Why do you think the stock market is not negative expectation?
Why Is The Obvious Not So Obvious?
- Thread starter nysestocks
- Start date
If your trading expectation is a negative expectation, you will be part of the 90% of traders who lose and only gambling. However, there are 10% of traders who are highly successful and make all the monies. They have positive expectation in their trading systems. And if you have negative expectation in your trading system, you are only gambling. Go to Las Vegas and gamble there. Atleast, you will get free rooms, free food, free drinks. If you lose in the stockmarket, you get squat. If other traders are making monies, why is it negative expectation for them? Educate yourself. It is your best move. Whether your trading system has a positive expectation or edge is up to you. You have to backtest your trading system to see if it makes monies in a consistent basis. If not, pack it in and head to Las Vegas.
Are you trading on a positive expectation?
My trading system is positive expectation or I would not bother trading. Might as well go to Las Vegas if I just want to gamble. You should not be trading if you do not have positive expectation. That means you have a trading edge. If not, go back and work on your trading system and backtest it. Expectation is just a mathematical formula that you use. It was taught in college.
Right, but if a positive expectation existed, then why is it always stated that past performance doesn’t guarantee future returns? If the expectation isn’t consistent, is it a true expectation?
Expectation is viewed under a huge number of samples. We are talking about 100s or 1000s of trades. You can get lucky and win 7-10 straight trades, the same way you can lose 7-10 straight trades. That is the function of expectation. Does not invalidate the fact that you have positive expectation. The only consistency is that you will win over the long haul, and make lots of monies if you have positive expectation. The only thing that matters and the only thing you should be concerned about. Stop asking needless questions that does not help you. Go study and be a good trader.
Can you find something* which is going up at the moment? If so, why not open a long position and hold it until it stops going up?
Alternatively, can you find something* which is going down at the moment? If so, why not open a short position and hold it until it stops going down?
* There are many thousands of things to choose from. ETFs, stocks, commodities, cryptos. There's always something strongly going up, and always something strongly going down, so why not just jump on board for the ride?
A poster on the Crypto Assets forum has been successfully gambling this way recently.
Alternatively, can you find something* which is going down at the moment? If so, why not open a short position and hold it until it stops going down?
* There are many thousands of things to choose from. ETFs, stocks, commodities, cryptos. There's always something strongly going up, and always something strongly going down, so why not just jump on board for the ride?
A poster on the Crypto Assets forum has been successfully gambling this way recently.
If you want to be successful trading the markets you need to align yourself with the facts of the market. This comes from careful study and research of the markets. Not this silly thread where some people think some magical answers or guidance can be found or delivered. It won't.
So, what are the facts of the market?
Well, basically, it's either moving up or it's moving down. So far this year, it's roughly 50/50 between up days and down days. In trending markets it can get slanted a bit in either direction, but usually not by much as it's a zero sum game.
Simplistically, you'll then need to buy when it's going up and sell (or stay flat) when it's going down.
I'd say a successful trading model needs to be built first on some very basic principles. And then more sophistication can be added as your understanding hopefully grows. All this comes from study, experience and research.
For Friday, I'm sure many were expecting up and only thinking up, ignoring the facts of the market which is that it also goes down.
So, what are the facts of the market?
Well, basically, it's either moving up or it's moving down. So far this year, it's roughly 50/50 between up days and down days. In trending markets it can get slanted a bit in either direction, but usually not by much as it's a zero sum game.
Simplistically, you'll then need to buy when it's going up and sell (or stay flat) when it's going down.
I'd say a successful trading model needs to be built first on some very basic principles. And then more sophistication can be added as your understanding hopefully grows. All this comes from study, experience and research.
For Friday, I'm sure many were expecting up and only thinking up, ignoring the facts of the market which is that it also goes down.
Yes but go easy on adding sophistication, otherwise you can fall into the trap of curve fitting.
https://www.thechartist.com.au/over-optimization-or-curve-fitting
Why is the obvious..., not so obvious
That would entail changing human behavior - LMAO
I'm curiously watching to see how well AI fairs - doubtful any better than humans or bots
I do think AI will be quicker at responding to live events as they occur
But..., that's why stop losses were invented
RN
That would entail changing human behavior - LMAO
I'm curiously watching to see how well AI fairs - doubtful any better than humans or bots
I do think AI will be quicker at responding to live events as they occur
But..., that's why stop losses were invented
RN