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Why predict?
- Thread starter EmRock
- Start date
This "random-market" approach is pretty much the basis for a "coin-flip system" where a coin is flipped and one goes long or short depending on which side it lands on with a profit target greater than the stop loss. It may seem mathematically sound but it is not.
For instance, say that your stop loss is 1 pt and your profit target is 2 pts. Although the market may have a 50/50 chance of going up or down, since you are expecting it to go up or down by different amounts, the chances are no longer 50/50. Therefore, you are more likely to trigger your stop then your profit target which throws off the statistical edge.
For instance, say that your stop loss is 1 pt and your profit target is 2 pts. Although the market may have a 50/50 chance of going up or down, since you are expecting it to go up or down by different amounts, the chances are no longer 50/50. Therefore, you are more likely to trigger your stop then your profit target which throws off the statistical edge.
not as you guys said it is not predicatbale. market is pretty simple and very predicatbale.
a simpel example, like yesterday BCSI ran up so much, what will you think, all what I think is "people will take profit today", see, from the opening, BCSI is just heading south, I shorted 2000shares in the pre-market and then cover it at dip, made 10k+ there, then what will you reason? some people were desperate, who? those who did not buy it t yesterday and those who shorted it at the wrong time, they will seize the dip and drive the stock up , I bought it there 1000shares and sold it at the morning high, anotther 5k grand.
I did another trade, yesterday TWB is in sharp drop. what will you reason? I just think that is a good covering point if I shorted it before earning, so I bought 5000shares at 27.85, then sold it at 28.5, I know I must get out there since some guys will short it around there since some short sellers missed yesterdy's sharp drop, I shorted 2000shares there, then covered at the morning low.
I never trade a market which I do not have a reason to trade. if you believe the market is random, then you are totatlly wrong and you need work very hard to get those common senses!
BEAR IN MIND: if you have no reason in a trade, then forget about the trade! even you are in a winning trade, you will lose too since you do not know what you are doing, why you are in that trade!
a simpel example, like yesterday BCSI ran up so much, what will you think, all what I think is "people will take profit today", see, from the opening, BCSI is just heading south, I shorted 2000shares in the pre-market and then cover it at dip, made 10k+ there, then what will you reason? some people were desperate, who? those who did not buy it t yesterday and those who shorted it at the wrong time, they will seize the dip and drive the stock up , I bought it there 1000shares and sold it at the morning high, anotther 5k grand.
I did another trade, yesterday TWB is in sharp drop. what will you reason? I just think that is a good covering point if I shorted it before earning, so I bought 5000shares at 27.85, then sold it at 28.5, I know I must get out there since some guys will short it around there since some short sellers missed yesterdy's sharp drop, I shorted 2000shares there, then covered at the morning low.
I never trade a market which I do not have a reason to trade. if you believe the market is random, then you are totatlly wrong and you need work very hard to get those common senses!
BEAR IN MIND: if you have no reason in a trade, then forget about the trade! even you are in a winning trade, you will lose too since you do not know what you are doing, why you are in that trade!
is the gamblers' theory.
when a tiger/wolf attacks their preys, they will not randomly do that. they know when/why/which target, they are particularly patient to wait sideline even though they are hungry, very hungry, if they attack whatever prey they come across, they know they may be killed most likley, before they attack, they need observe their prey to get an idea about their prey, only the odd is very good, they will risk their life to get the delious food!
everyone knows a company's Q report will affect the stock price significantly, but do not bet on which side, since that is unknown! gamblers will bet on the trade, lately they find they lose shit and on the wrong side, a professional tarder who makes living on that will wait, let the market tell him/her which way, then based on the common senses he/she have, find a right reason to initiate a trade, 80~99% time they will strike right and if they realized they are wrong, they immediately cut loss and run!
most ameatures are in trading just for the excitement of the trading game, even they lose their shit or put their family on the street or they hide their loss or exeragtered ther gain , they still think they are doiing business and they can win back their stakes! GAMLERS!
when a tiger/wolf attacks their preys, they will not randomly do that. they know when/why/which target, they are particularly patient to wait sideline even though they are hungry, very hungry, if they attack whatever prey they come across, they know they may be killed most likley, before they attack, they need observe their prey to get an idea about their prey, only the odd is very good, they will risk their life to get the delious food!
everyone knows a company's Q report will affect the stock price significantly, but do not bet on which side, since that is unknown! gamblers will bet on the trade, lately they find they lose shit and on the wrong side, a professional tarder who makes living on that will wait, let the market tell him/her which way, then based on the common senses he/she have, find a right reason to initiate a trade, 80~99% time they will strike right and if they realized they are wrong, they immediately cut loss and run!
most ameatures are in trading just for the excitement of the trading game, even they lose their shit or put their family on the street or they hide their loss or exeragtered ther gain , they still think they are doiing business and they can win back their stakes! GAMLERS!
Quote from Paulds11:
Any interpretation of the market must take into account a wide brief of variables... those variables are too disparate and the interactions between them too complex to compute and produce an accurate predictor of price action.. or even response to price action across all variables like "time in trade" or the price Vs risk profile for a trade. We can approach a marginally significant model but this must be coupelled with money management rules to limit account loss or Margin call
Lets say a person could spend some time and think up the above paragraph.
It could be named: "marginally significant model". So lets name it MSM.
It needs two bandaids as stated above. MMR1 and MMR2 are applied.
such a thing is not just a simple puzzle and for 100years no one has or will produce an exact model of the markets allowing them an advantage that still wont have significant weaknesses..
Lets grant that 200 years have elapsed and there is no "exact model". Lets name this missing thing: "Dead Horse"
There is no DH to replace the MSM (with its band aids MMR1 and MMR2).
The scene is now set for an alternative, perhaps. But maybe not.
As a result we must simplify the market into components which aim to group those variables so that each becomes more controllable within any model we choose to use to simulate that market ...yes?
It looks like a return to the old drafting board to use some SOP that have been around for a while and that have a track record represented by the Conventional Orthodoxy CO.
The tools we have had for many years are still the best, namely
Price action
Volume
Market sentiment
Fundamental information
Open interest
The behavior behind closely linked market products
Market Psychology
These are recognizable and they are called "tools"; for short: TP, TV, TMS, TFI, TOI, TTBBCLMP, and TMP.
Seven tools and they are the best anbd have been proven for many years. This is CO at its bestand I can see that they, when applied properly are going to get superior and best results.
This isnt rocket science, its mathematics.. but ultimately its about understanding people not oversimplified or simplified systems.
Math>>>>>>>understanding people>>>>>>just in the right way>>>>>>
thats why in my opinion lines of support and resistance really are the best tools avalble because others use them
super cogitation!!!!! Math>>>> people>>>>>just in the right way>>>>>>support, resistance>>>>>>Because"BECAUSE OTHERS USE THEM
what happened to MSM with MMR1 and MMR2 and all those T's.... S and R emerges as the winners???????
... and we can see the result of this daily in an uncanny way that this price action bounces or pushes through it with gusto
What I like about this is the entries and exits and reversals. I see the uncanny part clearly. There's an R and there's an S. Price action is acting......I even feel the gusto....... and price will be only doing one of two things. I smell a coin flip coming in the response, maybe. I know we are focussed on people and I know a bounce or push is going to happen. I know you are a predictor too. BUT.......
as an example "A failure to transverse " FTT sounds alot like a resistance line to me... its already here.. and i dont need to clutter my graphs unnecessarily to reach the same effective conclusion really..
FTT may sound like a resistance line to you but there is bad news in reality. An FTT is a price point in time. It is NOT a horizontal line on a price chart. You are thinking about people and you are predicting a gusto bounce or a gusto push through. The FTT is a signal for a reversal. I gather that you do not do reversals simply because you have no entry information or exit information in your post. This may seem obtuse to you but before people get around to reversal strategies using the seven T's, they uually are chatting about entries and exits and are not in the market all of the time as an FTT user would be.
The FTT is not cluttering your graphs for reaching the same effective conclusion. We know the R and S is there. we know you are looking at people and predicting. What do you do when Price action,Volume, Market sentiment, Fundamental information,
Open interest, The behavior behind closely linked market products, and Market Psychology are being observed when R or S is being approached.
when an FTT occurs a beginner trade is done. the beginner reverses. This happens for beginners 4 to 7 times a day. as an SCT learner advances he goes through FIVE more stages of trading to reach 20 to 40 trades a day.
At these SIX skill levels R and S are not on the table. R and S change all of the time during a trading day. So how do you keep watching people to update R and S during the day and how do you predict which of the two possibilities you think are possible are going to happen at the updated R and S you have annotated on your chart?
The answers to my Q's may be that they are secrets that have been kept and handed down generation by generation by practitioners of the CO.
Paul
paul
you writing about trading is very complicated. I never read chart, never read news, never anaylize a company's balance sheet , never use technical indicators likeEMA/MCAD or economic indicators to initate trades! forget about those things, you will see the market. I just want to know when suckers will come, when people get greedy, and when people will panic, and when people will get desperate, when people feel tired, even where people's stop loss are ... those things are very predictable, so 90% time I always on the right market side
market is pretty simple, just a bunch of people (some who has holdings, and those who want to join, and those who are watching), who cares triple digit earning, who cares bad outlook, who cares lawsuit... forget about it. then you will see people starts to get greedy because their holdings are up up.... and you know where people's stop loss are: they will put somewhere around so called suppurt/resistantce.... he he...
you writing about trading is very complicated. I never read chart, never read news, never anaylize a company's balance sheet , never use technical indicators likeEMA/MCAD or economic indicators to initate trades! forget about those things, you will see the market. I just want to know when suckers will come, when people get greedy, and when people will panic, and when people will get desperate, when people feel tired, even where people's stop loss are ... those things are very predictable, so 90% time I always on the right market side
market is pretty simple, just a bunch of people (some who has holdings, and those who want to join, and those who are watching), who cares triple digit earning, who cares bad outlook, who cares lawsuit... forget about it. then you will see people starts to get greedy because their holdings are up up.... and you know where people's stop loss are: they will put somewhere around so called suppurt/resistantce.... he he...
Regarding edge vs psychology - my psychology has been pretty similar since I started trading, yet my profits have varied significantly during different periods. The reason is that some periods I had a great edge in the markets, and others I had a marginal edge or no edge at all.
I would say that a certain psychological makeup and personality is necessary to do well trading, but it is not sufficient. Just look at many traders who had periods of large success, and then periods of failure or mediocrity. Did SACs profits fall dramatically after the dotcom boom because Steve Cohen suddenly became a different person? Or was it because the edges they exploited dried up?
Ultimately, all trading profit that does not come from luck, comes from the ability to place a trade at today's price, and correctly predict an above average likelihood of the trade turning a profit in future, relative to the risk taken. That is inherently a predictive activity, and has nothing to do with psychology. It doesn't matter how confident you are, if your method sucks then you are going to lose money.
I would say that a certain psychological makeup and personality is necessary to do well trading, but it is not sufficient. Just look at many traders who had periods of large success, and then periods of failure or mediocrity. Did SACs profits fall dramatically after the dotcom boom because Steve Cohen suddenly became a different person? Or was it because the edges they exploited dried up?
Ultimately, all trading profit that does not come from luck, comes from the ability to place a trade at today's price, and correctly predict an above average likelihood of the trade turning a profit in future, relative to the risk taken. That is inherently a predictive activity, and has nothing to do with psychology. It doesn't matter how confident you are, if your method sucks then you are going to lose money.
A general question.
If a binary is constructed using a non-binary basis set is the outcome of the binary operation not contingent upon the characteristics of the non-binary set?
Like "if such and such happens, then do operation 1 or 2". What is it that determined "if such and such happens"?
lj
If a binary is constructed using a non-binary basis set is the outcome of the binary operation not contingent upon the characteristics of the non-binary set?
Like "if such and such happens, then do operation 1 or 2". What is it that determined "if such and such happens"?
lj
Quote from Vienna:
Just imagine for a second that what Jack Hershey says were actually true.
Just imagine there actually were a matrix through which the market could be seen at any moment and responded to perfectly.
Just imagine there are people gullible enough to believe his claim of 3 times the daily range without ever having a single losing trade..
just imagine
ther is no wrong about prediction.
if i am not able to predict, how can I trade and how can I hold and exit? if the market rallied crazy, I know there is a selloff. if the market panic dropped, I would predict there is a rebound.
very obvious, only naives try to bet on anything that is moving.
to me, focus on the predictable trades and neglect those I can not predict, I always win.
look at VMW today, or WSM, I shorted WSM in the opening, then covered it at the dip and when it starts to rebound, I jump on it and go long. as for VMW, I did not shorted it in the opening, but after it dropped to some point, I predict those stop-loss are token and I am ready to join the Long gang, I predicted where people's stop loss are based on my technical anaylsis, I bought it at the exact bottom! but I know I can not predict those sudden news, bad Q, good Q, bad companies, lawsuit, DSL die, ....
I know what I can predict and what I can not predict. trade those predictablel trades while not those unpredicatable trades, and you are way to the elite trader club!
if i am not able to predict, how can I trade and how can I hold and exit? if the market rallied crazy, I know there is a selloff. if the market panic dropped, I would predict there is a rebound.
very obvious, only naives try to bet on anything that is moving.
to me, focus on the predictable trades and neglect those I can not predict, I always win.
look at VMW today, or WSM, I shorted WSM in the opening, then covered it at the dip and when it starts to rebound, I jump on it and go long. as for VMW, I did not shorted it in the opening, but after it dropped to some point, I predict those stop-loss are token and I am ready to join the Long gang, I predicted where people's stop loss are based on my technical anaylsis, I bought it at the exact bottom! but I know I can not predict those sudden news, bad Q, good Q, bad companies, lawsuit, DSL die, ....
I know what I can predict and what I can not predict. trade those predictablel trades while not those unpredicatable trades, and you are way to the elite trader club!