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Meditations on Extremistan - Nassim Taleb

  • #41
  • Edited Feb 2, 2025 8:09am Feb 1, 2025 4:36pm | Edited Feb 2, 2025 8:09am
So, tomorrow it might be time to return to the straight path way of PVSRA (maybe), after having conducted many mindfuck experiments, ranging from reversal systems, pattern to pattern, or to applying Sisse's "missed the train" philosophy. Thank you forever to the PVSRA System, the long-lasting way of trading and meditating, especially the TVT method created by Fisher and Traderathome—with some personal modifications.

Maybe next month I can complete the prop challenge whose profit target is beyond what is reasonable in a month, particularly for average traders who are just slightly below and above the water's surface.

The trading edge has certainly appeared often over a decade near the London Open or shortly after it, but in practice, patience and discipline are often not maintained (like a robot). As for risk, mathematically everything is already sorted, with no major errors remaining. For any EMA you use, it doesn’t matter; it’s just a matter of having a longer or shorter period.

Note: First Pic from July 2019, Second Pic from Jan 2025, and also check the trades from 2012 when it was still a primitive prototype system: https://www.forexfactory.com/thread/...25#post5924525
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  • #42
  • Edited Feb 2, 2025 9:24am Feb 1, 2025 7:29pm | Edited Feb 2, 2025 9:24am
So The Guidelines:

Rules of 7
PVSRA TVT 1/3 ATR 14 Days

  1. Pair Selection: Scan all 28 pairs using ATR (14 Days). A broader range, such as 99 pips and above, might be a better choice for trading pairs as it provides more room for SL (risk). Minimum SL is 33 pips.
  2. Optimal Maximum Leverage for Forex: 10:1; Kelly = SR/σ, where SR = 0.1 and σ = 1% per day. However, we use a scale target, Percentage Daily - Trading Day Profit Target, TP/SL 1/1 (like a Sniper: "aim small, miss small") - based on 1/3 ATR 14 Days. Stop Loss is mandatory. Never target the full 3/3 ATR, but 2/3 ATR is acceptable. One trade at a time.
  3. Timing: Enter after LO or near LO. It’s better to stop trading at LC or ND (due to the risk of crazy slippage).
  4. Pattern: Price should be in the upper zone of the chart for Long trades and lower zone for Short trades. Avoid trading in the middle chart zone. Price in M15 should move towards or retrace back across the mean of Blue Dragon. No trade if no pattern appears.
  5. Trends: Golden Belt stacked below Blue Dragon for Long, and above Blue Dragon for Short. Check full-chart bars in H1 or D or W for a broader trend perspective.
  6. Key Levels & Volume: Pay attention to consolidation above or below whole/half levels, S/R levels, and high-volume activity. Avoid trading during Red News events.
  7. Entry Points: Ideal Blue Dragon angle: Long at 2 o’clock, Short at 4 o’clock.

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YOLO 15 minutes after a Red-Folder News Event (not recommended)

  1. Buy if the 15-minute candle closes as a green candle (pay attention to price retrace).
  2. Sell if the 15-minute candle closes as a red candle (pay attention to price retrace).
  3. TP/SL 1/1 (like a Sniper: "aim small, miss small") - based on 1/3 ATR 14 Days.

----------------------------------------------------------------------------------------------------------------------------
For all reversals (not recommended)

Pure Price
Longs: First simple rejection of low or lows;
Shorts: First simple rejection of high or highs.
On larger time frames, it is more accurate compared to smaller time frames: https://www.forexfactory.com/thread/...6#post15120136
SL: At the lows or highs

----------------------------------------------------------------------------------------------------------------------------
For Blueberry Funded Challenge (Prop Firm) 1-Step Static TP 10% DD -6%

  1. TVT setup only if it occurs near or after LO
  2. M15 TF.
  3. 0.71% per day risk/target (to reach 10%, or down -6%, 14x wins or 8x loss)
  4. One trade at a time.
  5. Margin percentage limit must be above 150% (it means you could open 2 position max, or 4:1 Lev, margin about 500%)
  6. TP/SL 1/1 (like a Sniper: "aim small, miss small") - based on 1/3 ATR 14 Days.
  7. Exit position at least 15 minutes before Red News (Blueberry 10-minute rule).

------------------------------------------------------------------------------------------------------------------------

Last Friday, we had 11 pairs out of 28 that met the criteria of having a range greater than 99 pips. Among these 11 pairs, the ones that met the trading criteria sequentially during London Open (LO) were GBPCAD (buy), USDCAD (buy), GBPUSD (sell), and EURCAD (buy). Although the signals that appeared during LO tended to be zigzag and the initial trend was flat, they still managed to hit the profit target of 1/3 ADR (14 Days) in pips. The USDJPY buy signal came late after the New York Open (NYO) due to a trend reversal (EMA crossing).

In the example image, although somewhat flat, middle zone (see pic), USDCAD's 1/3 range yesterday was 35.4 pips (Check post #35. I didn't take the buy signal yesterday because I was busy dealing with the GU or UCAD reversal signal or reversal pattern), the target was hit, and indeed, PVSRA has remained powerful for a long time.

So, if we're talking about Edge without clear rules and a complete story, it's not really an Edge.
Few aspects of psychology, many aspects of mathematics.

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  • #43
  • Feb 2, 2025 5:37am Feb 2, 2025 5:37am
"Brainy Quote of the Day"
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  • #44
  • Edited 2:52pm Feb 2, 2025 11:37am | Edited 2:52pm
Quote
When you shake someone's deep sense of self-worth, leaving a scar in their ego, they will persistently try to diminish you through petty arguments & obsessive captious criticism of your actions, just to soothe the wound.

Source: https://x.com/nntaleb/status/1877537747713294520

+ Studying the psychology of individuals will never allow you to understand that of the market (determined by extremes, not sum).
+ Rationality for indiv. does not translate into "rationality" for group.
+ Classifying psychology as "science" reminds me of the Reagan administration's classification of Ketchup in school cafeterias as "vegetable".
+ Pschologists classifying "IQ deniers" as a pathology. I am a "psychology denier", that is "bullshit denier".

Quote
Love Some Risks
Antifragile revolves around the idea that people confuse risk of ruin with variations –a simplification that violates a deeper, more rigorous logic of things. It makes the case for risk loving, systematic “convex” tinkering, taking a lot of risks that don’t have tail risks but offer tail profits. Volatile things are not necessarily risky, and the reverse. Jumping from a bench would be good for you and your bones, while falling from the twenty-second floor will never be so. Small injuries will be beneficial, never larger ones. Fearmonging about some class of events is fearmonging; about others it is not. Risk and ruin are different tings.

Source: https://medium.com/incerto/the-logic...g-107bf41029d3

(Nassim Nicholas Taleb)
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  • #45
  • Edited 4:43pm Feb 2, 2025 4:23pm | Edited 4:43pm
aDtr Today

12 currency pairs with a range of ≥ 99 pips.
There are large gap downs and ups for all pairs above 50 pips.
Tariff Wars
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  • #46
  • Feb 3, 2025 9:49am Feb 3, 2025 9:49am
After being underwater for so long, a lightning-fast event today turned the account green again. Finally lucky again. Lol
What a day, what a meditation!
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  • #47
  • Edited 5:50pm Feb 3, 2025 9:59am | Edited 5:50pm
Quoting RoelsMajor
After being underwater for so long, a lightning-fast event today turned the account green again. Finally lucky again. Lol What a day, what a meditation! {image}
Luck comes when no mindfuck exists, you could have run away and lick your wounds, but you believed your edge and stayed the course.
  • #48
  • Feb 3, 2025 4:34pm Feb 3, 2025 4:34pm
aDtr Today

Last night's madness has passed, whether it was big profits, big losses, or recovery. Welcome the new trading day. Here are 14 pairs with a range of >= 99 (13 + NZDJPY). See you after the London Open. Lel
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  • #49
  • Feb 3, 2025 6:22pm Feb 3, 2025 6:22pm
Doing some work on my psychology was something that made the difference for me in my earlier days. I found yoga was super helpful for my mind as I am generally a high octane thinker.
  • #50
  • Feb 4, 2025 10:58pm Feb 4, 2025 10:58pm
aDtr Today

Today's ADR shows around 15 pairs, plus EUR/USD recorded an increased range of about 91. There might be some changes.
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  • #51
  • Feb 4, 2025 11:02pm Feb 4, 2025 11:02pm
Quoting R2F-Trading
Doing some work on my psychology was something that made the difference for me in my earlier days. I found yoga was super helpful for my mind as I am generally a high octane thinker.
Perhaps you're a troll among psychologists, aren't you? If not, then it is certainly beneficial, but not every aspect of the mind falls under psychology, and human life cannot be separated from the mental. However, that's not psychology—that's life. That's you.

Some offer many life guides in the form of psychology, which are usually more suitable for atheists whose minds are empty, on average, of guidance. For religious people who believe in God and still follow God's commandments like me, it may not be all suitable, some ok.

Cheers

Quoting driven18
{quote} Luck comes when no mindfuck exists, you could have run away and lick your wounds, but you believed your edge and stayed the course.
Luck always comes to those who exist at the extreme edges in a randomly driven world. For those with real-world skills, only then can you say it's not luck, but purely skill and hard work. Mindfuck is something everyone has, right?
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  • #52
  • Edited Feb 5, 2025 12:23am Feb 4, 2025 11:37pm | Edited Feb 5, 2025 12:23am
Logical Error Du Jour
Correction of Today's Logical Fallacy

Cathie Wood argues that the world today is heavily influenced by companies that were once unprofitable or could only make minimal profits. Her ARK Fund invests significantly in companies that she believes can change the world and gradually generate positive cash flow. She is less fond of mature companies with abundant cash reserves that are popular with short-term investors. Nassim comments that just because a company was initially unprofitable or barely profitable does not mean it will succeed in the future.

This mistake by Wood is called:
Modus Ponendo Ponens, or "Modus Ponens": If P then Q, and P is true, then Q is true. There are several variations of this reasoning, such as affirming the consequent, denying the antecedent, and evidence of absence. The argument is valid, yet its correspondence to reality (Via Positiva) is not clear.

  1. If today is Tuesday, then John Wick will go to the Continental Hotel. (P → Q)
  2. Today is Tuesday. (+P)
  3. Therefore, John Wick goes to the Continental Hotel. (+Q) ?

A valid argument with truth is contrasted by its counterpart, "Modus Tollens": If P then Q, not Q, then not P. This argument follows Via Negativa rather than Via Positiva. Variants include denying the consequent or the contrapositive.

  1. If I were a pencil-wielding assassin, I could use a pencil to kill people. (P → Q)
  2. I cannot use a pencil to kill people. (–Q)
  3. Therefore, I am not the assassin. (–P)

Amor Fati

Source: from Opa Taleb's thinking with slight modifications; and now Cathie from Hero to Zero.

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  • #53
  • Edited 9:14am Feb 5, 2025 6:00am | Edited 9:14am
Quoting RoelsMajor
Logical Error Du Jour Correction of Today's Logical Fallacy Cathie Wood argues that the world today is heavily influenced by companies that were once unprofitable or could only make minimal profits. Her ARK Fund invests significantly in companies that she believes can change the world and gradually generate positive cash flow. She is less fond of mature companies with abundant cash reserves that are popular with short-term investors. Nassim comments that just because a company was initially unprofitable or barely profitable does not mean it will...
Interesting..I think what you mean is sort of like these expressions that I tailored to my trading, as I leave in the present, Now.(I work hard at it)

1. "Market will do what Market will do and I am grateful it is doing something" or

2. "No one has any clue what will happen a second from now"

P.S. When you live in "Now", there is no Mindfuck, it just Is what it Is and You are is what You really are.
  • #54
  • Feb 5, 2025 7:02am Feb 5, 2025 7:02am
Quoting driven18
{quote} Interesting..I think what you mean is sort of like these expressions that I tailored to my trading, as I leave in the present, Now.(I work hard at it) 1. "Market will do what Market will do and I am grateful it is doing something" or 2. "No one has any clue what will happen a second from now" P.S. When you live in "Now", there is no Mindfuck, it just Is what it Is and You are is what You really are.
Point 2. In terms of predictions, we are often wrong, especially in fields where the results are largely random. In skills-based areas, however, in certain domains we can make predictions because, scientifically, it tends to be that way. For example, in the field of medicine, when a patient is in shock due to significant blood loss, we can provide first aid for hypovolemic shock by replacing as much of the patient’s body fluids as possible and administering blood transfusions. This is standard practice to prevent death. No one knows when death will come, but in medicine, if untreated, the outcome is very close to the patient’s death.

During my professional medical studies, I also learned more than enough psychology—even to the full life sciences level, namely psychiatry. So we doctors understand the mindfuck better than psychologists; they can only guess what lies on the surface, while we know it down to the level of neurotransmitters in your body.

No one says that in either world—whether in fields that are often random or those with less randomness—people do not work hard.

So accepting and understanding the skill-luck continuum is very helpful.
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  • #55
  • Edited 9:37am Feb 5, 2025 9:08am | Edited 9:37am
Quoting RoelsMajor
{quote} Point 2. In terms of predictions, we are often wrong, especially in fields where the results are largely random. In skills-based areas, however, in certain domains we can make predictions because, scientifically, it tends to be that way. For example, in the field of medicine, when a patient is in shock due to significant blood loss, we can provide first aid for hypovolemic shock by replacing as much of the patient’s body fluids as possible and administering blood transfusions. This is standard practice to prevent death. No one knows when...
First congratulation on becoming a doctor. I am sure it was not an easy task but you did it and now can offer your knowledge and experience in helping sick and suffering humans.

My point 2 (2. "No one has any clue what will happen a second from now") tailored and relates to trading.

As for Luck, my expression is: "You got to be Lucky when Luck comes around."

I understand what this expression means to me..if you have any thoughts on what does it mean to you(or any reader), as you red it, please post.
  • #56
  • Feb 5, 2025 2:58pm Feb 5, 2025 2:58pm
Quoting driven18
{quote} First congratulation on becoming a doctor. I am sure it was not an easy task but you did it and now can offer your knowledge and experience in helping sick and suffering humans. My point 2 (2. "No one has any clue what will happen a second from now") tailored and relates to trading. As for Luck, my expression is: "You got to be Lucky when Luck comes around." I understand what this expression means to me..if you have any thoughts on what does it mean to you(or any reader), as you red it, please post.
For your information, I have been a medical doctor for 13 years as my main profession, and I trade forex, crypto, and stocks as a hobby since 2007.

Moreover, the expression "you have to be lucky when luck comes" indicates that your mind isn't that clear right now. Maybe you've been consuming too much psycho vodka, Bro! No one will admit that, at extreme limits, luck plays a major role in success in a random world, yet no one would believe that misfortune can sometimes be the cause of failure. In the real world, there are plenty of random factors as well, but not as many as in the market.

Quote
Philosophers and thinkers like Nassim Taleb emphasize that our world is dominated by uncertainty. According to Taleb, luck is a critical component of our lives, particularly in environments characterized by high randomness (for instance, in trading or investing). He argues that while skill and preparation matter, there is always an element of luck that can lead to extreme successes or failures, which are often not fully attributable to personal ability.
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  • #57
  • Feb 5, 2025 4:44pm Feb 5, 2025 4:44pm
It's all timing, imo. In Life & in the Markets
Luck is something usually attributed after an event.
eg. I decided to go to the doctors today. Lucky I did as I have xxxxx and it can be fixed.

all the best, trade safe, trade well
  • #58
  • Feb 5, 2025 4:55pm Feb 5, 2025 4:55pm
aDtr Today

12 Pairs
Yesterday, the average range was small with a lot of consolidation; today might see bigger moves.
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  • #59
  • Edited 8:40pm Feb 5, 2025 6:54pm | Edited 8:40pm
Quoting RoelsMajor
{quote} For your information, I have been a medical doctor for 13 years as my main profession, and I trade forex, crypto, and stocks as a hobby since 2007. Moreover, the expression "you have to be lucky when luck comes" indicates that your mind isn't that clear right now. Maybe you've been consuming too much psycho vodka, Bro! No one will admit that, at extreme limits, luck plays a major role in success in a random world, yet no one would believe that misfortune can sometimes be the cause of failure. In the real world, there are plenty of random...
I find your interpretation of my statement "You got to be Lucky when Luck comes around." wrong and totally not understood as it relates to markets.

I admit that Luck plays a tremendous role in the random world, but you have to be "Present" in our world(successful trading) when you are able to receive that Luck.

And, bro, I now drink Tequila but somehow you correctly did figure out hat I used to drink Vodka. It must be that 13 years of doctor in you .

Cheers,
  • #60
  • Feb 5, 2025 9:06pm Feb 5, 2025 9:06pm
Quoting driven18
{quote} I find your interpretation of my statement "You got to be Lucky when Luck comes around." wrong and totally not understood as it relates to markets. I admit that Luck plays a tremendous role in the random world, but you have to be "Present" in our world(successful trading) when you are able to receive that Luck. And, bro, I now drink Tequila but somehow you correctly did figure out hat I used to drink Vodka. It must be that 13 years of doctor in you . Cheers,
Everyone has their own understanding, as long as it’s not anarchic, it’s okay to have different opinions. However, my source of income for the past 13 years has never been from trading. I have experienced winning big trades (in my currency) from time to time, and I have also experienced losses (with complete TE proof, here, a long time ago). Congrats if you have already successfully made regular withdrawals from trading, whether it's forex or futures. Cheers
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