Being Right = Winning?

[Triggerfish]

Try approaching your strategy from the "being wrong" angle, knowing that sometimes, perhaps more often than not you'll get lucky and take home some money and work out your stops and limits from that angle.

Interesting.....ok, so what is your advice then when if a trader can see the charts and everything is telling him that the market will go in a particular direction and will arrive at a particular price, this is all before the trade is even placed!

Are you going to advise that trader to back down on that conviction and limit his chances of maximising his potential profits?.....and more importantly, can you even explain why the trader has such abilities?.....because that vision turned out to be true.

 

[BeginnerJoe]

Interesting.....ok, so what is your advice then when if a trader can see the charts and everything is telling him that the market will go in a particular direction and will arrive at a particular price, this is all before the trade is even placed!

Are you going to advise that trader to back down on that conviction and limit his chances of maximising his potential profits?.....and more importantly, can you even explain why the trader has such abilities?.....because that vision turned out to be true.

The "guy" on the other side of your trade has a known win rate of 99.5%. You need to scale back your conviction to 0.5% confidence level. Otherwise, the math just wouldn't add up.

 

[the hare]

The "guy" on the other side of your trade has a known win rate of 99.5%. You need to scale back your conviction to 0.5% confidence level. Otherwise, the math just wouldn't add up.

The guy on the other side of your trade might be an extremely profitable trader with a win rate of around 18%

I'll be drinking with such a character in around 20 minutes time.

 

[BeginnerJoe]

The guy on the other side of your trade might be an extremely profitable trader with a win rate of around 18%

I'll be drinking with such a character in around 20 minutes time.

Maybe you should teach him some coin tossing. That should bring his win rate up in no time.

 

[15 min tlb]

The guy on the other side of your trade might be an extremely profitable trader with a win rate of around 18%

I'll be drinking with such a character in around 20 minutes time.

Julian on the dole que? 80 % of the time sitting depressed and upset?

 

[bbmac]

No - not will go - beacuse no one knows for certain what will happen next - none of us can predict- but his analysis may tell him this is the greater probability. And-yes he should ' lump on ' consistent with his money management rules that has been optimised for het edge he trades - If it is ' top rated ' set-up re that edge.

Interesting.....ok, so what is your advice then when if a trader can see the charts and everything is telling him that the market will go in a particular direction and will arrive at a particular price, this is all before the trade is even placed!

Are you going to advise that trader to back down on that conviction and limit his chances of maximising his potential profits?.....and more importantly, can you even explain why the trader has such abilities?.....because that vision turned out to be true.

 

[15 min tlb]

Interesting.....ok, so what is your advice then when if a trader can see the charts and everything is telling him that the market will go in a particular direction and will arrive at a particular price, this is all before the trade is even placed!

Are you going to advise that trader to back down on that conviction and limit his chances of maximising his potential profits?.....and more importantly, can you even explain why the trader has such abilities?.....because that vision turned out to be true.

A load of times we are right , but the market behaves irrationally ,80 % fail at trend trading because 80 % of the time the market ranges ,we see trends and set ups where none exist , random data transactions appear as set ups.

Always bet small and approach the trades with caution.

 

[15 min tlb]

No - not will go - beacuse no one knows for certain what will happen next - none of us can predict- but his analysis may tell him this is the greater probability. And-yes he should ' lump on ' consistent with his money management rules that has been optimised for het edge he trades - If it is ' top rated ' set-up re that edge.

This would imply discretionary trading based on instincts and guts must be almost impossible, since the market may be playing tick by tick assault on the trader"s judgement.

 

[bbmac]

I don't see that this follows - If trading based on one's own guts and instincts provided one with a quanifiable edge then an edge is an edge. Personally I prefer a more more solid ruleset within a discretionary environment such as my own edge, but it horses for courses and whatever suits/works for some doesn't necessarilly work for another (s.)

I think the most important thing is knowing what an edge is, knowing what yours is and how it typically performs, and what are it's known/experienced and theoretical potential performance metrics and extremes based on probability.

G/L

This would imply discretionary trading based on instincts and guts must be almost impossible, since the market may be playing tick by tick assault on the trader"s judgement.

 

[bbmac]

During WWII they did a load of random, random chaos and probability analysis as to where the German Luffwafe may bomb next in the blitz...convinced they had found a pattern they evacuated the most probable areas and of course sods law kicked in and where the population had been evacuated to got hit ! In other words there are patterns and clusters as you suggest even in entirely in random sequences. I agree that it is importnat to know in what state a market exists technically (if that is the basis of your edge) and it can only exist in one of 3 states on any given t/f;

a. classically trending - ie a series of fractal price swing HH's and HL's-up / LL's and LH's in a downtrend
b. generally trending - not as neat as a classic uptrend - you will see a general move up or down with a few H's in a downtrend maybe the odd HH (without their being an oppsoing uptrend started,) and vice versa.
c. classically ranging - a seemingly random collection of fractal swings - eg HH,s L's, LH's, HL's LL, etc...

This information will enable us to decide whether the greater probability is to get 'with trend' or otherwise direction on the t/f (s) of interest to us.

G/L

A load of times we are right , but the market behaves irrationally ,80 % fail at trend trading because 80 % of the time the market ranges ,we see trends and set ups where none exist , random data transactions appear as set ups.

Always bet small and approach the trades with caution.

 

[Triggerfish]

The "guy" on the other side of your trade has a known win rate of 99.5%. You need to scale back your conviction to 0.5% confidence level. Otherwise, the math just wouldn't add up.

fftopic: BeginnerJoe, I expected a lot better from you, even though your comments were "off-topic" as the title is about being right and not about being wrong.....a wee bit negative are you not?
The figure you presented is the business relationship between the "guy" and his customers(traders).....therefore has no bearing on the trader because being right allows the trader to be on the right side.....as the market is always right!

The only reason the maths don't add up is because of your own fabrication and illusions.

 

[Triggerfish]

No - not will go - beacuse no one knows for certain what will happen next - none of us can predict- but his analysis may tell him this is the greater probability. And-yes he should ' lump on ' consistent with his money management rules that has been optimised for het edge he trades - If it is ' top rated ' set-up re that edge.

Sorry bbmac, you know am going disagree with you again on the underlined bit but that is because we see opposite sides.....I used to think like you but not anymore.

Interesting when you say "lump on".....don't know if you play poker at all, you know when you are on the table, with the cards you have combined with all the cards on the table, the river.....you just have that knowing that no matter what happens, you "KNOW" you are going to win this hand so you go "all in".....is this a similar definition of your "lump on"?

And what is your definition by "top rated"?

 

[Shakone]

Sorry bbmac, you know am going disagree with you again on the underlined bit but that is because we see opposite sides.....I used to think like you but not anymore.

Interesting when you say "lump on".....don't know if you play poker at all, you know when you are on the table, with the cards you have combined with all the cards on the table, the river.....you just have that knowing that no matter what happens, you "KNOW" you are going to win this hand so you go "all in".....is this a similar definition of your "lump on"?

And what is your definition by "top rated"?

In cards it can be certain that you win, you can KNOW. In trading it's not so clear cut.

So you say you know things about price. For what period of time. 5 mins? An hour? A day?

If you know over that time period, then you know the high and low over that time period, right? So just state what the high and low will be over a time period, and do it 10-15 times to demonstrate, and then it will be clear. Looking forward to it.

 

[Brumby]

being right allows the trader to be on the right side.....as the market is always right!

I would like to be on the right side as you described. I just need you to tell me the trade scenario that tells me that I know I am on the right side before I take the trade. This will be the third time I am asking you this question. You have so far avoided answering it.

 

[the hare]

Maybe you should teach him some coin tossing. That should bring his win rate up in no time.

Not necessarily

 

[bbmac]

Hi

I don't play poker. I will answer your questions as below:

When I say ' lump on ' - I mean that not all set-ups that make up an edge may be equal. For eg I have some set-ups that make up my edge that have a historically higher strike rate than others - so does it make sense for me to risk the same amount on all set-ups given this ? - No of course not - so the risk is increased on higher strike rate set-ups. Even in poker I don't accept that the outcome is absolutekly 100% guaranteed so even ' lumping on ' the higher strike rate set-ups doesn't mean I know the outcome in advance - I am still playing the edge as I have previously described.

By ' top rated ' - I mean per the paragraph above - the set-ups that are part of my own trading edge that have exhibited the highest strike rate over the total sample I have stats for. The methodology centrral to my edge rates each set-up that devlops to a given constant rule set/criteria - and the set-up achieves one of 4 ratinngs that determines the risk i use for each set-up that is traded. The top rated set-ups are those that have the highest historical strike rate and other criteria that I am unable to discuss on an open forum as the edge is proprietary.

G/L

Sorry bbmac, you know am going disagree with you again on the underlined bit but that is because we see opposite sides.....I used to think like you but not anymore.

Interesting when you say "lump on".....don't know if you play poker at all, you know when you are on the table, with the cards you have combined with all the cards on the table, the river.....you just have that knowing that no matter what happens, you "KNOW" you are going to win this hand so you go "all in".....is this a similar definition of your "lump on"?

And what is your definition by "top rated"?

 

[BeginnerJoe]

fftopic: BeginnerJoe, I expected a lot better from you, even though your comments were "off-topic" as the title is about being right and not about being wrong.....a wee bit negative are you not?
The figure you presented is the business relationship between the "guy" and his customers(traders).....therefore has no bearing on the trader because being right allows the trader to be on the right side.....as the market is always right!

The only reason the maths don't add up is because of your own fabrication and illusions.

You have demonstrated no evidence of being right, or on the right side. Until these are proven, you are quite possibly wrong and therefore quite possibly off-topic. Since the market and those who can control the market are always right, you cannot be right because you are not the market nor can you control the market. The probability of your successfully coat-tailing the market or those who control the market is only 0.5% of the time. So we can safely conclude your are off topic most of the time in this thread.

 

[wackypete2]

More hot air...

 

[15 min tlb]

If you are wrong you are unlikely to win.....as this provokes emotions and reactions.....unless you turn a wrong decision into a right one over time.....meaning more stress and emotions.....should it turn out to be right, it means your initial timing is out!.....which confirms you were wrong in the first place!

You only get paid for being right, you don't get paid for being wrong.....so being right is crucial.

Being right therefore is the most important element......Being right allows one to be on the path towards success but that right depends on how right you are.....The conviction you have.....The ability to be "right consistently" is the key to long term success.....Having that "conviction" allows one to increase a higher percentage to the trade!

Thoughts?

The important thing is to be on the right side of the market , most traders do this by using ema 23 on several time frames , if price is above the ema 23 trade only longs, and if price is below ema 23 trade short.cut your losses and run your profits by using a trailing stop in trending markets.

 

[15 min tlb]

The purpose of trading is to make money, not to be right — a distinction that separates trend-following from other trading philosophies.

http://www.trendfollowing.com/whitepaper/lucky_monkey.pdf