Although not as pessimistic as tdion. -- I would tend to agree there is some randomness to the market at the lower levels of time. I think most traders struggle in that indicators, which are supposed to help also give a certain amount of bad turns. To trade a small time frame and make good money ; -- you have to be on the button and really know where stuff is at. Also,
I am not sure what is meant by randomness. Up and down. -- well that is true -- can't argue with it. If you were to determine or ask the question of
What is certian? probably nothing that will not give you at least a few losses.
what is the definition of success of trading ? than I will no what the heck everyone is talking about.
[quote=tdion;2080936].... let's exclude billionaires.
They also started from small before become billionaires, right ? But possessed qualities of successful people.
The point is, it is possible to double $1 account to $2, then $2 to $4....$100 to $200, 20k to 40K and so on but certain qualities needeed to be smart to do that and have the right attitude as successful trader.
I don't want to argue on the adverts etc, but need to be smart to filter out which one is genuine.
I told this to my trader friends, if I gave all fishermen the same fishing rods but few fishermen can catch some fish (regard as a hobby) whilst one/two devised the rod differently to catch more, smart enough to keep the money, grow into a more profitable business and eventually becoming rich fisherman.
Same with Tiger Wood, Williams and those successful people. There are thousands golfers, tennis players etc but just few turn pro. My friends, the things is look at our inner self and belief in yourself. I don't want to debate further on this since I met few of them.
it is what it is.... let's keep conversing
tiger is an athlete, and plays in the realm of physical sciences.... he perceives gravity, wind, distance, and the curved surface of the playing field. he has nearly a perfect set of information to perform his tasking.
do we have perfect information? not even close. we don't know where our central bankers live, let alone what their next huge trades will be.
i don't know if soros made a billion dollars from scratch, but a lot of successful people inherited trusts or were born wealthy. look at the bush's and oil....
being positive and smart doesn't do much for you except give you a chance.... ultimately timing and things out of your control will guide your fate....
Hence the reality is that there is no such thing as a "discretionary" trader. Every trade made is either the result of some kind of a rationale, or it is an irrational, random guess.
-- If the former, then by studying enough of a trader's entries and exits, pattern(s) will emerge, which (as you say) can be ultimately be reduced to numbers and rules. Not necessarily a trivial task, but entirely achievable.
-- If the latter, i.e. entries and exits amount to nothing more than random guesswork, then all profit (or loss) is fortuitous.
Keynes (and others) describe the market as irrational. But the trends produced must be qualitatively different to those produced by a completely random process (e.g. trends of heads and tails generated by a coin toss), otherwise nobody could hope to have a positive edge. It would be akin to trying to beat the casino at Roulette. Hence, to whataver extent we can show that there is at least one trader who is indefinitely profitable, there is indisputable proof that exploitable inefficiencies do in fact exist.
If (and I stress IF) the markets are "irrational", then is the answer to fight fire with fire, i.e. to trade irrationally? Well, if we may assume that there are successful traders, and we are told that they have some kind of plan, then that clearly implies that there is a rationale involved. Which brings us back to the first point: anywhere there is a rationale, there are underlying numbers and rules waiting to be unearthed, allowing a mechanical equivalent to be derived.
discretionary trader = lucky idiot
"Hence the reality is that there is no such thing as a "discretionary" trader. Every trade made is either the result of some kind of a rationale, or it is an irrational, random guess.
-- If the former, then by studying enough of a trader's entries and exits, pattern(s) will emerge, which (as you say) can be ultimately be reduced to numbers and rules. Not necessarily a trivial task, but entirely achievable."
It's the "entirely achievable" that I've got to disagree with - this paints traders into the corner searching for elusive Grail systems. A trader may have a core system but still be discretionary about his/her entries. That discretion/intuition is ultimately based on the sum of their experience and influences on what they've seen/heard in the market, so in a perfect simulation of that world, it could be boiled down to a number of rules, but it's not that simple.
Science is not able to perfectly simulate something as simple as snooker balls scattering on impact in the real world. Why should trading be any different?
i'm dropping out of this debate
as usual, nobody has any evidence to support that consistent profiting is obtainable
its the same drivel about "human experience" and "intuition"
somebody PM me when you get some cold hard evidence.... otherwise, sweet dreams with your "discretionary" edge
Tdion, I didn't realise you were after evidence?
I'm a member of Jacko's first group (started in October last year), and I have never seen any better example of market intuition and discretionary trading. And his discretion and instinct does translate into cold, hard, cash.
Good luck in your search for the holy grail
i like jacko but there is nothing stopping him from hitting a huge losing streak.
Actually, yes I do agree - of course it is possible.
But what's suprised me in the time he's been trading is his ability to spot and avoid what would ordinarily be a big losing streak for a trend trader.
Trend traders are usually screwed without a trend. And yet during ranging periods, and even more substantial corrections, he recognises it, trades less and still remains profitable. At what point do you say that can't be luck - it's genuine intuition and insight into the market? 1 year? 2 years? More?
I don't want to discuss the ins and outs of his trading, but suffice to say, I'm a firm believer in rules + discretion.
-- What criteria (variables) is Jacko using to recognise it, and hence are they rational enough to ultimately be "bottled"? (rhetorical question, of course I realize that the answer is for me to start by reading Jacko's thread)
-- How complex, in terms of number of variables, does an approach need to be, in order to be profitable? The more instances we examine, the closer we will get to simulating the master trader's decision-making process. Even if the number of variables grows with the trader's experience, meaning that the ever-evolving simulation is always "one step behind", then that merely raises the next question:
-- How accurate does a simulation need to be, in order to be on-balance profitable? If a discretionary trader makes occasional "mistakes" (which prompts another question: if the approach is discretionary, how do we define a mistake? ), then there must be some margin for error. And if a discretionary trader reaches a point in his career where he is profitable (by whatever definition), then that's as far as the simulation needs to go.
There are undoubtedly several ways of looking at these abstracts, and I'm attempting to think outside of the traditional squares (e.g. that mechanical trading amounts to nothing more than a search for the impossible grail, etc).
You pose interesting questions, I have less interesting answers
...are they rational enough to ultimately be "bottled"?
Well, if by bottled you mean put into a series of hard and fast rules, I'd say no, probably not. But if you mean learnt, then yes, I believe so.
-- How complex,
Reminds me of Fooled by Randomness, where the more information a professional has, the more confident they are of their prediction, but this has no bearing whatsoever on the validity of the final result.
if the approach is discretionary, how do we define a mistake? A mistake in a discretionary approach is simply one which didn't follow the rules, even if it was a profitable trade (I'm sure others would disagree!). You have to embrace a certain amount of randomness and everyone knows you cannot be right all the time - a mistake is only a mistake based on the information available when you made the decision.
Triphop, many thanks for your reply. This is a very "abstract" discussion, I certainly wouldn't blame you if you felt it was going nowhere.
I definitely agree that it's keeping to a plan that equates to accomplishment, as opposed to a profitable trade.
"A mistake in a discretionary approach is simply one which didn't follow the rules....."
I guess it's a case of where we draw the line as to where discretion is allowed to override the rules....... and the only way of knowing that is "experience".
Again, that's very generalised, I'm afraid.
As a programmer, I'm still keen to find, or develop, a "visual" or "discretionary" method that's highly profitable, and take on the challenge of translating it into mathematical rules, and then to an EA. Then, by progressively adapting the rules to simulate the variations in the trader's decision making processes, see how closely we can get the robot to make the same entries and exits. Definitely not a trivial task, and I need to complete my current project first......
Not at all - David I wish you all the best of luck - I can't add anything to that as my programming skills never ran past the video recorder!
The only thing I would say is this - how could you program for something like the decision that "I won't trade today because Bernanke is likely to talk up the dollar"?
Not saying those kind of considerations are always the case, but they make it hard to program unless you've sophisticated AI... in which case wouldn't it be easier just to learn how to do it?
As always - caveated with the fact that I only know one style of trading well, and there are many ways to skin a cat etc
It says you only need $250 in the account to compete, otherwise known as "monopoly money".
Please excuse my skepticism.
There might well be some genuinely "intelligent" EAs out there, but in a competition, they're no more likely to prevail than the others, simply because the sample size is too small. And in any case, any that are world-beatingly good are probably kept well away from the public eye, for obvious reasons.
not an EA but still robot trading
try to find the pdf on him, it is an interesting article
Thanks again for your input.
however, I think it is just Ringlish (Russian English). I wasted time before trying to figure out how to run multiple EAs in MT4... answer was... you can't.
note: for some reason original quote that David quoted did not appear... please refer to David's post for the original quote I'm replying too
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