Probability of success due to chance alone?

Just off the top of my head: if you need to ask, then the chances of your performance continuing over the long run, at least in its current form, is slim to none.

Your performance may have little to compare with pure "chance" thus far (by chance I'm referring to complete random entry), but that question is moot over the long run. You may have had a bullish bias in an upwardly moving market for that period of time, or some trend-following methodology that happened to coincide with a trending period in that market. How you fare when markets change, that is the more important question.

You could tell me you made 10x what you made in the same time period, and the same questions and doubts would still apply. It's just too short a period, with a highly leveraged market (futures). The point is, chance has very little to do with anything when it comes to trading as a profession in the long term. You either know what you're doing or don't know what you're doing (or perhaps, know you don't know what you're doing, and start making progress). Over the long run, the market will weed out those who don't.

Let's not even get started into how devious and deceptive the answers to your questions can get. What if you discovered that, yes, it was all skill? What if you happened upon the perfect setup for the next 2 years in your market? It would be pure skill applied for 24 months, wherein you could multiply your account 10-fold. And then? After you thought you'd had it all figured out, quit your dayjob, and became "full-time", the market will suddenly teach you that you were a one-trick pony. And you're all the way back to square one (or worse even). Trust me, I've been there, and it's a pretty horrible way to find out you actually have no idea what you're doing.
 
Illiquid, you bring up some solid points. But there a couple of reasons why I tend to disagree with your opinion that i dont know anything and that my chances of continuing to obtain my results are slim to none:

First is that I admit, despite having a long experience trading, I freely admit to knowing nothing. I believe I've learned a lot about trading, but like medicine there's just too much to know. I don't know how to describe it well, but a strong healthy confidence coupled with cautious humility and the ability to simplify everything is why I think I've succeeded in life (so far), anesthesiology, and trading.

Second, I learned how to trade consistently and profitably in 2003-2004 though started in 1999. I've already made my beginner's and intermediate mistakes. So my point is I actually have a long trading record. This is the first time however that I am taking trading seriously as I don't have to study medicine as much as before after passing my final exam: board certification in anesthesiology. The point is this past summer was much harder trading than in 2003-4. The fact that I have adapted to the different trading pattern of this past summer compared to 2003-2004 speaks volumes of my ability.

That's why I can only continue to be a discretionary trader - b/c I can adapt to changing market conditions/news without having to reprogram a trading system to adjust (not that I could program anyway).

Bottom line is your opinion is just that - an anonymous internet opinion. For me, my opinion is that I'll keep trading, making money, constantly improve my trading, practicing anesthesia, hanging out with my wife and playing with my son.
 
Oh, don't take it personally, I was mostly referring to myself at that point in my career when I said "no clue what you are doing". I don't have much information at all about what and how you are trading so my post was just generalized based on what little I read. Take it for what it's worth -- a worst-case yet highly probable scenario -- and good luck.
 
Illiquid,

Ego is such a bitch ain’t it

doc wants to be a trader – but doesn’t want to listen to one….

One thing for sure – We both know chance has nothing to do with successful trading


Gotta love it

RN
 
I don’t write much…but was compelled by reading these pages…Bravo Red for saying it perfect!!

Lets reverse the situation:

I open up a walk-in clinic after dabbling ( for a few years) in helping my friends and family get better from illness. Im sure I can cure way over 70% of the patients that see me in my first year- I guess I must have skill as a Dr. right?

We know Red & liquid know better, cause 1 day (in the future) a patient will die from my doings (a blow-up) and/or I will have a string of malpractices (losses)...

and then my ego will realize that im not such a successful doctor that i thought i was!!
 
Quote from masterjaz_99:

Without backtesting, what I would do is roll 3 dice. 1 would be for the hour, 1 for the 10's of minutes, and 1 for the minutes (accepting the fact that only 6 of 10 possible minutes would result). So you roll a 3,2,5. You would place a trade in the third hour of trading at the 25 minute mark. Masterjaz
More...

So if you roll a 6,6,6, you would place a trade in the sixth hour, at the 66 minute mark. What about a 6,6,1, or a 6,6,5?

You certainly thought of that too in the bathroom...
 
Quote from Redneck:

Illiquid,

Ego is such a bitch ain’t it

doc wants to be a trader – but doesn’t want to listen to one….

One thing for sure – We both know chance has nothing to do with successful trading


Gotta love it

RN
More...

lol

true.
 
No I don't take it personally. But I do appreciate honesty.

Strings of bad losses and/or a patient death is part of what we do. There is no way around it in our chosen professsion(s). Fortunately I haven't experienced these yet (knock on wood), but it's not to say that I won't.

That's why I'm constantly learning and reviewing what I know and keep up with the latest evidenced based articles and literature both in anesthesia an trading.

A big ego is a very bad thing in trading and anesthesia, but a "healthy" (read very slightly more than moderate) I think is necessary, at least for me, to continue being successful.

I've had to code patients after immediately heart bypass after just dropping them off in the icu and have had total risk go to almost 6% of total capital. Both are very bad in their fields, respectively.

But so far I'm a cardiothoracic anesthesiologist first and a trader second - depending on the ultimate results of ObamaCare. It is important to know who you are, why, and when (I.e what part of your life you are in).

I thank everyone for their honest opinion and the time it takes to share their trading knowledge in this forum.
 
One way you can do a quick check of your results against chance is to take all of your trades and calculate the average gain and the standard deviation, then divide the gain by the deviation and multiply by the square root of the number of trades you've made or by 10, whichever is smaller. If the number you get is greater than 1.65, you're profitable beyond some level of chance. Otherwise, it's probably just noise.

Van Tharp calls that "system quality number" or something similar. According to his telling of it, the best traders in the world have a number near 5 with hundreds or thousands of trades under their belts.
 
Quote from logic_man:

One way you can do a quick check of your results against chance is to take all of your trades and calculate the average gain and the standard deviation, then divide the gain by the deviation and multiply by the square root of the number of trades you've made or by 10, whichever is smaller. If the number you get is greater than 1.65, you're profitable beyond some level of chance. Otherwise, it's probably just noise.

Van Tharp calls that "system quality number" or something similar. According to his telling of it, the best traders in the world have a number near 5 with hundreds or thousands of trades under their belts.
More...

hmmm....I flip a coin every 1 min and if it shows heads I buy 1 ES with 2 points target and 2 points stop.

At the end of the day I probably have a few hundred - I don't know how many - trades with an average win of 2 points and standard deviation close or equal to zero.

My "system quality number" is a huge number.

Clap...clap...clap...
 
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