Predicting is ***Unavoidable***

[kiwi_trader]

Quote from traderdragon2:

This is a worthless semantic argument.
Anyone who trades with the goal of making money is predicting in one way or another, there is no way around it.

They will try to deny it by using different synonyms for it, but its still predicting.

You dont have to predict direction to be predicting either. Arb traders, pair traders, trend traders, all predict in one way or another or they wouldnt be placing their bets (Assuming they are not complete idiots)

Yes, its a little like any religious argument.

Those who have a non-statistical definition of prediction (or are worried about the psychological consequence of being married to a position) say "no prediction." Those with a statistical view point say "we all predict."

To trade a system implies confidence based on the prediction that future will to some extent follow past if our testing was valid. The wise system trader will of course monitor it to see if the prediction is starting to fail.

 

[PointOne]

Quote from kiwi_trader:

Yes, its a little like any religious argument.

Those who have a non-statistical definition of prediction (or are worried about the psychological consequence of being married to a position) say "no prediction." Those with a statistical view point say "we all predict."

To trade a system implies confidence based on the prediction that future will to some extent follow past if our testing was valid. The wise system trader will of course monitor it to see if the prediction is starting to fail.

Hi Kiwi

I think it is actually more subtle than that. When Jack says he does not predict he really means he does not predict. He doesn't need to. All he needs to assess is if the vectors, now, show continuation or change.

Of course after years of experience he may have more than an inkling of price direction but this is not used in formulating his decisions to act. This is really important to get down.

For myself I'm still limiting profits by laying off risk ASAP - this is what I am working on. Spot on Jack, again.

 

[ProfLogic]

Quote from Dustin:

Most of us predict, but it's the trade management afterwards that really matters. A 50/50 win rate can be extremely profitable if your wins are 2-3 times your losses.

You wouldn't last long at Russian Roulette.
A 50/50 win rate is psychologically crippling after a while. This is part of the mentality that destroys traders over time. That and that one word in your last sentence . . . "IF".

 

[ProfLogic]

Quote from jack hershey:

"PS Note that Quantum Mechanics throws a sort of monkey wranch into the traditional definition of science, since cause and effect are fuzzy in QM."

Humor, humor humor...lol

rolling etc.

Careful Jack. You will really confuse them if you throw QM into the mix now.

 

[traderdragon2]

Nonsense, he is predicting wether he wants to admit it or not. His IBD style method has a built in assumption that stocks will go up after you buy them. Thats a prediction. He places buy orders because he believes more often than not, he will get to sell at a higher price. Prediction plain and simple. If his method didnt predict the stocks going up, he wouldnt trade it.

Quote from PointOne:

Hi Kiwi

I think it is actually more subtle than that. When Jack says he does not predict he really means he does not predict. He doesn't need to. All he needs to assess is if the vectors, now, show continuation or change.

Of course after years of experience he may have more than an inkling of price direction but this is not used in formulating his decisions to act. This is really important to get down.

For myself I'm still limiting profits by laying off risk ASAP - this is what I am working on. Spot on Jack, again.

 

[kiwi_trader]

Quote from PointOne:

Hi Kiwi

I think it is actually more subtle than that. When Jack says he does not predict he really means he does not predict. He doesn't need to. All he needs to assess is if the vectors, now, show continuation or change.

But that is a statistical prediction.

He has faith that if he repeats the process "assess is if the vectors, now, show continuation or change" and trades that assessment repeatedly then over time it will reward him with profit. He is predicting that repetition of his system will generate profits.

When I go long I don't know if this trade will win but I can predict that if I take 100 of them, over 70% of them will be winners. Just the same as Jack. Just the same as a system trader. He is operating a prediction. And like many here, he seems to be in denial.

But that's part of what makes his ego feel good. Another part is the "joy of stirring"

 

[PointOne]

Quote from kiwi_trader:

He is predicting that repetition of his system will generate profits.

I'd say he KNOWs repetition of his MADA routine DOES generate profits. Subtly and importantly different. (Most people don't really know what know means.)

He's not the only one who bangs on about NOW being all there is. Check out Ed Seykota (I'm sure I don't have to tell you). He's not to everyone's taste, but he is now mainstream having recently been inducted into Trader Monthly's hall of fame

I'm so grateful I didn't get sucked down the miserable R/R route of setups and exit to sidelines trading with its probabilistic hope (drawdowns) and fear (tight stops).

I've read Tharp and Elder(!) for my sins but Seykota and Hershey make more sense to me. Of course, we have all yet to convince Seykota that day-trading is viable.

 

[Walther]

Quote from aeliodon:

You guys stop deluding yourselfs. Almost LMAO when a guy posted he went from a predicting to a non-predicting modus operandi. Really?
You buy, you predict an up move. You sell, you predict a down move. You buy the bid, sell the ask - you predict you will get a fill on both ends. You let the autobot trade and you predict that real time results will match backtested results.
You see a pattern and you trade it and you predict it will continue. You see a pattern change and you trade it and you predict the changed pattern will continue.

Predicting isn't a dirty word an I don't know why its so looked down upon in trading. All of applicable science is based on predicting once the theory its based on is proven. Get real.

I am able to predict tops and bottoms accurately so I agree with you but one still have to know how to read the price and stay with the trend. It is possible to predict majority of intraday tops and bottoms but if you reverse on minor top in uptrend you will not be profitable.

 

[Tums]

Quote from HoundDogOne:

Actually, not true.

When I buy 1000 shares...
I automatically short 1000 shares of something very similar.

I almost NEVER make a directional bet.
That is for amateurs who do not understand the mathematics of trading.

is that arbing or trading?

 

[HoundDogOne]

Quote from Tums:

is that arbing or trading?

Your question inplies that they are distinct.

"Risk arbitrage" is a sophisticated form of trading...
Generally requiring extensive experience and, in 2007, very advanced technology.

It would be fair to say...
That ALL stable trading businesses practice some variation of "risk arbitrage".

As for the people that "claim" they can "predict" anything...
Without some kind of inside info or ultra-close-to-the-market insider position.

LMFAO.

You may survive if that is your goal...
But you will never build a worthwhile business.