What exactly is group delay? I faintly remembered in college there was a class call Introduction To Group Theory which I didn't take for good reasons - too hard for me.
trading using moving averages
- Thread starter padutrader
- Start date
i trade forex where there is no 'day'.......
i was wondering how entry on the first close of bar above/below a moving average would work.
is trading only about probability?
When you realize that moving averages are just lowpass filters in the digital signals processing world, then group delay comes out of the math(the negative derivative of phase with respect to frequency.) Once you view MAs as digital filters, you are implying that price is a complex signal plus additive random noise. It is not of course, but that viewpoint serves as a model for price action. The accuracy of that model is what is debatable.
So, group delay is what folks commonly call lag. The time delay between price being realized and the indicator responding to price.
Ultimately yes, but Gaussian statistics do a poor job of describing price action. However, traders have long used simple heuristics to deal with probability, such as buying just below obvious support to get a perceived low risk entry.
I like this
Well, relying on luck hasn't resulted in a positive P&L for some reason. And the chances of catching SPX in a dark alley and taking its wallet seem pretty low.
If you have any sort of a rational approach to trading, then - yes, it's all about probabilities (notice the 'ratio' part in 'rational'.) And even if you believe in some kind of fuzzy-brained moon-based nonsense... guess what? It's still about probability - because you wouldn't do it unless you had a larger positive than negative expectation for an outcome.
padutrader,
Great Question
I can ONLY speak for myself when I say: Trading is ONLY about the high probability of me making money consistently for years to come. It is not about nothing else on this earth.
the fact of the matter is that you only think you have higher chance for a positive outcome.
do not forget that if you have something that consistently gives 80% probability then somebody has to lose, every time, that you win and that somebody will soon realise that he is losing a lot of times, in that market condition and he will stop taking the other side of that transaction.
that is why any system, discretionary or other wise, will have losing trades and any edge will eventually disappear.
this will cause an illiquidity in certain market conditions which will then move the market.
traders have to accept that however good they or their system is , they will have losing trades.
what makes trader profitable is how he can keep losses low when he is loses.this is what a trader must concentrate on.
and yet traders still search for the 'perfect' or even better 'system'. and so all advertisements by so called educators claim to have a method that achieves this.
so when traders say that moving averages is 'useless' that has little bearing on how profitable a trader that uses, this will be !!!!