyone is so hung up on the precise definition of "being able to trade with random entries" means!
Okay, so the guy's entries won't be 100% pure, unadulterated randomness. But it seems that's the only thing some of you are willing to settle for. (Btw, come on, quickly: how many "truly" random processes do you guys know of?)
According to Size's demands, damir would have to enter a new trade the very second he exited an old one (randomly long or short), but then there'd be no point exiting the old one because the same price is going to be the new entry so why not just save on the commission.
If "it doesn't matter to me how the hell my entries are determined, keeping in mind my money mangaement principles, which might only allow me X trades per Y time" isn't good enough for you guys -- in the sense that it really puts the value of entries under the microscope -- then you're being unreasonable beyond words.
Okay, so the guy's entries won't be 100% pure, unadulterated randomness. But it seems that's the only thing some of you are willing to settle for. (Btw, come on, quickly: how many "truly" random processes do you guys know of?)
According to Size's demands, damir would have to enter a new trade the very second he exited an old one (randomly long or short), but then there'd be no point exiting the old one because the same price is going to be the new entry so why not just save on the commission.
If "it doesn't matter to me how the hell my entries are determined, keeping in mind my money mangaement principles, which might only allow me X trades per Y time" isn't good enough for you guys -- in the sense that it really puts the value of entries under the microscope -- then you're being unreasonable beyond words.
Huh? You get in - you take profit or you take loss - take as long as you want. You get in - you take profit or you take loss - take as long as you want. You get in - you take profit or you take loss - Take as long as you want. Continue in this manner. At no point are you adding to a position and are restricted by your account.
Like I said above, you get in, you get out, you get in, you get out. At no time are you adding to your position, in your case, or in mine.
The basis of this thread lies in the most basic of mathematics, and the fact that people are arguing it's validity shows a real lack of understanding of basic probability theory. If your Expentancy of a profit from entering at a particular point is 50%, no amount of money management, once you take in slippage and comissions, will turn your expentancy on the trade positive. If you believe otherwise, open an account with Susan, allow people to look in to show them that you are making the trades, and away you go? What is so hard about that?
I can't believe I have spent all this time on this thread. This thread is about as useful as the God threads.
nitro
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