Trading WITH versus WITHOUT a system
- Thread starter Georgii
- Start date
I think you missed the part that tech indicators don't work. Try looking up some books on investment theory and corporate finance. Learning how to calculate what things are actually worth is a good step before worrying about "predicting" future values. Knowing what things are worth now is a good starting point to predicting what things will be worth in the future. That's one of the best places to start, too, and is also where all models should start as well. The old adage in the CFA curriculum is that if your current valuation isn't what the market has, your model is off and needs recalibration. If you think about it from that perspective, you'll start to understand how the market works. In the end your valuation can be in a range of possible values, and it is only the "changes" in the market's expectations that will affect your trades. Market timing, at least the way I trade, is based on the assumption that the market can "change it's mind on a dime" and frequently does. That is also mean reversion.
Going back to your question, learn how to "develop" a system. When your succesful at that, I think you'll be ready. Have you taken a look at Fidelity's Wealth Lab Pro?
Quote from Mr.Consistent:
It is fascinating how much of your opinion is ill-informed and based on untested assumptions.LOL
I actually understand the irony of the post.
But I think you would agree that you wouldn't take things mentioned in these post or books and trade them as they are written. I'm sure everyone has their own set of criteria for considering and accepting what other people mention.
I say before trying to learn how to trade learn who is in the game first. Technical traders, quants, value investors, arbitrageurs, news traders, market makers, block traders, hedgers, manipulators, brokers...etc. What are you going to do to take money out of their pockets? What are you going to do to be better informed then anyone else?
A trade is what makes a market, it reveals the price at that point in time. When price moves away with the passage of time one's position will have lost value and the other gained whether it be the buyer or seller. Hence this is a zero sum game. If you want to, for example, buy at support, try and imagine why anyone in their right mind would be selling to you at support. What information do you have that the seller may not be aware of besides the fact that price is located at what you deem "support"?
Some critical thinking will lead you to a better learning process and away from thinking that there might be easy money out there.
A trade is what makes a market, it reveals the price at that point in time. When price moves away with the passage of time one's position will have lost value and the other gained whether it be the buyer or seller. Hence this is a zero sum game. If you want to, for example, buy at support, try and imagine why anyone in their right mind would be selling to you at support. What information do you have that the seller may not be aware of besides the fact that price is located at what you deem "support"?
Some critical thinking will lead you to a better learning process and away from thinking that there might be easy money out there.
I disagree. Livermore, Wyckoff et al. discovered the principles of successful speculation going on a hundred years ago.
...though this is for the type of trading where you sit and watch the squiggly lines. I don't know anything about market microstructure, mathematical models, gimmicky arbitrage, genuine scalping or any of that.
Finally a quality post with wisdom based on observation. The dynamics of markets change, but the crowd psychology doesn't.
to the OP:
i hope this advice will ring true to you at some point during the years you will spend beating your fists against your head:
the market is not yours to predict, but yours to follow.
cheers
i hope this advice will ring true to you at some point during the years you will spend beating your fists against your head:
the market is not yours to predict, but yours to follow.
cheers
It's fine that you disagree and very understandable. I don't mean to be sarcastic too, FYI. One way to look at it is, all that matters is that you are making money trading.
Though... I'm not a big fan of using Psychology, Market Psychology, Philosophy or all the subjective stuff as the answer of any trading discussion. It ends up with a self-fulfilling prophecy and it's not a transferable advice to a newbie asking for an advice. Don't get me wrong. I don't deny those subjectiveness of trading, but before any newb. goes into those things, there are prerequisite knowledge to be gained about the market to make money.
Principles... you're using tough words. For example... they've both mentioned about the importance of Money Management. I agree. Though, would I use a 10% risk per trade like Livermore? No I won't, hope you don't too. Would I trade as Wycoff? Nope, his trading techniques are out-of-date.
During the past 100 years, Math and Market Infrastructure has changed so much. I find it very hard to find any book off the shelf which doesn't mention about the "Principles". There's no doubt that I respect them as pioneers of trading but the information is out-of-date. Timeliness as a piece of mind is still living.
My question is... there's so much to learn about the market. Why limit what you can learn about it, just because you know the Principle? Is knowing the "Principle" all that is required?