Who's Shirley? Is she a new member on ET or that your wife?
What are some mathematical misconceptions with regard to trading?
- Thread starter rin4et
- Start date
Who's Shirley? Is she a new member on ET or that your wife?
The way I see it @rin4et asks sincere questions and have the stamina to keep going. Honesty and stamina are two very important qualities to have a fighting chance. I can't speak for daydreaming^H^H^H^H^H^H^H^Htrading, but for longer term holding (weeks, months, years) it definately helps to get some tips from oldtimers who've travelled the road before. I took it as insults then, but now I see people need some kind of wakeup-call to shake them out of ordinary routine, if we're to talk about trading at all. Many traders don't really care much about teaching others either, or don't have that skill/joy, but most like to show some accomplishments or take on "wrong-guy-on-the-internetz". Between lots of work, most need some social interactions, even aspergerish types
Idea-generation by yourself is very futile, so brain needs food, and that food can be anything, even lame formulas doing the same over and over again! 
How do you determine a "70%" trade as opposed to a 60% ? A mechanical set up that has a history of 70% or a gut feel of being "more confident" ?
re:60% vs. 70%
"beauty is in the eyes of the beholder" it is that way for the next 10 ticks. then reality kicks in.
Rin4et has produced a flow of sincere and insightful question-threads and posts which is why she is on my follow list:
"Which users posts have benifited you the most?
Can full day traders that trade stocks raise their hands?
Questions you ask yourself to avoid false positives durring the day?
Has trading made you more spiritual?
Is there a benifit to paper trading?
Does anyone feel sleepy when they trade?
What is the wrong advice you have received?
How good are you?
Any full time day traders trade stocks?
How does a big volume price bar produce a small price movement?
How to get over fear of increasing position size?
What was your journey as a trader?
How has the pursuit of trading impacted your life?"
(There was an early attempt at a public trading blog to see if that would be helpful to her trading but perhaps the format and tough crowd)
_____
Practical questions.
I do not have to find value or agree with every single question or opinion a sincere student of the game posts to value what they are doing and what they are trying to do.
Since I do not know everything about everything, I greatly look forward to hearing the answers to future Rin4et question-threads. Keep 'em comming!
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There was a bracketed reference just after that referring to a a cat.
It was a reference to the thought experiment known as Schrodenger’s cat. It’s application in real life is the superposition of a particle spinning in two different directions at the same time.
It was one of the few things that Einstein got wrong. His famous quote “God does not play dice with the universe”. In fact the universe is a completely probabilistic construct at the sub-atomic level.
The concept was that price is simply a tiny massless particle therefore the rules of quantum mechanics apply to it, it is both up and down at the same time. As I said before the actual application of quantum mechanics to trading is not well suited, but thinking about it, just the process of THINKING, opens up some doors.
The quantum nature of the universe is fascinating. Entangled particles changing each other’s spin, at large distances, at speeds faster than the speed of light. The experimental data is clear, this effect does exist. As to the why it exists that is still under much speculation. My personal opinion is the connection of the particles through a dimension that we cannot yet perceive. It would allow the maximum speed of c to remain universal, but a different path between the particles than what we know.
FUN FACT: If you take every single person on the planet lump them together, then remove all the empty space between the sub-atomic particles that make up their bodies. You are left with something approximating the size of a cube of sugar. We are a lot of nothing.
WHAT’S IT GOT TO DO WITH TRADING, HOW DO I MAKE MONEY FROM IT
The probabilistic rather than the certain is one method of describing how price behaves. Price is essentially a zero mass particle operating in a constrained two dimensional world. Valid and proven probabilistic theories can be simplified for the two dimensional plane of price.
I posted about this elsewhere and am too lazy to look it up at the moment. The basic idea was that I obtained a significant amount of data. I then created mathematical models to describe that data. Generally speaking, applying a scientific method of measurable evidence and a theory. So with a new trade I apply the mathematical models (they vary with the instrument traded). My result would be more along the lines of 72.3%, but I used 70% as a convenience in writing.
That is why I mentioned price distribution, and that it is not a linear function and not a normal distribution. The probability of price certainly changes the farther away you are considering it from the present price point. But I can get enough of an area that is within my boundaries of risk tolerance for a profitable methodology. It is not a matter of reality kicking in, it is a matter of calculating the probability and then at a point where the probability becomes too small, to no longer consider that trade as safe. It is a method of describing reality across all lengths of ticks.
ANOTHER COMMON ERROR
While not a pure mathematical error, there is a logical error that is common in this forum.
A poster will say:
“I tried “A”. It did not work. Therefore “A” does not work for anyone and is a waste of time”.
Utter nonsense. The failed “A” may very well work and be profitable for others.
It is typically posted around the studying of texts to learn fundamentals of trading. There is some bizarre etiquette that being ignorant is a badge of honour. A clique of the illiterate.
The fact is some people have very successfully read texts and used that knowledge to develop profitable methods of trading.
There are a large number of techniques for trading. I have looked at dozens and dozens over the years that did not work for me. That does not mean they do not work for anyone else.
Currently I use a method that is profitable, yet others state it never makes anyone money. I described it in another post, and again am too lazy to find it and post a link.
The reader may view my ideas anyway they wish. They may view them with disdain. They may believe that it cannot work and I will fail in the long term. They may insinuate that they have superior knowledge and a superior method. Well done for all that. Yes, yes, you are the superior person, go along and enjoy life and your riches.
HUBRIS HIDES PROFITS FROM YOUR VIEW
Miss ya Rip.
I haven't read your post entirely yet but I give you the award of the best poster on ET. Everything you post is soo interesting!
even then it is not true as trend traders take position in a for them existing trend. from start it is already not 50/50. 50/50 means there is no trend.
don't tell this. just confirm that trends don't exist and TA does not work. this keeps the majority overhere happy and you know where the money you will make will come from.
L
lovethetrade
A moving average is based on x number of periods and is static until the next bar(period) closes.
At least for me this was a misconception in my early days of trading.
At least for me this was a misconception in my early days of trading.