When Indicators Don't Lag

romik said:
I don't understand what he is after anymore. He keeps saying it's not valid as it's already happened, but the objective isn't in 'who spots a divergence before it happens', but in spotting one, which is in a trader's discretionary opinion a good one and then making a trading plan. Then he keeps saying what about other divergences that you didn't choose, as if all are to be chosen. Considered yes, chosen not necessarily. Then he quotes Jim Rogers who basically said he only puts on a trade when the time is right, but he wants me to choose every divergence and provide stats for them. He always wants something extra, never happy that one.
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Looks like wants all the details of your entries and exits, but offers nothing at all about their system. Not even whether a trade should be long or short. Hypocrisy abounds.
 
SunTrader said:
Thanks for the long, meaningless post. You still don't get it. But nice xmas tree in the graphic.

Big profits are linked to big profits, whether or not by a high win rate. Always, always. There is no linkage. Now is it possible to win big with a high win rate. Sure. Is it likely, no.

Read any of the Market Wizard books. Most of the all time best traders ever explain why they don't try for a high win rate. They try to win as often as they can within their system. But high profits are a sign of success not a high win rate.

WTF does it matter to win 90% of the time if the wins are comparatively small dollarwise to someone else who doesn't have a high rate.

Two traders do a 100 trades apiece - one wins 84% of the time for a total of $1000 - the other wins 48% of the time for a total of $3000.

Who did better?

Here is a quote from New Market Wizards (that I was lucky enough to do a screen grab from another site rather than type the whole damn thing) which maybe will make the point clearer:

One common adage on this subject that is completely wrongheaded is: you can’t go broke taking profits. {often trying to have a high win rate*} That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. – William Eckhardt

*I added this
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Excellent posting!!
 
Buy1Sell2 said:
Long Jun British Pound at 1.4910. Initial stop 1.4550.
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Looks good to start off with a 52 pip gain Romy, but it's too early to claim any victory yet. I could if I was trading the SLA, because they advocate being right and taking quick profits. You and I both know that a weekly divergence doesn't need to be taken exactly when it happens. It however announces new trend direction and allows us to take trades in that new direction. No victory yet---Looking for bigger profit. Romik is way ahead of the curve.
 
i am nobody said:
I don't give details because than people can reverse engineer my returns. I don't want that. On top of that bashers will say that it is impossible to make these returns, so not publishing avoids all these problems.

If I have >80% profitable trades and give back on average 5% you can calculate already a bit to know more. I think most traders give back much more.

I have no statistics about how long I stay in a trade. I checked some trades now. Results are in attached file.

Some additional information:
1. green times: trades that I closed because it was clear that the trade was not going to make money. So in fact a losing trade that is closed with profit.
2. red times: trades that were stopped out at 3 points
3. close: trade closed because market was closing
4. 15 pts: sometimes markets move very fast. Then I take profit because the profit is to big in a too short time to let it run.
5. 10.25 pts: sometimes markets move very fast. Then I take profit because the profit is to big in a too short time to let it run.


All times are in hours:minutes:seconds format.

So 05:42:00 is 5 hours and 42 minutes.
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Thanks for the precisions.
I actually spent some time reflecting on the time you spent within an intraday trade.:)
As one would expect high win rate, and low risk:reward. However, this last assumption does not include time frame , or length of time a winning trade is held. ;)
 
Handle123 said:
Conformation is past tense, it has already confirmed an occurrence and it is not a possibility, I thought that was obvious. So it comes down to definition of strong trend or distance of what the mean of trend swing and breakdown of when "mean" ends and taking continuation trend trades thereafter.
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Ok, I see your point. Fair enough. You're right. I expressed myself poorly, it's essentially an oxymoron. I could say "potentially confirms" but there's the same problem. I'm not sure how to put it, really, because I have an anathema to firmly predicting price behavior or pretending I can do so. To me, when I open a position, it's always "If...".

Annnnnyhoo, in the end, I still think that's a lot of semantics, and, btw, pal, if your post hadn't hadn't been dripping with hostility and scorn I might have responded with a bit more respect. So many smart folks here on ET, so many close-minded asses.

As to some of the responses in this thread (back in the day when it was still about what it was supposed to be about), it wasn't really surprising to moi how my opening explanation was so ignored here at ET. Lemme try once more and this time I'll spell it out for those who can't grasp the obvious - This thread isn't really about whether indicators lag (I was being facetious for those who don't understand irony), especially moving averages, which, by their very nature, must lag. It is about looking at the divergent indicator in the context of its most recent past behavior - in the same way one looks at price behavior in such context - along with price/volume behavior to determine whether a buy/sell signal is valid. So much of the arguments in this thread seem to be claiming that indicators and price/volume behavior cannot co-exist in a valid trading strategy.
 
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