Detrimental forms of lag only exist within the minds of those perpetuating an agenda. Detrimental lag doesn't exist in the realms you and I participate in.
Why do traders still use lagging indicators?
- Thread starter TSLexi
- Start date
funny I've never spent the time to view it that way. No phd's here. Just mustard, forward and backwards.
I don't participate in the realm of analyzing order flow but those that specialize in it do very well with it. The nature of HFT requires discounting participation by average traders using solutions available on a retail level, tho I could b wrong about that because it's never interested me.
You guys realize this is a typical ET argument which is meaningless. Does not matter if indicators are lagging or coin tosses...any tool that helps you analyze what is going on in the screen/chart you are looking at to make money over time is useful to you. If I built a house using the back of an axe to hammer in every nail you gonna tell me I am an idiot who should have used a hammer if the house is sturdy and well built?
Make money, pray to unicorns, but make @#$%ing money.
Make money, pray to unicorns, but make @#$%ing money.
There is a huge difference between lagging indicators and coin tosses. If you're putting money on the line, you should understand the rationale for your trading decisions. Otherwise you might be a victim of spurious correlation (e.g., trading based on moon cycles or some other nonsense that just happens to work out sometimes), or you may not understand the risk (picking up nickels in front of a steamroller, to use an analogy I'm sure you're familiar with).
There is also an argument to be made for capital efficiency. So if you used the back of an axe to hammer nails when you had a proper hammer available, there is room for improvement.
This was not a meaningless argument. It was a good discussion (with a few exceptions that you'll find in most threads).
I learned things I didn't know ...and no one picked up on the utility of my modified correlation formula or understands the the value of redefining lag in a manner in which it's helpful rather than harmful. All those things are good. I'm grateful for everyone's participation.
The point is that all this talk about spurious correlation is meaningless. Had enough of it in graduate school and realized in the end it was useless academia not real world trading (unless you are managing a giant institutional portfolio and no one here is). Any approach, system or method requires you to sit down in front of screen studying charts, setups, historical data, for years to develop a long-term viable approach to making money, a approach that fits with your risk management and works. Debating whether something is a lagging indicator is useless. In the past 10 years, I never made more money from semantic arguments
and the market clearly showed me when my system was based on a moon cycle and not an identifiable entry pattern. I think my point is that semantics and debates of theory do not achieve the goals. The market will tell you your approach is suffering when it rapes your wallet.
Trading discussions are always useful but a debate on whether indicators are lagging or are they useful is useless which was the original point of the OP, not correlations and capital efficiency.
But anything you can learn from is good I guess.
The point is that all this talk about spurious correlation is meaningless. Had enough of it in graduate school and realized in the end it was useless academia not real world trading (unless you are managing a giant institutional portfolio and no one here is).
I agree -- all of these long debates/threads...just makes me roll my eyes...my eyes glaze over in disinterests. It's kind of meaningless in the real world. -- instead of debating...just post your % returns.
I think it is debatable whether those debate threads were debatable
I can't see why they're not useful...it's like monitoring current conditions of a car.
The one who ignores TA tools are bound to screw up in trading. You will find out in the near future and will soon start a thread on how to use MACD, RSI, MA...