There is but one correct method
- Thread starter Buy1Sell2
- Start date
that's why we trade pairs, if one goes to hell it should probably be good for their competitor, if the market climate is good, it should probably be good for both of them, if that market climate is bad, oh well, you have the same problem as everyone else, but at least you have two out of three covered.
1. Find an edge
2. Don't use stops, if you need to use stops your leverage is too high
3. Average in. Nobody can predict turns but markets always mean revert
4. Don't daytrade, keep your commissions low, swingtrade or semi-buy and hold.
2. Don't use stops, if you need to use stops your leverage is too high
3. Average in. Nobody can predict turns but markets always mean revert
4. Don't daytrade, keep your commissions low, swingtrade or semi-buy and hold.
Another Nazi trader that makes it very clearly that it is his way or the highway.
All you do is show your true colours of inexperience by limiting the ways where profitbaility can be achieved.
If there's one thing I truly hate is people posting on a public forums what cannot be done to make it.
There are many ways to skin the cat, just because some methods did not work for you does not mean they don't work for others.
I'm not here bashing your technique, but thinking it's the only way is absurdity and ignorance at best.
All you do is show your true colours of inexperience by limiting the ways where profitbaility can be achieved.
If there's one thing I truly hate is people posting on a public forums what cannot be done to make it.
There are many ways to skin the cat, just because some methods did not work for you does not mean they don't work for others.
I'm not here bashing your technique, but thinking it's the only way is absurdity and ignorance at best.
1 and 2 contradict each other. If you have an edge, you should be able to know when that edge has been disproven for a specific trade, i.e. it didn't work this time around. That's the natural place for a stop. If you think you have an edge, but your edge doesn't tell you when you are wrong, it's not an edge. An edge has to work like a scientific hypothesis, i.e. it can be disproven. Otherwise, you are just working on blind faith that things will work out.
3 is just wrong. Markets don't "always" do anything. In fact, to take an extreme example, after 9-11, the market didn't even open for business, which is probably the one thing it comes closest to "always" doing.
4 is also somewhat contradictory to 1. If my edge says to open a trade and then later that same day says to close it, commission savings is going to be the least of my worries.
Your all idiots... The correct method is actually...
1. Buy Low, Sell High
2. Sell High, Buy Low
3. Repeat the above two steps.
1. Buy Low, Sell High
2. Sell High, Buy Low
3. Repeat the above two steps.
9-11 mean reverted.
If Buffet ever used stops he wouldn't be as rich as now. I hope it is clear to you one size does not fits all and in most cases stops aren't appropiate
Also, when a trade goes against you people seem to think the edge disappeared for that trade. That isn't logical. If an edge is an edge it is ever present. You just have to use common sense as to use tools which mitigate losses. in your case, you are confusing exits with edges. a stop in your case is used as an exit condition, but you seem to think it also indicates a disappearance of your edge. that is wrong.
I don't know how you know that if Buffett used stops he wouldn't be richer than he is now, but OK.
How the invocation of Buffett is supposed to make it "clear" to me that "in most cases stops aren't appropriate" is actually quite unclear. But, again, whatever.
Also, the idea of "common sense" is not one I would rely on at all in trading. The whole point of developing trading systems is because humans are biologically-wired to do the wrong thing at the wrong time when using their "common sense".
The reason an "edge" can disappear for a trade is that it wasn't ever there. The phenomenon of "false positives" occurs whenever the model being used to trigger a trade is incomplete. It's not that the edge disappears, it's that what really drives the edge is beyond your complete comprehension. What you do track vs. what you could track when it comes to trade triggers are two different things. There is always the possibility that something you are not tracking actually has an impact on your outcomes. It's like when you are doing regression models and you can't just throw every possible variable into the model, but you also know that some proportion of the outcomes are not accounted for by what you can put in the model. This is what r-squared measures. Your stop (or at least my stop) tells you when your model, which is by definition incomplete, missed something on that specific trade.
But, clearly your timeframe is much longer than mine if you consider what eventually happened after 9-11 as "mean reversion". I don't think holding a trade for months is worth the opportunity cost of tying up my capital.