Trading INVERSLY

[Gordon Gekko]

Scientist, just to obliterate your cockiness. i will make it clear why your reply to me was unjust.

my statement:

Quote from Gordon Gekko:


Scientist,

good post, but i would like to add that there are definitely times when a larger move than normal may occur. as you said, even at this point, the direction may be close to random, but, imo, an entry is still important because it can give you big winners when you are right.

even if you can't predict which direction it's going to go, you CAN still research the market for times when bigger moves than usual might occur. i don't think you'll disagree with me.

the cockiness in your reply that disagreed with me:

Quote from Scientist:


Again, nonsense.

You're just not getting the point.

Bye now, don't ask me anymore.
~Scientist

what my point was (that you seem to FOOLISHLY disagree with):

the long/short entry is probably going to be close to random. however, you can still choose to make entries at times which big moves may occur. THIS is what can make an entry important, EVEN WITHOUT BEING ON THE CORRECT SIDE.

a newbie can take advantage of fat tails by entering long/short randomly at random times and use a trailing stop on winners. A PRO CAN SEEK OUT ENTRIES WHERE BIG MOVES ARE LIKELY TO OCCUR AND ONLY TAKE THOSE TRADES. i guess you're not a pro?

Bye now, don't ask me anymore.
~Your idol.

 

[gms]

estrader: If you think that your long setups/signals offer you better probabilities on getting into winning short trades, and vice versa, there's no one stopping you from backtesting the idea.

In backtesting, though, you're going to discover that you don't get the "opposite" outcome you expected. One reason will be because now your stoploss will be on the other side of the trade, the side that before (when a long was a long and not a short) did not have a stop. So before, your position may have moved quite freely about that side before losing and getting stopped out. Now it won't be able to move on that side as freely without getting stopped out first.

 

[damir00]

it won't work.

Quote from estrader:

Yes. But think about it, if every trade you make goes against you, do the opposite, so it will go in your favor.

the problem isn't the entry - the vast majority of ticks can be profitably shorted OR longed. the problem is managing the losses and taking appropriate profits.

and fading yourself won't do anything to help with that.

 

[Gordon Gekko]

the only way you could successfully fade yourself would be if you didn't know you were doing it.

 

[TMTrader]

Quote from nkhoi:

this was debated and the method included turn monitor upside down, use a mirror etc. but bottom line is you can't fade yourself.

You can turn your monitor upside-down, use mirrors, switch bottons or stand on your head reading poetry while trading, it will not help.

What you really need to do is switch your fear with greed and greed with fear!!!

TM Trader

 

[TMTrader]

Quote from Scientist:


This is nonsense.

This would assume that trading is about "being right or wrong" about your decision to put on a trade and it's direction.

This is a common fallacy that all beginners fall for. Trading has got little to do with directional bias. Directional bias, in the short-term, can give you a slight advantage as to knowing which direction it's gonna go. But essentially you can't predict it. And there's no system etc out there that can.

So the problem is that all this you're talking about simply focuses on the entry. The entry actually has comparatively little significance.

What is significant is trade management. That is an appropriate stop-loss and a good exit.

You could theoretically flip a coin and trade "heads" long and "tails" short, and win over the long term if you're trading with good trade management.

To make it simple: If you're flipping coins, over the long run you'll have a 50/50 distribution, but if you cut your loser-trades short and let the winners run, you'll still end up net profitable.

This sounds easy by principle, but it sure isn't. The hardest bit, in my opinion, is to let the profits run. It's a damn dog. Where to take profits and how much? An age-old question.

Marty Schwartz discussed the same as his main problem in "The Market Wizards". Read the book again! It's great.

You're always battling fear versus greed, and that's what kills you. The initial direction of the trade matters little.


All the best to you, brother. And good luck with your trading.

~Scientist

Right

 

[ttrader]

Quote from estrader:

Let me see what kind of response I get for this:
Since so many people are losing money trading, did anyone try to do the opposite, that is when you want to buy - sell, when you want to sell - buy. Thus you should be making more than you lose.

So, any experience doing this, anybody?

Just inverse the chart bottom -up ...


ttrader

 

[ttrader]

Quote from TMTrader:


...
What you really need to do is switch your fear with greed and greed with fear!!!
...

This won't work. Don'T ask e why ...


ttrader

 

[Scientist]

Quote from damir00:

it won't work.



the problem isn't the entry - the vast majority of ticks can be profitably shorted OR longed. the problem is managing the losses and taking appropriate profits.

AMEN

~Scientist

 

[Scientist]

Quote from TMTrader:


What you really need to do is switch your fear with greed and greed with fear!!!

TM Trader

You're only partly right.
From a magnitude point of view, you're right.
From a principle point of view, you're not.

What I mean is that more fear and less greed will hardly make you succeed. In fact, it would make your trading even worse,
not to mention stressful.

The point I'm getting at is that both fear and greed are emotions that are there for a reason. As a trader, it is your mission to be a self-examining psychologist, to recognize, balance and isolate / suppress these emotions as required.

To ignore them, however is foolish and leads to self-destruction as well.


<i>"Only a fool knows no fear...!" - Worf, Klingon Warrior, Star Trek.</i>

~The Scientist