Yah, I don't completly disagree with you. But I still maintain, a real edge ups your win rate. If you don't have an edge, money management is your only hope. Be that edge the ability to interpret price moves or the price drivers. It doesn't matter. surf
Surf's Special Situation Journal
- Thread starter marketsurfer
- Start date
- Status
Without an edge, money management is actually your worst enemy.
Interesting thought. Care to add some color?
Are you saying "going all in" is the only way to have a chance without an edge?
I think its possible for a trader to survive with great money management and purely random win/loss ratio .
Yes - without an edge, the best strategy is to bet only once and go 'all in'. And walk away after that, either as winner or loser. This way, you have a chance. With 'money management', you don't.
Why? Because what money management does is to make sure that you can make an indefinite number of trades by limiting risk on each individual trade.
However, the greater the number of trades, the more closely the average realized return per trade will match the expected return. See law of large numbers. But without an edge, the expected return per trade is negative (don't forget transaction costs...). Over an indefinite number of trades this means going broke.
Money management only makes sense if you have an edge. Then, it improves the likelihood of winning over the long term. If you have no edge, if improves the likelihood of LOSING... even guaranteeing it, if you trade long enough.
I disagree with you. Luck is all one has in the market without an edge. If you go all in, luck only has one chance to work --- with money management, luck has multiple chances to work on your behalf.
True, but the same goes for bad luck.
In the end, it's about probability.
Bad luck is nipped in the bud by good money management thus providing good luck multiple chances to show herself.
Surf do you believe in horizontal support and resistance levels?
That these levels can be from one day back in time to several years?
Do you believe these levels act as brakes and decision levels?
Obviously some are more significant than others and these being at previous turning points in the market.
Interested in your opinion.
Thx
That these levels can be from one day back in time to several years?
Do you believe these levels act as brakes and decision levels?
Obviously some are more significant than others and these being at previous turning points in the market.
Interested in your opinion.
Thx
Yes, provided enough volatility it's a great method. I traded like that during the years of high volatility. But my research and experience revealed that the channel can be placed almost randomly-- meaning no level is more significant than any other. surf
You just then mentioned Gann but edit/deleted it and now you mention common type channels. I mentioned HORIZONTAL S/R lines. I'm not wanting to get sidetracked with Gann or channels or anything else.
It's like you asking me about my marketing experience and I respond by saying Marketing is 90% intrusive because I once worked as a telemarketer and used to phone at 5PM into everyone's homes and got abused constantly. Marketing is not about telemarketing just like horizontal S/R is like Gann or channels.
So lets try again the same question: "Do you believe in horizontal support and resistance levels?
That these levels can be from one day back in time to several years?
Do you believe these levels act as brakes and decision levels?"
This is not bait I'm throwing out, this is constructive debate.
Thx
- Status