Quote from marketsurfer:
I do know it involves not using stops to obtain maximum performance of any system--- therefore when i hear about stops and big returns-- I know its a false belief based on quantative studies indicating the opposite---
This is what i call "feel good" trading philosophy absent of proven evidence. It is very dangerous to rely on feel good ideas when in the market.
No, the facts prove this to be inaccurate. While it sounds good and smart, research proves it not to be true. My old firm studied a sample of 200,000 trades using stops at 1%, 2%, 5% etc and at every stop level, the percentage of winners decreased and the the expected return dropped --- How do you justify your statements when quantative facts reveal the opposite? Stops basically guarantee that you WILL LOCK IN LOSSES-----nothing more. surf
Quote from marketsurfer:
I do know it involves not using stops to obtain maximum performance of any system--- therefore when i hear about stops and big returns-- I know its a false belief based on quantative studies indicating the opposite---
This is what i call "feel good" trading philosophy absent of proven evidence. It is very dangerous to rely on feel good ideas when in the market.
No, the facts prove this to be inaccurate. While it sounds good and smart, research proves it not to be true. My old firm studied a sample of 200,000 trades using stops at 1%, 2%, 5% etc and at every stop level, the percentage of winners decreased and the the expected return dropped --- How do you justify your statements when quantative facts reveal the opposite? Stops basically guarantee that you WILL LOCK IN LOSSES-----nothing more. surf
Quote from bwolinsky:
Your belief in the validity of a quantitative study that did not explore strategic codes properly means that a "false belief" of yours would be just as accurate as the random entry systems you seem to base your beliefs on that by adding stops to random entry systems you can prove losses will only be earned through the addition of these components to the trading system when these are vital components to trading methods that should be applied to each instrument and not to a blanket statement of what works in every market than the strategy I espouse and you seem to ignore which is to measure what each market is offering then apply quantitative analysis...
What you do is define ignorant academic research that I've pointed out ad nauseum does not meet the criteria of qualified researchers in all cases since they did not show the ability to produce profitable results prior to their studies. If they had done this, the research would bear out that the number of individuals doing what you describe is essentially close to the number zero if you look at all of humanity, and only apparent statistically in heavily capitalist economies.
I've been left to train my robots, and they haven't required re-modification to the algorithms so that I've locked codes and only have to train them.
When you get to this point, the black box is quite a utility, like a very expensive piece of machinery in a factory that obviously doesn't require anything but a work order to acquire...
Quote from Lord.Maushi:
Using stops decreases my performance, it also protects my capital.
I can keep trading with decreased performance, I can't keep trading without my capital.
Pretty logical to me.
There is no such thing as trading without stops, typically when someone says they do not use stops, what they really mean is that they use big stops, and in some circles this is akin to not knowing how to read smaller TFs or lack of knowledge on how to do re-entry or both.
Quote from marketsurfer:
What is your education and pedigree that enables you to make such blanket statements? Surely you have been published in top tier journals and your PhD is in finance from a top 5 school? What about in the industry, what funds have your worked with?
Otherwise you have zero credibility therefore should not be dismissing the extensive work of those with much higher credential and access to data than you.
Quote from bwolinsky:
My education is from the number one academic institution in the South as rated by Forbes, Centre College. I have a Bachelor of Science in Financial Economics and a minor in mathematics. Financial Economics is not finance or economics, but the efficient allocation of capital in finance. My publication was blocked by an ultralib, anglophile econometrics professor that did not want Centre being associated with elitist ideals despite most individuals there being such. What I published was IQ and Income, and this was good enough for doctoral theses.
Quote from marketsurfer:
Interesting, thank you for sharing. Sounds like a Bell Curve, francis galton type subject you tackled in your paper---- that took verve on your part. best wishes
Quote from bwolinsky:
Hernstein and Murray's book the Bell Curve was the inspiration, but more importantly pointed to a vital component to my education which was to a BLS program that compiled the data necessary for that project into a SAS data file.
The rest of the project was analytical perspective on the role of intelligence as measured by your ASVAB percentile.