Why Do We Trade? For Real.

marketsurfer said:
thanks. hence my issue with all the chartmasters on this site. Its really sad to see such hindsight blindness, i mean bias in full effect --trashing the minds of otherwise decent and reasonable folks. surf
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I think you have made some great points in some posts, but I am not interested in battles or taking sides one way or the other. Like everyone I believe some things about trading and disbelieve others but never think I know everything. If charting works for some people - great. More power to them. I even use selected charts for some kinds of trading. I don't understand having an issue with any method or any characteristic (even if true) of other traders. The markets have done far more emotional damage to me that any thread comments have. If all traders agreed on everything, there would be no trading or markets IMO. LOL.
 
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kut2k2 said:
Yes, surf, despite the random process, you really are in a trend.

Here's the proof:

Your first bet: $0

Toss # 1: heads ; Total win: $ 0 ; Your next bet: $0
Toss # 2: heads ; Total win: $ 0 ; Your next bet: $0
Toss # 3: heads ; Total win: $ 0 ; Your next bet: $2 on heads
Toss # 4: heads ; Total win: $ 2 ; Your next bet: $3 on heads
Toss # 5: heads ; Total win: $ 5 ; Your next bet: $4 on heads
Toss # 6: heads ; Total win: $ 9 ; Your next bet: $5 on heads
Toss # 7: heads ; Total win: $14 ; Your next bet: $6 on heads
Toss # 8: heads ; Total win: $20 ; Your next bet: $7 on heads
Toss # 9: heads ; Total win: $27 ; Your next bet: $8 on heads
Toss #10: heads ; Total win: $35 ; Your next bet: $9 on heads
Toss #11: tails ; Total win: $26 ; Your next bet: $0

So putting just $2 of your principal at risk in a timely fashion could've earned you $26.

That's the power of trading with the trend. :cool:


See above. If the trend is sufficiently long, it very obviously can be exploited. But most randomly generated trends are too short to be exploited profitably. And since you never know in advance which trends will be long, trying to exploit them all will make you a net loser.

What any of this has to do with the nonrandomly generated stock market, you've yet to explain.
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Actually, wouldn't a trend indicate something inefficient about a market? After all, something that is predictive, is not priced in to the current price!

This simple example has given me an idea for a new methodology and there is no TA involved in the idea. Thanks. I dealt with Martingale methods twenty years ago but there is always something new to learn by being open to other opinions.
 
StarDust9182 said:
I think you have made some great points in some posts, but I am not interested in battles or taking sides one way or the other. Like everyone I believe some things about trading and disbelieve others but never think I know everything. If charting works for some people - great. More power to them. I even use selected charts for some kinds of trading. I don't understand having an issue with any method or any characteristic (even if true) of other traders. The markets have done far more emotional damage to me that any thread comments have. If all traders agreed on everything, there would be no trading or markets IMO. LOL.
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ok, point taken----- you should chat with Cornix about the market damage he has a website dedicated to this issue. Peace surf
 
Hindsight can sometimes allow someone to look back at price and identify the day, the price bar, the catalyst, the news, the event that changed the price behavioir and marked the begining of trend.
One example is the euro last summer broke 137-139 to the downside under the weight of deflationary data in the eurozone and expected ECB action. Nothing is certain easy and clear
real time and price magnificatly reflects that by not instantly dicounting the euro to parity.
How it gets there is unique in every instance but one can point to that behavioir and say
"Thats trend".
 
marketsurfer said:
Man, this is really twisted logic--- but it's money management/ luckif you were able to profit from the coin flip nothing to do with trends. surf
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The twisted logic is all yours, dude. You're the one who brought up the ten heads in a row (at least a dozen times previously). I show how to exploit it and now you want to pretend it's just luck?? LMAO! That is just so sad.

I've already explained why this won't work for all random trends.

And you've still yet to explain what this has to do with the nonrandomly generated stock markets.

Again, care to revise your pathetically lame definition of trend?
 
StarDust9182 said:
Actually, wouldn't a trend indicate something inefficient about a market? After all, something that is predictive, is not priced in to the current price!

This simple example has given me an idea for a new methodology and there is no TA involved in the idea. Thanks. I dealt with Martingale methods twenty years ago but there is always something new to learn by being open to other opinions.
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Please tell me you're not assuming the markets are as random as coin flips.
 
kut2k2 said:
Please tell me you're not assuming the markets are as random as coin flips.
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IMO each individual coin flip is random, but the sequence of flipping is not a random process. It is very clear to me that the market is not a random event, nor a random walk in my experience. Therefore a trend can't happen in a single coin flip.
 
i am nobody said:
But I think the word "correllelogram" does not exist.
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Probably correlogram, a.k.a. autocorrelation plot in statistical analysis:
The correlogram is a commonly used tool for checking randomness in a data set. This randomness is ascertained by computing autocorrelations for data values at varying time lags. If random, such autocorrelations should be near zero for any and all time-lag separations. If non-random, then one or more of the autocorrelations will be significantly non-zero.
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