Jump to content
Sign in to follow this  

Trading Randomness

Recommended Posts

This article linked below is absolutely on point. You can't have confidence in any strategy unless you have tested it and it has shown proof of validity.

We all like to think we are good at spotting patterns, we all like to think we are quick to identify and label, we are all keen to pull that trigger, that's the only plan you need right? No, great for surviving in the jungle, bad for trading.

The truth is that as a survival tactic it's better to think you see a pattern and run away even when there's not really one there, it works for surviving in the jungle, it doesn't work for trading. Same for identification, that's a top, that's a bottom, that's a bull market, that's a bear, run away. It works for surviving the jungle, it doesn't work for trading. In trading you never realise the mistake until after you've pulled the trigger, and then of course it's too late.

So instead of 'off the cuff' decision making you devise one set of rules to govern every trade, fine, but to have the confidence to stick to it it must be well tested. 

Without validity there can be no confidence and without confidence we slide back into the 'off the cuff' calls.

https://traderfeed.blogspot.com/2019/05/trading-psychology-techniques-2-testing.html

image.png.0c4c3adc2859ef5b177efa553641acce.png

  • Like 1

Share this post


Link to post

Back after a long break - howd'y folks!

Yes! I totally agree with this on casey and good post. I like this part a lot "Testing also tells you what doesn't work--and that can lead to a deeper understanding of hidden edges.  Sadly, there are many traders who insist that they will succeed in their trading through sheer passion and willpower."

Randomness is such a weird thing for humans, when what you REALLY need to succeed is consistency. It's tough because we're not robots but it's needed.

Think about saving. You're not going to get anywhere long term by saving £10. £20, £50 a day randomly but then spending random amounts of cash here and there. You'll be far better to know your out goings, and make consistent non-random savings each day.

Think about the gym. Randomness gets you no where. Consistency is the key and the way you know how to train better / more efficiently / hit your targets.

Same goes for trading.

  • Like 1

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Member Statistics

    • Total Topics
      7,424
    • Total Posts
      37,756
    • Total Members
      47,723
    Newest Member
    Smallbear
    Joined 18/09/19 20:46
  • Posts

    • Wow. Just look at the volatility. The price action is erratic to say the least. This has happened before on quite a few occasions in the past.  In one hour from my initial post to this post the price action has reversed. It is all about waiting for a clear signal for which direction these indices are going to go in. 
    • So you have to admit this S&P chart is as bullish as you could get, traders have been waiting for the Fed who haven't disappointed, have refused to break lower during that wait and are just staring at that ATH just a short reach away. Barring a war there seems nothing to hold back the continued march onward and upward. Daily chart; 
    • I think we now have the potential and it is potential shorting opportunity on Dow Jones (Wall Street), S&P 500 (US 500) and Nasdaq (US Tech 100) as well as other indices. The FTSE 100 is not looking too good in advance of Brexit. The 'daily' chart is looking rather bearish. The price action is looking bearish. However the price has not breached any of the key moving average indicators as of yet for the US 500. Hence why I am using the word potential in terms of trading opportunity. Some of the ultra aggressive traders will already be short the S&P 500 and other similar indices but if they are wrong the price does not continue downwards then they will be out quickly. 
×
×