(WARNING) I'm revealing a dirty secret about trading..

Quote from focusonmoney:

Before anyone make a comment please read my post correctly. I never said u have to be a mathematician or engineer... and I never said it's ALL about math.. I said trading is about math.. Now about LTCM, I don't how they blew up and neither do you unless you help them... You don't have to believe my post, its cool... no skin off my back..
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Everyone knows how they blew up, and why. Again, go back and study till you find something that actually matters.
 
Quote from XEC10:

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We look at a price chart and within our timescale of interest, we decide where price may go to as a possible target, and where it may go to as a possible stop, or whether price may not move much at all. We use our experience of interpreting charts, observed S/R levels, market indices, futures, news and conclude the likely future direction and extent of a price move.

Some traders have more trading experience and access to information than others, which can be used to narrow down the uncertainty of price movement. The lack of precise information means that we consider a range of possible outcomes of a trade and we try to manage the uncertainty and risk:reward by thinking in terms of probabilities, of our target being hit before the stop:


Expected_gain = Expected_win x Probabilty_of_win - Expected_loss x Probability_of_loss


We try to choose the entry, target and stop so that the expected gain is positive and that the risk:reward is sufficient:

RR = Expected_win / Expected_loss.


Each trade is unique and won't be repeated, but we take the trade on the understanding that if the trade could be repeated with our choosen entry, target and stop under the same conditions, except for those aspects that are uncertain, then the odds are in our favor the we would gain in the long run for that particular trade.

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As the quote explains, its all about probabilities. The OP is delusional if he thinks he's giving away anything that isn't or shouldn't be obvious to all.
 
What a dummy

spin a coin and get your 50/50

thank the lord for the loads of dummies on this planet

makes the rest look special
 
Quote from RCG Trader:

The problem is that you presume you are giving information that is revolutionary. This info can be found in any beginners trading doc. Take some off the table when in profit and let the rest ride. Is this holy grail stuff? Not really. Go back and refine what you think is important and come back when you actually have something to contribute.
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Yea people here are jokes.. I thought I said before you make a comment please read my post carefully.. In my first post I clearly said "What I'm about to tell you isn't new, but its a good reminder for all you doubters..."... The problem is you read what you want to read... Did you even backtest the strategy? If you are having a hard time then please say that, but don't come on here and distract people from good information. I love you all...Happy traidng!!
 
Most traders and would be traders already know the strategy you're talking about. And there's the flip side. If the market went down 2 points you would lose 2 contracts worth of 2 points. If the market went up 2 points and reversed passed the new break even ,you would be stopped out with only 2 points worth of 1 contract. 50% win rate on a strategy wouldn't cut it here. You would need much more than 50%. And correctly determining when it's a swing vs. a small move worth only a scalp. Hard to do with a system that only works 50% win ratio.
 
Quote from cloudy:

Most traders and would be traders already know the strategy you're talking about. And there's the flip side. If the market went down 2 points you would lose 2 contracts worth of 2 points. If the market went up 2 points and reversed passed the new break even ,you would be stopped out with only 2 points worth of 1 contract. 50% win rate on a strategy wouldn't cut it here. You would need much more than 50%. And correctly determining when it's a swing vs. a small move worth only a scalp. Hard to do with a system that only works 50% win ratio.
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Yea I know exactly what you are talking about... But you are not counting the winners... A lot of the winners will cover those losers and break evens... Remember, some winners will be 6, 8, even 15 points... Don't believe me? Please do some backtesting... The problem is most people can't create a system like this because they aren't looking at the chart right... Trust me it's there... Just train your brain and look...
 
Quote from focusonmoney:

Now about LTCM, I don't how they blew up and neither do you
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LTCM didn't blow up so to speak, they got blown up.

Goldmans and others were their prime brokers so knew their positions. When vol started to rise due to the Asian crisis the street smelled blood with LTCM via their positions (remember, they knew what they were).

So Goldmans, as nice people do, put the squeeze on, it's as simple as that, and the rest is history.
 
Quote from AK100:

LTCM didn't blow up so to speak, they got blown up.

Goldmans and others were their prime brokers so knew their positions. When vol started to rise due to the Asian crisis the street smelled blood with LTCM via their positions (remember, they knew what they were).

So Goldmans, as nice people do, put the squeeze on, it's as simple as that, and the rest is history.
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They wouldn't have had such huge positions to unwind if they hadn't kept doubling up on their losers. Destroyed by the gambler's ruin.
 
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