Don't bother working on reading comprehension now, but this has already been dealt with.
SKILL or LUCK???
- Thread starter George Canuck
- Start date
Don't bother working on reading comprehension now, but this has already been dealt with.
Not being a tough guy. You basically said, "TA doesn't work"... and I replied, "you're full of crap".... that's all.
I don't give trading lessons... rather you post YOUR stuff and explain what you do that works while at the same time refuting TA.
Average win/loss (over 132 trades) gives you some indication but it is not enough data to draw conclusions. To make any statistic calculations you need to made some assumptions about profit distribution. Mathematical statistics works best with normal distribution and trading returns hardly ever follow this distribution.
You have so called fat tails. What means that the risk of very big profit/loss is much higher than expected.
For example you might have a strategy where 80% of looser will have the size below $2000 and 20% above $2000. But if you add together all the small loosers below $2000 they will stand only for 20% of all the losses. And 80% of the losses might be caused by 20% of large loosers. In such scenario it would be difficult to even calculate the size of average loos or average win because one outlier can distort the picutre.
You have so called fat tails. What means that the risk of very big profit/loss is much higher than expected.
For example you might have a strategy where 80% of looser will have the size below $2000 and 20% above $2000. But if you add together all the small loosers below $2000 they will stand only for 20% of all the losses. And 80% of the losses might be caused by 20% of large loosers. In such scenario it would be difficult to even calculate the size of average loos or average win because one outlier can distort the picutre.
That's the problem, for me TA hasn't really worked, at least not consistently. I've studied various trend following and cyclic indicators for the better part of six years, and none have really worked. I've managed to be essentially flat in P/L over that time frame, but probably just random luck of some of the indicators. I always have incorporated indicators into a system with money and risk management included. That is just the empirical evidence I have seen. I don't believe my experience is much different than most other traders.
After adjusting for the avg win (3800) vs avg loss (4200), the confidence comes down to 99.80%. Still a great result (subject to the assumption of randonmess of course)
A hearty âthank youâ to everyone who contributed to this discussion!
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Mr George/81969;
Well thanks for the question.
a]A silver coin like 1964 JFK , should NOT even be flipped.Flip homes not coins; flipping silver coins can scar them + lowers value.
bTrend follower John Henry says what you call'' luck'' ; '' I call a small sample''.Word to the wise.
[c]I like your track record. keep position size small + do that for as many years as you can+ watch for repeating patterns;; like do not flip 1964 JFK silver coins it lowers value....................................................................................................................................................................And another big difference between flipping coins + trading;;;;;; most all traders + investors are RISKING more than a coin flip, so cant really rightly compare the two.
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Mr George/81969;
Well thanks for the question.
a]A silver coin like 1964 JFK , should NOT even be flipped.Flip homes not coins; flipping silver coins can scar them + lowers value.
bTrend follower John Henry says what you call'' luck'' ; '' I call a small sample''.Word to the wise.
[c]I like your track record. keep position size small + do that for as many years as you can+ watch for repeating patterns;; like do not flip 1964 JFK silver coins it lowers value....................................................................................................................................................................And another big difference between flipping coins + trading;;;;;; most all traders + investors are RISKING more than a coin flip, so cant really rightly compare the two.
John Henry is already finished as a trader.
Well, you just haven't figured it out yet.
I don't do trading lessons, but offer this....
1. Here's a pic of my house. 7,200 sq/ft with 5-car garage on 2.5 acres. Stone & stucco exterior, gorgeous inside.
2. I drive a BMW 535... could drive a Ferrari and have a garage full of them if I wanted.
3. Started my investing career in early '80s... $25/mo on a bank draft into Templeton Growth Fund... while living in a 1- bedroom apartment and driving a VW beetle.
4. Saved my money learned to invest. Caught onto "TA is the way".
5. I have enough $Millions that I can't possibly spend them all.
And I owe it all to "market investing with TA". Have to say, "if you believe TA doesn't work, you're not doing it right."
Just thought I'd post this to bolster the hopes of others looking to make their way in the markets.
FWIW...
nice digs