Price should take off after you enter

[Mtrader]

You can easily proof and check if trading is pure luck.

If your results look like the chart below you are trading based on luck.

If the center of your chart on the x-axis (where now the 0 point is) is moved more to +4, then it is not luck.
For me personally my distibution of returns is irregular, not smooth like the first chart. And 0 on the x-axis is far to the left. my most negative point on the x-axis is -4.76 and the highest plus is above 40. Can somebody explain how that is possible with luck? The amount of data I use is statistically relevant off course, or this discussion would be useless.
If it can be explained as luck, we probably found a huge mathematical error in math. The one who can explain it might be the new Einstein...

 

[birzos]

You can easily proof and check if trading is pure luck.

If your results look like the chart below you are trading based on luck.

View attachment 168029

If the center of your chart on the x-axis (where now the 0 point is) is moved more to +4, then it is not luck.
For me personally my distibution of returns is irregular, not smooth like the first chart. And 0 on the x-axis is far to the left. my most negative point on the x-axis is -4.76 and the highest plus is above 40. Can somebody explain how that is possible with luck? The amount of data I use is statistically relevant off course, or this discussion would be useless.
If it can be explained as luck, we probably found a huge mathematical error in math. The one who can explain it might be the new Einstein...

Do you actually understand how a normal distribution works. You can use skill to position yourself to make use of luck and generate 20%/mth. You can also use luck to put on a trade, most traders, and use skill to unwind it up to 2%/mth, most don't.

The markets don't give a damn what anyone thinks or their opinion, they contain every possibility of every view, creating billions of combinations. You need both luck and skill, what combination that comes in is up to every persons genetics, environment and experience.

On a pure technical basis the OP is correct, the price 'should' take off after the trade is placed, but that is just one view and the markets will happily ignore that signal if another set of dynamics are in play including fundamental or just plain delusion.

Plus, even Einstein admitted he got it wrong creating atomic energy, so there's your bad luck.

 

[Xela]

Price "should" not do anything just because you think it might

That depends on your trading style, strategies and set-ups.

For myself, if my entries are correct, I need the price to move in my direction pretty quickly after entering: if it doesn't, then it's a trade I probably don't want to be in.

This is how the ill informed think

Unfortunately, your dismissive attitude to other traders' experiences and techniques detracts a good deal from the more realistic and interesting observations offered in some of your posts, which puts people off reading them. With remarks like the one above, you come across mostly as dismissive and patronizing. Nobody wants to read that. Which is rather a shame, when you do actually have things to contribute, here.

 

[Mtrader]

Do you actually understand how a normal distribution works.

What is a normal distribution?
https://www.mathworks.com/help/stats/normal-distribution.html?s_tid=gn_loc_drop
Isn’t that the chart I posted?

You can use skill to position yourself to make use of luck and generate 20%/mth. You can also use luck to put on a trade, most traders, and use skill to unwind it up to 2%/mth, most don't.

The markets don't give a damn what anyone thinks or their opinion, they contain every possibility of every view, creating billions of combinations. You need both luck and skill, what combination that comes in is up to every persons genetics, environment and experience.

There are many postings here saying that trading is purely luck. For me trading is trading, not gambling so trading has nothing to do with luck. If it would be luck the distribution would be like the chart I posted. Luck (good or bad) is an event that you did not expected or counted on. I my calculations probablities are part of the sytem, so luck is part of the sytem and so not unexpected. Even the impact of this luck is included in my testing and results.

I wrote that my chart of distribution looks completely different. This is proof for me that it is not about luck. You call it “skills”. The point is that you as a trader should develop a system that mathematically can proof that in the long run you will ALWAYS make money.

On a pure technical basis the OP is correct, the price 'should' take off after the trade is placed, but that is just one view and the markets will happily ignore that signal if another set of dynamics are in play including fundamental or just plain delusion.

Plus, even Einstein admitted he got it wrong creating atomic energy, so there's your bad luck.

I never said anything about the OP, so I don’t understand why you use that statement in your reaction to my posting? When or how the prices should start to move is irrelevant. Your trade should end profitable, that’s all. And if possible the trade should run like you calculated it should run in the system you are applying. As this would confirm the validity of your system.

 

[birzos]

What is a normal distribution?
https://www.mathworks.com/help/stats/normal-distribution.html?s_tid=gn_loc_drop
Isn’t that the chart I posted?



There are many postings here saying that trading is purely luck. For me trading is trading, not gambling so trading has nothing to do with luck. If it would be luck the distribution would be like the chart I posted. Luck (good or bad) is an event that you did not expected or counted on. I my calculations probablities are part of the sytem, so luck is part of the sytem and so not unexpected. Even the impact of this luck is included in my testing and results.

I wrote that my chart of distribution looks completely different. This is proof for me that it is not about luck. You call it “skills”. The point is that you as a trader should develop a system that mathematically can proof that in the long run you will ALWAYS make money.


I never said anything about the OP, so I don’t understand why you use that statement in your reaction to my posting? When or how the prices should start to move is irrelevant. Your trade should end profitable, that’s all. And if possible the trade should run like you calculated it should run in the system you are applying. As this would confirm the validity of your system.

It's not complicated. A normal distribution is summary(-4) detail(0) conclusion(4), a few start from the summary working forwards (the smartest), a few start from the conclusion working backwards (the most difficult), and most start from the detail trying to understand the summary and conclusion (the most risky).

No one can predict the markets, it is ostensibly luck that it moves to where you think it will, the skill is positioning yourself for the highest probability of the move with the lowest risk. Most have this bizarre belief that they are predicting the markets and have become some sort of deity.

"so trading has nothing to do with luck" but "Even the impact of this luck is included in my testing and results.". That is known as an oxymoron, your problem is simple, you can't differentiate between direct "luck" (not your focus) and indirect "luck" (your focus) on the normal distribution. The end result is the same, just a different flow, funny though.

"I never said anything about the OP, so I don’t understand why you use that statement in your reaction to my posting?" - because normally it's polite to relate it to the person who spent the time asking the question in the first place, something apparently missing in these forums.

 

[wtfauoa]

That depends on your trading style, strategies and set-ups.

For myself, if my entries are correct, I need the price to move in my direction pretty quickly after entering: if it doesn't, then it's a trade I probably don't want to be in.





Unfortunately, your dismissive attitude to other traders' experiences and techniques detracts a good deal from the more realistic and interesting observations offered in some of your posts, which puts people off reading them. With remarks like the one above, you come across mostly as dismissive and patronizing. Nobody wants to read that. Which is rather a shame, when you do actually have things to contribute, here.

Trading the finial markets successfully requires a lot more than luck and styles. One of the main reasons why most most who try fail, is due to listening to others talk about things that really have no bearing on what you are trying to achieve, which is, make money consistently in the market/s you have decided to trade. It really is funny when you have gone thru it, as you know exactly what others are doing having done so yourself in the past. It will never change for the majority, and very few can enter this game and start off the right way from day one. The reasons why are many, but most of them are down to pure ignorance and the inability to read and understand the correct material. Even if one came across the correct material at the start, the chances are they would just dismiss it and move on to the usual multitude of approaches and styles that are common place on this site, and all other such sites. There is no magic in trading or investing, but there is a fundamental requirement to understand how the financial markets work, and how to manage risk in such dynamic environments. Without the proper risk management approach, the best of understanding will be of no use what so ever. One requires the other, much like procreation. If the new fad of same sex marriage takes off, then who knows what the future will bring.

Oh, what I say or how I say it does not make one little bit of difference. All that should concern a person who is trying to make money trading or investing, is understanding what they are doing, and how to do it correctly, as mentioned above.

 

[wtfauoa]

It's not complicated. A normal distribution is summary(-4) detail(0) conclusion(4), a few start from the summary working forwards (the smartest), a few start from the conclusion working backwards (the most difficult), and most start from the detail trying to understand the summary and conclusion (the most risky).

No one can predict the markets, it is ostensibly luck that it moves to where you think it will, the skill is positioning yourself for the highest probability of the move with the lowest risk. Most have this bizarre belief that they are predicting the markets and have become some sort of deity.

"so trading has nothing to do with luck" but "Even the impact of this luck is included in my testing and results.". That is known as an oxymoron, your problem is simple, you can't differentiate between direct "luck" (not your focus) and indirect "luck" (your focus) on the normal distribution. The end result is the same, just a different flow, funny though.

"I never said anything about the OP, so I don’t understand why you use that statement in your reaction to my posting?" - because normally it's polite to relate it to the person who spent the time asking the question in the first place, something apparently missing in these forums.

There are different levels of ignorance, and different interpretations. For example, most are ignorant as to how the financial markets work, and this is due to what they believe to be true, which can be based on many things such as upbringing and environment. Then, many think I am ignorant by the way I post, but all I am doing is replying in a manner that is required. If someone posts something that warrants a reply in a certain way, then I will post that way. It is like trading the markets, I will react as required.

It really is funny, you surely identified that bit correctly.

 

[pinabetal]

Institution move the markets. Generally speaking we don't. For instance the ES is more often than not traded via computers algos run by the institutions...banks..hedge funds...hft firms...etc. The institutions are battling each other for big bucks. They could care less about us. our volume is so little it is laughable to them. Since, these are very smart traders they run bullish and bearish algos until one side gives in and the market takes off. The market runs in a 40% to 60% probabilty range. All one needs is to Have the skill to recognize who is in control..the bullish firms or the bearish firms and then follow their lead. High probabilty trades are low reward. Low probability trades are generally high reward when they work out.

 

[llIHeroic]

High probabilty trades are low reward. Low probability trades are generally high reward when they work out.

Generalizations like that really come down to a function of the metrics an individual uses to analyze the market.

On the contrary, my preferred entries are when momentum is completely extended and exhausted in a specific direction, at the moment when majority of volume shifts to the opposite sentiment. In essence this ends up being a turning point in respect to my level of resolution.

So at that point is the greatest reward, since any other entry would be late and have missed some price movement of the segment already.

And concurrently those turning points are the highest probability entries with the least risk, for me. Any later entry I either have to take on more risk or get squeezed out of correct entries that go back to test near the resistance again from time to time, to limit the damage for the times when I am wrong.

Like bizros mentioned, there are so many different possibilities in trading that it's difficult to even discuss fundamentals of successful trading, because many times there is no one "right answer." And so often we can end up inadvertently comparing apples to oranges. It's up to each individual to develop coherency within his own perspective of the market.

 

[pinabetal]

Generalizations like that really come down to a function of the metrics an individual uses to analyze the market.

On the contrary, my preferred entries are when momentum is completely extended and exhausted in a specific direction, at the moment when majority of volume shifts to the opposite sentiment. In essence this ends up being a turning point in respect to my level of resolution.

So at that point is the greatest reward, since any other entry would be late and have missed some price movement of the segment already.

And concurrently those turning points are the highest probability entries with the least risk, for me. Any later entry I either have to take on more risk or get squeezed out of correct entries that go back to test near the resistance again from time to time, to limit the damage for the times when I am wrong.

Like bizros mentioned, there are so many different possibilities in trading that it's difficult to even discuss fundamentals of successful trading, because many times there is no one "right answer." And so often we can end up inadvertently comparing apples to oranges. It's up to each individual to develop coherency within his own perspective of the market.

Three factors: probability, reward, risk. Smart money...institutions...etc drive price movement. They know the market trades in a 40% to 60% band of probability. They will be operating within this band. That is, there will be bullish and bearish institutions placing trades within this band creating pressures to force the market in the direction they each would like it to go. Finally, one side wins out and you have a b.o. And perhaps protracted move for a while. Then comes p.b......etc

To trade successfully an institution has to take the other side of ones trade. So if one is shorting an institution generally has to take the other side of ones trade. However, other institutions are taking the other side of that institution (for their own reasons). Therefore, if one has the skill to bottom pick or top pick ...as you seem to imply...with your turning point senario then yes you will have a high probabilty trade. However, if you have high probabilty and low risk you cannot have high reward (generally speaking.. there are exceptions) simply because the institutions are too smart. They will not let you have high reward. Or they would all be doing it too. There are, always, bullish and bearish institutions in every senario. They are constantly trying to move the market in their favor. They simply will not allow a high probabilty, high reward, low risk trade to happen (normally). These three factors need to be taken in consideration on any trade. If the trade looks like it will probally work..60% chance then most of the time one will have to settle for a lower reward. If it looks like it won't work i.e. Low probability...high risk...then if it does work you will have a bigger reward. It is very difficult to have the perfect trade (i.e. Low risk, high probability, high reward) consistently. Occasionally, it will happen but not on regular basis or all would do it.