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Admit it - your profits are based on luck

  • #301
  • Sep 22, 2008 6:18am Sep 22, 2008 6:18am
Quoting Ted1983
@lostinspace:

He's sayin how do you know your "better way" is better if you admit the inherent flaws in backtesting and indeed forward testing. Yes, statistical assumptions have a certain validity but the market sructure which your system is founded on might change unbeknown to you.
Might change, and might change unbeknown to me. Sure that's a possibility and like they say 'past performance is no guarantee of future results', but with that philosophy we'd never get anything done would we? Everything we do in life has an inherent danger, we can only go by our past experiences and based on probability as opposed to luck everything should be ok when we drive our car/cross the road/eat food/travel by air etc etc. And that's all trading is, probability.

Why is my way a 'better way'? That depends on what it's being compared to I guess.
  • #302
  • Sep 22, 2008 6:29am Sep 22, 2008 6:29am
Quoting hanover
I challenge anybody who's posting here to actually prove anything.

-- Those who aren't trading profitably (myself included) can't prove that those who have traded profitably for several years won't continue to do so. The "if I haven't been successful myself, then it's clearly impossible for anybody else to succeed also, therefore trading must be luck" inference just doesn't wash.

-- Those who are trading profitably, and believe that it's due to their superior knowledge and skill, can't really prove that their edge will last indefinitely.

If you can't prove anything, I'm afraid you're just speculating. And if everybody here is speculating, the argument can never be resolved.

Time for me to move on.

David
There's really no need to prove anything either way even if we could, just like trading this isn't about certainties it's about speculating on probabilities.

The probability, for reasons already stated, is that profitable trading is due to skill rather than luck.

It's interesting to note that most of the luck theorists don't seem to be trading profitably, kind of supports my point about human nature and it's psychological defence mechanisms in a way.....
  • #303
  • Sep 22, 2008 10:28am Sep 22, 2008 10:28am
Quoting lostinspace
There's really no need to prove anything either way even if we could, just like trading this isn't about certainties it's about speculating on probabilities.

The probability, for reasons already stated, is that profitable trading is due to skill rather than luck.

It's interesting to note that most of the luck theorists don't seem to be trading profitably, kind of supports my point about human nature and it's psychological defence mechanisms in a way.....
Lostinspace,

Agreed, but the probabilities are vague, and can't really be calculated in the same manner as those in Craps or Roulette. But I agree that if a method has proven profitable in the past, over a large enough sample of trades, then the logical response would be to assume that it's providing an edge, and therefore continue trading it. The only alternative would be to quit altogther.

Judging by the lack of authoritative statements in this thread, I'd guess that not too many of the posters here are making a living from trading. In other words, those saying that "trading is skill" have yet to prove it for themselves, and are therefore basing their views on statements made by others.

One final point: I wonder if the "trading is luck" proponents are basing their argument around automated or indicator-based trading. As we know, most EAs are curve fitted to past data, and hence have a limited shelf life. I suspect that 'discretionary' methods that are based around more 'robust' abstracts like trend, S/R, momentum, correlation, candle patterns, etc are more likely to be profitable than an EA where any edge is dependent on how 'accurately' the indicators are calibrated. If we assume that line studies (e.g. S/R, Fibos) are more 'visible' (i.e. no scope to vary any parameters; they are more timeframe independent) to a wider audience, and are therefore more likely to be watched and acted upon, then they're more likely to fit with any 'self fulfilling prophecy' effect (see my earlier post #272). Alas, these abstracts are more difficult to code; I've never seen an EA that bases its entries or exits around S/R (prior salient candle highs/lows), for example.

David
  • #304
  • Sep 22, 2008 10:35am Sep 22, 2008 10:35am
The people making money on this thread don't feel the egotistical need to defend their position. That's what I see. Profitable traders should have left their egos when they became consistently profitable.

"Look I don't come to your work and tell you how to cook fries."
It really is that easy.
  • #305
  • Sep 22, 2008 12:01pm Sep 22, 2008 12:01pm
Quoting hanover
Judging by the lack of authoritative statements in this thread....

David
What sort of authoritative statements were you expecting exactly?

As regards automated vs discretionary trading, AI can be a powerful tool and I'm sure there are lots of black boxes which trade using a bit more than a couple of MA's crossing

There you go, you're a software developer, that could be a very lucrative project! I'll bring the strategy (based on skill!), you provide the software!
  • #306
  • Edited 11:13pm Sep 22, 2008 6:06pm | Edited 11:13pm
Gambling, luck, probability, skill, call it what you will. Trading can be brutal and I think it’s the way this system is setup. When you tear down the iron curtain you will be able to see who is taking and making the real money here. IMHO it’s your broker, and his bank. Why you ask? Good question LOL... It’s a business and like most if your business is not making money your not in business. Just like in the real world when you do business you enter into a contract and that’s exactly what we did with Joe broker.

So now you’re doing business with Joe broker who came up with the necessary money to become a white label broker for a large clearing house, and purchase a MT license.

After time big clearing house sees that Joe broker has enough customers and money, and not so dependent on big bad clearing house. Joe broker is now able to see his customer’s positions, and backup occasional customer’s wins and withdrawals. So in order not to become the next "REFCO” Joe broker dose the smartest thing he can. He sets his consistent losing customers on his own server without clearing anything. He leaves the consistent winners and most risky traders in the hands of the White Label clearing house, that way Joe broker keeps the money of the losers, and get his commission. Joe broker is not out to screw his customers it’s just what he needs to do in order to stay in business.

Now you’re trading with Joe broker and the positioning size of all his customers is getting out of balance, and there is a strong trend, Joe brokers clearing house stands to lose a lot of money. So the dealing desk specialist over at the clearing house sees suddenly there is a big difference, and 1000 customers are long USD/EUR on a total of 150 standard lots and only 100 customers are short on a total of 23 standard lots, the dealing desk specialist can hedge the house exposure buying 127 lots. I like to call this trend consolidation or reversals LOL.

So when we WIN a trade can we justify it by saying we outsmarting Joe broker and his bank? Maybe… When we LOSE a trade can we just say we were unlucky and blame it on that fib level, indicator or trading system? Maybe. We define clearing houses as the last part of the string, the point when the trades really go to the market or the liquidity provider, the one who will take the risk of accept your trades if don't clear in the real market, in others words, the owner of the dealing desk. So you got to ask your self who stands to benefit the most in this business is it Joe broker, or the trader who is doing business with him?

Anyway I was trying to keep this short and as less boring as possible, sorry for all of the rambling on. I hope I have not bashed anyone’s toes, beliefs, or systems. That is not my intention here; I just wanted to add some insight into the thread.

Regards,

Agentfx
It's me...
  • #307
  • Sep 22, 2008 8:49pm Sep 22, 2008 8:49pm
Quoting tdion
So no matter how skilled you are..... no matter how exceptional your trading aptitude.... no matter how much experience....

you are nothing without your better half: the market.

She is your dance partner. You don't control her. She controls herself. Your skills and timing might be impeccible, but she can ruin the dance routine.


Egotists, stop patting yourself on the back, and give the market her due when you make your profit. And by the same token, newbies don't get too down on yourself over your losses either.

I think that this frame of mind is directly correlated to personal trading frustration.
The way is narrow
  • #308
  • Sep 22, 2008 9:23pm Sep 22, 2008 9:23pm
Is anyone going to get tired arguing about this? No minds are going to be changed here.
  • #309
  • Sep 23, 2008 12:37am Sep 23, 2008 12:37am
Quoting hanover

Judging by the lack of authoritative statements in this thread....

There's a great thread by Darkstar here, for anybody who wants to take the time to read it. And I found this one by Rusty to be interesting also.

Anyway, I said I'd left this thread..... LOL...... but I just wanted to thank you for sharing.

David

hanover David

The way business is done on the interbank market isn't really relevant to the topic of this thread but anyway, both posts you linked to are filled with inaccuracies and irrelevancies unfortunately, and pretty much none of it applies to anything the average bucketshop or retail trader does.

What sort of authoritative statements were you expecting exactly, you never did say.


lol, why is it that some people can never sustain a conversation or debate on these types of forums, or is the reason obvious
  • #310
  • Sep 23, 2008 9:33am Sep 23, 2008 9:33am
Quoting lostinspace
both posts you linked to are filled with inaccuraciesand irrelevancies unfortunately, and pretty much none of it applies to anything the average bucketshop or retail trader does.
It's one thing to claim someone's comments are irrelevant but to boldly declare they are inaccurate is quite another.

I'm really very curious about this. Can you back up your claim with specific examples? I'm particularly interested in "inaccuracies" in Darkstar's posts. I've long considered him to be the real deal.
  • #311
  • Sep 23, 2008 10:58am Sep 23, 2008 10:58am
Quoting tdion
So no matter how skilled you are..... no matter how exceptional your trading aptitude.... no matter how much experience....

you are nothing without your better half: the market.

She is your dance partner. You don't control her. She controls herself. Your skills and timing might be impeccible, but she can ruin the dance routine.


Egotists, stop patting yourself on the back, and give the market her due when you make your profit. And by the same token, newbies don't get too down on yourself over your losses either.
Hey Guys!!! I’ve been thinking and instead of complain about our losses or mistakes.
Maybe we should focus in how to change that fact and discuss about what is the best way to trade.
For a start we can discuss about following trend. Check this threat.
http://forexfactory.com/showthread.php?p=2237387#post2237387
  • #312
  • Sep 23, 2008 11:14am Sep 23, 2008 11:14am
Quoting opie999
It's one thing to claim someone's comments are irrelevant but to boldly declare they are inaccurate is quite another.

I'm really very curious about this. Can you back up your claim with specific examples? I'm particularly interested in "inaccuracies" in Darkstar's posts. I've long considered him to be the real deal.
Hi opie999, I haven't been through every post of every thread and quite a lot of the information he posted was accurate as far as I know, but there were several inaccuracies that various people pointed out in their replies/questions which he never responded to. Some of the them I know were inaccuracies which makes me question just how accurate the other stuff is that I don't know about.

I'm happy to discuss it further if you like but maybe a relevant thread of his would be a more appropriate place?
  • #313
  • Sep 23, 2008 11:37am Sep 23, 2008 11:37am
Quoting lostinspace
Hi opie999, I haven't been through every post of every thread and quite a lot of the information he posted was accurate as far as I know, but there were several inaccuracies that various people pointed out in their replies/questions which he never responded to. Some of the them I know were inaccuracies which makes me question just how accurate the other stuff is that I don't know about.

I'm happy to discuss it further if you like but maybe a relevant thread of his would be a more appropriate place?
Fair enough, thanks.

Sure don't want to hijack this thread but it would seem, I don't know, inappropriate some how to start a thread dedicated to picking apart someone else's.

Anyway, I'll peruse the posts/threads in question more closely. It'll be a good exercise in critical thinking.
  • #314
  • Sep 23, 2008 3:54pm Sep 23, 2008 3:54pm
OK, so apparently I must spend time defending my position.

Lack of authoritative posts: folk whose goal seemed to be taking swipes at the original poster, like discussing his college education. There was also a considerable amount of heat at one earlier point, IMHO.

From memory I said I thought that "not too many" (as opposed to "absolutely zero") people posting in this thread were making their primary income from trading. Of course I could be wrong, but I still suspect that to be true. I wasn't intending to be provocative, nor was I targeting anyone in particular. If I upset anybody, I apologize.

I've deleted the post containing the irrelevant and inaccurate comments.

Back on topic, I made the points I wanted to back in post #300, for whatever they're worth. If I'm wrong, well it really doesn't matter.

Sorry if this sounds conceited, but I haven't learned a huge amount from this thread. Everybody knows that some people believe that trading is "luck", while many others see it as an exercise in exploiting positive expectancy, and the reasons why or why not are fairly self-explanatory. This topic has been discussed here many times before.

Please, pretty please, can I go home now?

David
  • #315
  • Sep 24, 2008 1:15am Sep 24, 2008 1:15am
Quoting hanover
OK, so apparently I must spend time defending my position.

Lack of authoritative posts: folk whose goal seemed to be taking swipes at the original poster, like discussing his college education. There was also a considerable amount of heat at one earlier point, IMHO.

From memory I said I thought that "not too many" (as opposed to "absolutely zero") people posting in this thread were making their primary income from trading. Of course I could be wrong, but I still suspect that to be true. I wasn't intending to be provocative, nor was I targeting anyone in particular. If I upset anybody, I apologize.

I've deleted the post containing the irrelevant and inaccurate comments.

Back on topic, I made the points I wanted to back in post #300, for whatever they're worth. If I'm wrong, well it really doesn't matter.

Sorry if this sounds conceited, but I haven't learned a huge amount from this thread. Everybody knows that some people believe that trading is "luck", while many others see it as an exercise in exploiting positive expectancy, and the reasons why or why not are fairly self-explanatory. This topic has been discussed here many times before.

Please, pretty please, can I go home now?

David
lol, of course you can go home, no-one was intentionally holding you hostage

Thanks for replying though, I don't think it's unreasonable to expect someone to support their opinion when challenged in fact isn't that the way debates and discussions work, unless like you say they're blindly basing their view on statements made by others, or just repeating parrot fashion something they've heard or read somewhere else without really understanding what they're saying.

I think if you can filter out the noise it's been an interesting, educational, and entertaining thread, I'm fascinated by psychology, especially of other market participants.

Cheers!
  • #316
  • Sep 24, 2008 10:41am Sep 24, 2008 10:41am
Common guys let´s be honest who of us is making his living on Forex… and who is just practicing?
  • #317
  • Sep 24, 2008 10:59am Sep 24, 2008 10:59am
Quoting Marcuse
Common guys let´s be honest who of us is making his living on Forex… and who is just practicing?
No-one Marcuse, we're all just eccentric millionaires who enjoy watching screens with little lines and numbers on......it fills in the space in-between the nurse coming round with our medication, and anyway it beats dominoes
  • #318
  • Sep 24, 2008 11:39am Sep 24, 2008 11:39am
Quoting lostinspace
No-one Marcuse, we're all just eccentric millionaires who enjoy watching screens with little lines and numbers on......it fills in the space in-between the nurse coming round with our medication, and anyway it beats dominoes
SO TRUE
Same Whore .... Different Dress
  • #319
  • Sep 27, 2008 7:47pm Sep 27, 2008 7:47pm
Anyone got any idea what has happened to Tdion?

His display pic and all his profile is gone, real strange.
Living the adventure in my head.
  • #320
  • Sep 27, 2008 8:59pm Sep 27, 2008 8:59pm
Did anyone predicted the subprime crisis? I mean those investmant banks, lehman brothers, wamu and hundreds of super funds have gone bankrupt in the past few months. How could they not foreseen it? They been in the market for years longer than us and yet they r the first to go. Have they been gambling or speculating their way through?
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