Random Rants and All the Other Goodies
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John Q Public
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Did I bring up a subject best left alone? I didn't mean to cause any trouble.
What did the late W.D. Gann die of?
First, read this thread, please:
http://www.elitetrader.com/vb/showthread.php?threadid=10890
Simply, the thread is about how you would manage a position (exiting) if you had a random entried position. In another words, Random entry, Trading Exits.
It's a very interesting thread. But there's an irony here. First, it doesn't matter whether the market is random or not. It doesn't matter if the market is 50/50 or whether the market is cyclical or not. Seriously, it doesn't affect our trading itself.
The reason for my conclusion is that there can never be a random trader. We all base our trading in some sort of fashion, whether it be mechanical or discretionary. Most of the time, even for a intuitive trader, there's pattern but it's just dynamically done. We base our trading based on knowledge and experience, then we analyze it consciously or intuitively. There is always a dynamic but common base each individual has to base it's trade.
Considering that, we'll do what ever that suites their style.
Still, we base our actions from what the market has done. It's just how we reacted to the market. So the knowledge and experience doesn't come from the market but from the our own reactions to the market.
There are statistics, backtesting, and system trading. The market in itself is not involved, you're studying it based on your experience. Let's say you find that some study, like breakout, works 30%. Then you're going to base your trade from that knowledge.
So when it comes to "TRADING" there can be no randomness. The results coming from it doesn't really matter.
It's pretty much common sense. That's one reason psychology is important. It's more important to understand our perception and reaction than to understand the market because we trade it.
http://www.elitetrader.com/vb/showthread.php?threadid=10890
Simply, the thread is about how you would manage a position (exiting) if you had a random entried position. In another words, Random entry, Trading Exits.
It's a very interesting thread. But there's an irony here. First, it doesn't matter whether the market is random or not. It doesn't matter if the market is 50/50 or whether the market is cyclical or not. Seriously, it doesn't affect our trading itself.
The reason for my conclusion is that there can never be a random trader. We all base our trading in some sort of fashion, whether it be mechanical or discretionary. Most of the time, even for a intuitive trader, there's pattern but it's just dynamically done. We base our trading based on knowledge and experience, then we analyze it consciously or intuitively. There is always a dynamic but common base each individual has to base it's trade.
Considering that, we'll do what ever that suites their style.
Still, we base our actions from what the market has done. It's just how we reacted to the market. So the knowledge and experience doesn't come from the market but from the our own reactions to the market.
There are statistics, backtesting, and system trading. The market in itself is not involved, you're studying it based on your experience. Let's say you find that some study, like breakout, works 30%. Then you're going to base your trade from that knowledge.
So when it comes to "TRADING" there can be no randomness. The results coming from it doesn't really matter.
It's pretty much common sense. That's one reason psychology is important. It's more important to understand our perception and reaction than to understand the market because we trade it.
So what is my perception towards exits?
Sure, I do have trailing stops, projected profit-taking, and etc. in my inventory of techniques. One thing is it depends on the nature of the conceptual style of the entry. If I trade a counter-trend, I'll be using tight stops and profit-take. If I trade a trend-following signal, I'll use trailing stops and sometimes partial profit-taking. It just depends on what the signal is.
Just like there can't be an entry signal that works in every situation, there can't be a exit signal that works in every situation.
The common ground for all exit is to play safe. Maximizing profit comes after that.(Thin line between them because of expectancy factor)
Sure, I do have trailing stops, projected profit-taking, and etc. in my inventory of techniques. One thing is it depends on the nature of the conceptual style of the entry. If I trade a counter-trend, I'll be using tight stops and profit-take. If I trade a trend-following signal, I'll use trailing stops and sometimes partial profit-taking. It just depends on what the signal is.
Just like there can't be an entry signal that works in every situation, there can't be a exit signal that works in every situation.
The common ground for all exit is to play safe. Maximizing profit comes after that.(Thin line between them because of expectancy factor)
John Q Public
Guest
Did you ever think about becoming Larry Williams? He does very well, and is still alive.
I'm going to stop my journal.
OK, so you think my journal has lacked in substance and ideas... great... there you go, might as well not waste time with it...
This journal has been a great mind refresher for a few me and I hope it has done good to others.
*I'll have Magna to close this thread*
OK, so you think my journal has lacked in substance and ideas... great... there you go, might as well not waste time with it...
This journal has been a great mind refresher for a few me and I hope it has done good to others.
*I'll have Magna to close this thread*
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