Predicting is ***Unavoidable***
- Thread starter aeliodon
- Start date
Thanks for all the compliments but you missed the point of my post. Here's what I meant with my table:
If Jack's current market position is LONG, then his conclusion of CONTINUE (made NOW, in the present) = a PREDICTION that the market will rise in the FUTURE.
If Jack's current market position is LONG, then his conclusion of CHANGE (made NOW, in the present) = a PREDICTION that the market will fall in the FUTURE.
If Jack's current market position is SHORT, then his conclusion of CONTINUE (made NOW, in the present) = a PREDICTION that the market will fall in the FUTURE..
If Jack's current market position is SHORT, then his conclusion of CHANGE (made NOW, in the present) = a PREDICTION that the market will rise in the FUTURE.
When Jack makes his conclusions he's either correct or he's not, but he certainly doesn't know at that time what the market WILL do, and by either leaving his current position in place or reversing it, he's posturing himself for what he BELIEVES is the MOST LIKELY FUTURE market action. Which is predicting, no matter what you call it.
If Jack's current market position is LONG, then his conclusion of CONTINUE (made NOW, in the present) = a PREDICTION that the market will rise in the FUTURE.
If Jack's current market position is LONG, then his conclusion of CHANGE (made NOW, in the present) = a PREDICTION that the market will fall in the FUTURE.
If Jack's current market position is SHORT, then his conclusion of CONTINUE (made NOW, in the present) = a PREDICTION that the market will fall in the FUTURE..
If Jack's current market position is SHORT, then his conclusion of CHANGE (made NOW, in the present) = a PREDICTION that the market will rise in the FUTURE.
When Jack makes his conclusions he's either correct or he's not, but he certainly doesn't know at that time what the market WILL do, and by either leaving his current position in place or reversing it, he's posturing himself for what he BELIEVES is the MOST LIKELY FUTURE market action. Which is predicting, no matter what you call it.
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Excellant points.
Some get the meanings of predictions & probabilities confused;
but fortunately proper use of the two words arent necessary to profit
You are most welcome, but I didn't miss the intent of your post. I understood it perfectly. In fact, I understood it so clearly, I linked to this thread from the Futures Journal. You provided the perfect example of how an ever-so-slight shift in vantage point can alter what one 'see's with respect to all things - not just trading and the markets. I realize you do not 'see' things in the same fashion as I. For you (and others) this discussion resembles nothing more than people quibbling over semantics. However, this has nothing to do with semantics.
If one knew with 100% certainty that after an Event (we will call it 'Event A') only three possible outcomes could result (End 1, End 2, End 3) and that each and every time an Event A occurred, one of the three possible outcomes also occurred. Also, for each (and every ) Event A which occurs End 1, End 2 and End 3 materialize some distance from Event A. Now, we do not know (and can never know) which of the three 'End Effects' will materialize, but we do know with 100% certainty that one of the three will occur.
In such a scenario, prediction, no longer plays a role. We do not need to predict which End Effect will result. We only need to recognize the point in time in which it occurs. As such, we operate in the Now constantly monitoring for these 'End Effects' (1,2 or 3). Each of the three End Effects requires the trader to take a different action (Reverse, Exit or Hold). As such, Each End Effect provides the trader with a different level of profit. However, each End Effect provides some level profit.
Since one knows the three possible End Effects (in advance ) and one knows variable levels of profit exists between Event A and Each of the Three End Effects, one, will not, one does not, need not predict future outcome. Which end effect materializes doesn't matter as each provide profit.
Now, having said that, a trader certainly wants, hopes (maybe even prays) for the End Effect with the largest profit. However, this too is not the same as predicting. What a trader wants to have happen, and what actually does happen (especially in the markets) are often two different things. However, no matter what the trader, wants, hopes or desires, One of three End Effects will certainly materialize - always and 100% of the time.
In the above example losses result from a trader incorrectly 'seeing' an Event A occur (as Event A often resembles other events which the trader should ignore). again, with time (and experience) a trader (of any method) experiences fewer errors.
Someone of Jack's experience has far fewer errors than a beginning level trader. Either way, Jack (or the beginning trader) doesn't (or more appropriately shouldn't ) predict even if their conclusions were correct. It simply isn't necessary. The market instantly tells the trader (of any experience level) whether or not they used the correct data set or not, whether they reached the correct conclusion or not, and most importantly, whether they sit on the right side of the market or not.
As a result, prediction is not a necessary component of this type of trading. If one used the correct data sets to reach the correct conclusion, the market responds accordingly. If one did not use the correct data sets (and as a result reached an incorrect conclusion) the market will also respond. The trader does not need to predict that they used the correct data sets. The market instantly lets them know. Once a trader knows which (correct or incorrect), the trader takes the appropriate action. If correct - hold. If incorrect - reverse.
Again, I realize many do not 'see' the market in such a fashion, and for them (as long as they continue to profit), I see no reason for them to change their outlook. However, whatever outlook one has, this discussion is as far from a quibble over semantics as one can get.
Good trading to you.
- Spydertrader
Spyder,
A good post and I trade in much the same way (I never know which of the possible things hsi can do it will do and I try not to care).
But, going back to the original post, we are both still relying on a prediction that the real time sequence results will generate a similar profit to that the past has shown.
So, fine, you attempt and/or succeed in removing active prediction from your operational activity but prediction of future performance is what allows you to do so.
You're right about one thing, for YOU this is not about semantics... it's about pretending that one can KNOW the future, if only one monitors the "correct" data... and I suppose you (and Jack) want newbies to believe that you can teach them how to do just that?
You said you linked to my post in your futures thread and what you wrote there says it all:
For those having difficulty with Anticipation vs Prediction, please review this post. Continuation vs change are not tied to 'odds of success' in the future. Reaching the correct conclusion by monitoring sufficient (and correct) data sets one 'permits one to know what comes next.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1400887#post1400887
Anyone claiming it's possible to KNOW what comes next in the markets is either ignorant, delusional or a fraud.
You said you linked to my post in your futures thread and what you wrote there says it all:
For those having difficulty with Anticipation vs Prediction, please review this post. Continuation vs change are not tied to 'odds of success' in the future. Reaching the correct conclusion by monitoring sufficient (and correct) data sets one 'permits one to know what comes next.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1400887#post1400887
Anyone claiming it's possible to KNOW what comes next in the markets is either ignorant, delusional or a fraud.
If we know that after event A, only B,C,D can occur, and we see C occur, and this causes us to close a trade, or open a new trade, or whatever, this begs the question WHY?
Because you predicting based on past patterns and you know its to your benefit.
Still semantics, still prediction.
If you take action, and open a new position, your are predicting. Simply because you have encapsulated it into a mechanical set of rules based on what you see NOW doesnt mean there is no prediction.
If there truly wasnt any prediction, there would be no action on your part.
Because you predicting based on past patterns and you know its to your benefit.
Still semantics, still prediction.
If you take action, and open a new position, your are predicting. Simply because you have encapsulated it into a mechanical set of rules based on what you see NOW doesnt mean there is no prediction.
If there truly wasnt any prediction, there would be no action on your part.
I just read spydertraders reply.
the market lets him know which dataset.
Please expand on this. I know you guys are monitoring the market with trendlines and volume analysis. And when there is good movement and good volume trendlines sometimes offer magical trades.
But when the markets chop they can chop trendlines to pieces.
Are you willing to reverse 5-10 times in a range on a choppy day to be on the right side of the market to get to the other trendline and maybe harvest for 2-3 s&p points.
to me it is the same problem that Jack faces when he made up his junk about rockets and putting tape on your monitor to block out the mid zone on his stochastics. Works great on trend sessions, but loses money most decades.
the market lets him know which dataset.
Please expand on this. I know you guys are monitoring the market with trendlines and volume analysis. And when there is good movement and good volume trendlines sometimes offer magical trades.
But when the markets chop they can chop trendlines to pieces.
Are you willing to reverse 5-10 times in a range on a choppy day to be on the right side of the market to get to the other trendline and maybe harvest for 2-3 s&p points.
to me it is the same problem that Jack faces when he made up his junk about rockets and putting tape on your monitor to block out the mid zone on his stochastics. Works great on trend sessions, but loses money most decades.
Give yourself a 30 second moment and consider "If you take action, and open a new position" which is your phrasing.
You are outside the market and are coming into the market to begin to focus on getting out of the market.
Think for a moment about what it is like for a person who is in the market and striving to always stay in the market and be making money.
If you conclude that it is different than the trading life you experience, then I hope that you may consider thinking about the consequences of operating out of this different place.