{quote} This makes more sense to me than anything even I had said lol... nice! -CJ-
... lol
Ghost Rider - WWTBMD?
Technical Analysis alone will not give you an edge
- #41
- Oct 31, 2015 10:58am Oct 31, 2015 10:58am
- Joined Mar 2009 | Status: Trader | 25,480 Posts
... lol
- #44
- Oct 31, 2015 11:35am Oct 31, 2015 11:35am
- Joined Mar 2009 | Status: Trader | 25,480 Posts
{quote} Whats even more intriguing is how some traders manage to make money despite unconventional and even superstitious ideas on the market.
In your previous post you mentioned that some "get trade signals" from outer space. Did you mean that literally in that they claim the actual "signal" to buy or sell just comes from space or, is it the study of astrology in space time and the resulting effects that has on everything including us?
IMHO there's a distinct difference. Signals just "floating" down from space fits in the
category. ... lolBut the study of celestial movements is as old as time itself and spans across all cultures. Although many including myself might not understand it, the effects those movements have on all surrounding life is scientifically, mathematically and even spiritually undeniable. So I can see how one could find use of it in trading as well as many other areas of life.
Ghost Rider - WWTBMD?
- #45
- Oct 31, 2015 11:43am Oct 31, 2015 11:43am
Can you profit from random data in the long run? No you can't but is the market really as random as you want it to be?
Many fancy words and calculations are used to indicate that randomness takes place and while I agree that a lot of time it seems unreasonable to tell signals apart there certainly is a time where you can see market inefficiency with your naked eye.
Just look at the nfp release every month. A fluctuation every month in a repetitive manner, could that be explained by a random normal distribution? A repetitive pattern which clearly is influenced by a non random action. Interest rate decisions and unemployment data are not made up by rng. Profiting from those situations is something entirely different but randomly generated price feeds would not contain such a periodically predictable spikes.
Almost every neural network paper published regarding trading deals with the null hypothesis of market efficiency and random markets and they all conclude that markets are not random. (If they properly executed their test is to be questioned but as you can see there is evidence well documented available.)
I don't even understand why randomness is a reoccurring topic in this forum. Isn't it also some kind of believe we have to deal with in the first place? If someone believes the market is truly random why would they even be here and look for ways to exploit the market? I have talked to so many people in the past who have been able to do so in a repetitive manner.
The real issue we are facing here is complexity. Stock markets are moving in a direction based on the state of the economy (which is not random and can be measured!), Forex is even more complex due to the interaction of multiple parties. It's not how well does a company do but more about how well does A do compared to B.
The key word here is emergence! Complex patterns are constructed due to the interaction of entities who follow (simple) rules. e.G. just look at the Game of Life. The rules are simple and well understood yet we can not predict if a state will appear in a simulation run without calculating all the steps. A stock market with changing participant is much more complex.
Can I tell the difference between randomly generated data and a chart? No I can't but I can't even tell you if the price of a given chart will go up or down. I don't trade fundamental or technical but at the end of the month there still is more left than I began with.
While I 100% agree with your conclusion it can not hurt to understand more about the surrounding you are moving in. And for great parts I just like to explore the underlying concepts out of curiosity. If you do a job without actually liking it and naturally want to spend some time with the matter, wouldn't it be better to look out for a new occupation? Just trading for the sake of money sounds awfully to me.
I remember a definite moment in my trading carrier where I asked myself "can it really be that easy"? Trading is not complex and once you have gotten a comprehensive understanding it's almost boring as you just repeat the same steps over and over again. If your expectations are not met go back and see if it's in within given bounds if not do some research.
Of course it is not necessary to know about price/time priority, how order matching works hell a trader doesn't even need to know what a pip is or how bid and ask come into play to profit from the market.
I could probably take any of my friends and turn him into a profitable trader without him even knowing the basics. The only thing necessary is following simple rules (while irrational behavior is probably the only variable that needs to be closely monitored but that is not hard if you just look over his shoulder).
But there is a huge difference between trading profitable for a time or to be able to evolve, improving and adapt to changes and this will only come with understanding the bigger picture. Knowledge has not hurt me so far and that has been the same for every subject in my life so far? So many things you have learned in school will not be particularly useful in your everyday job but they somehow still got you to where you are.
I recall a thread about planet cycles, but luckily there is not the one correct way to trade.
Many fancy words and calculations are used to indicate that randomness takes place and while I agree that a lot of time it seems unreasonable to tell signals apart there certainly is a time where you can see market inefficiency with your naked eye.
Just look at the nfp release every month. A fluctuation every month in a repetitive manner, could that be explained by a random normal distribution? A repetitive pattern which clearly is influenced by a non random action. Interest rate decisions and unemployment data are not made up by rng. Profiting from those situations is something entirely different but randomly generated price feeds would not contain such a periodically predictable spikes.
Almost every neural network paper published regarding trading deals with the null hypothesis of market efficiency and random markets and they all conclude that markets are not random. (If they properly executed their test is to be questioned but as you can see there is evidence well documented available.)
I don't even understand why randomness is a reoccurring topic in this forum. Isn't it also some kind of believe we have to deal with in the first place? If someone believes the market is truly random why would they even be here and look for ways to exploit the market? I have talked to so many people in the past who have been able to do so in a repetitive manner.
The real issue we are facing here is complexity. Stock markets are moving in a direction based on the state of the economy (which is not random and can be measured!), Forex is even more complex due to the interaction of multiple parties. It's not how well does a company do but more about how well does A do compared to B.
The key word here is emergence! Complex patterns are constructed due to the interaction of entities who follow (simple) rules. e.G. just look at the Game of Life. The rules are simple and well understood yet we can not predict if a state will appear in a simulation run without calculating all the steps. A stock market with changing participant is much more complex.
Can I tell the difference between randomly generated data and a chart? No I can't but I can't even tell you if the price of a given chart will go up or down. I don't trade fundamental or technical but at the end of the month there still is more left than I began with.
In trading there is no need to understand how or why something works in order to make money. Just like you don't have to understand the complex technology inside your computer in order to use it......
To be profitable trader you just have to learn the price action patterns, learn how the market responds to news, fundamentals.... then based on that develop framework and strategy......and trade according to that strategy, and manage the risk. That's all.
If you do these things correctly, consistently and with discipline - the money will accumulate...
While I 100% agree with your conclusion it can not hurt to understand more about the surrounding you are moving in. And for great parts I just like to explore the underlying concepts out of curiosity. If you do a job without actually liking it and naturally want to spend some time with the matter, wouldn't it be better to look out for a new occupation? Just trading for the sake of money sounds awfully to me.
I remember a definite moment in my trading carrier where I asked myself "can it really be that easy"? Trading is not complex and once you have gotten a comprehensive understanding it's almost boring as you just repeat the same steps over and over again. If your expectations are not met go back and see if it's in within given bounds if not do some research.
Of course it is not necessary to know about price/time priority, how order matching works hell a trader doesn't even need to know what a pip is or how bid and ask come into play to profit from the market.
I could probably take any of my friends and turn him into a profitable trader without him even knowing the basics. The only thing necessary is following simple rules (while irrational behavior is probably the only variable that needs to be closely monitored but that is not hard if you just look over his shoulder).
But there is a huge difference between trading profitable for a time or to be able to evolve, improving and adapt to changes and this will only come with understanding the bigger picture. Knowledge has not hurt me so far and that has been the same for every subject in my life so far? So many things you have learned in school will not be particularly useful in your everyday job but they somehow still got you to where you are.
Whats even more intriguing is how some traders manage to make money despite unconventional and even superstitious ideas on the market.
I recall a thread about planet cycles, but luckily there is not the one correct way to trade
.
{quote} For sure. However, "superstation" more often than not actually finds a solid base in facts just not understood.
However, there are some that delve into planetary cycles, elliot waves and other arcane subjects.
In your previous post you mentioned that some "get trade signals" from outer space. Did you mean that literally in that they claim the actual "signal" to buy or sell just comes from space or, is it the study of astrology in space time and the resulting effects that has on everything including us? IMHO there's a distinct difference. Signals just "floating" down from space fits in the
- #48
- Oct 31, 2015 12:05pm Oct 31, 2015 12:05pm
- Joined Mar 2009 | Status: Trader | 25,480 Posts
{quote} I understand that you may be referring to the application of concepts learned at the subconcious level. Many great speculators have a kind of 'trader sense' that comes from years of experience, I don't think this is superstitious at all.
However, there are some that delve into planetary cycles, elliot waves and other arcane subjects.
He got his signals from aliens using a Coke bottle with a broken piece of radio antenna sticking out.
... 
Ghost Rider - WWTBMD?
- #50
- Oct 31, 2015 12:12pm Oct 31, 2015 12:12pm
When ever someone fails at trading he starts explaining to the whole world how it is all random, a setup to take money from the fools..how it is not possible. But they always fail to account for people that do make money. They must be..aliens
There are only 3 things that when understood properly and utilized will lead to making money:
1) Reference point (using technical analysis)
2) Time
3) Money management (average win > average loss)
Bruce Lee's words hold the most truth
There are only 3 things that when understood properly and utilized will lead to making money:
1) Reference point (using technical analysis)
2) Time
3) Money management (average win > average loss)
Bruce Lee's words hold the most truth
- #53
- Oct 31, 2015 12:21pm Oct 31, 2015 12:21pm
- Joined Mar 2009 | Status: Trader | 25,480 Posts
Ghost Rider - WWTBMD?
- #55
- Oct 31, 2015 12:28pm Oct 31, 2015 12:28pm
- Joined Mar 2009 | Status: Trader | 25,480 Posts
{quote} A large part of my trading philosophy is that the market indeed is a device to take the money away from fools. By this observation alone one is no longer a fool. k
{quote} I agree. The fools are the ones who make the thing over complicated. They cannot grasp or see the simplicity in trading.
Oh well, it's been fun folks. Thanks! Enjoy the weekend.
Ghost Rider - WWTBMD?
- #57
- Oct 31, 2015 12:44pm Oct 31, 2015 12:44pm
- Joined Aug 2010 | Status: Stare Into the Lights My Pretties! | 795 Posts
{quote} Can a person trade profitably while maintaining that the outcomes of his trades are a manifestation of his will? Perhaps if he can somehow find a justification for taking frequent small losses and rare out-sized wins.
)What actually happens is when you trade profitably, somehow on a subconscious level you adapt instantly to the changing market conditions and that leads you to the correct actions. And the end result feels like you "predicted" the price....but in reality this is not prediction. It's all about adaptation.
That's what trading is all about! No matter what the market throws at you, you have to respond correctly.
If it gives you ranges - use the appropriate strategy.....
If it gives you trends - use the appropriate strategy
If it gives you breakouts, news.... whatever it is..........you get the point?
You have to be able to adapt to ANY situation instantly. This comes ONLY after many years of experience.....and thousands of hours screen time, and thousands of LIVE trades.
- #58
- Oct 31, 2015 12:54pm Oct 31, 2015 12:54pm
- Joined Aug 2010 | Status: Stare Into the Lights My Pretties! | 795 Posts
When ever someone fails at trading he starts explaining to the whole world how it is all random, a setup to take money from the fools..how it is not possible. But they always fail to account for people that do make money. They must be..aliens There are only 3 things that when understood properly and utilized will lead to making money: 1) Reference point (using technical analysis) 2) Time 3) Money management (average win > average loss) Bruce Lee's words hold the most truth {image}
This is spot-on!! I was just about to quote Bruce Lee and then I saw your post 
.....Coincidence? Or Great minds think alike? ....who knows... - #59
- Oct 31, 2015 1:05pm Oct 31, 2015 1:05pm
- Joined Mar 2009 | Status: Trader | 25,480 Posts
{quote}
.. If one were to search you'd see me saying all over the place (in fact it was once my sig),"The market is fluid and ever changing. We must be as well". Hmmmm ....
... maybe time to put that sig back?
Ghost Rider - WWTBMD?
- #60
- Oct 31, 2015 1:11pm Oct 31, 2015 1:11pm
- Joined Feb 2012 | Status: Trader | 21,377 Posts
In trading, you have to be defensive and aggressive at the same time