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Thread: Higher Edge within a Single Candlestick

  1. #181
    Quote Originally Posted by Alphaomega ;
    quote When it comes to the current market, this statement is only partially true! I gave my argument Limited dollar correction. However, allow me to say it again. Unlike the roulette, the market offers environment which makes it possible for the luck factor to persist for a very long time! You'll have track listing even and out. And the worst part is - there is not any way to know if luck causes your results or maybe not! Based on probability theory...
    Underlying the example of a random distribution is an assumption of little bad expectancy per commerce with frictional costs of trading...which under a gaussian distribution via the Central Limit Theorem will generally towards a normal distribution and always go to zero.... But given that the markets penchant for tails, we might find that a descriptor of the current market is characterized by a variety of steady distribution. You might find that it's the abnormal sigma moves that are accountable for a border over mere luck inter dispersed with phases of arbitrary price behavior, if this is the case then.

    By way of example complex systems such as the financial markets might have brief sharp intervals of significant disruption driven by economic disparities or booms and busts from crowd behaviour as well as other complex physical systems exhibit periods of 'punctuated equilibrium' inter-dispersed with intervals of arbitrary price action and mean reverting behavior. That at least is probably a more apt description of a monetary market than one which can be characterized by an idealized mathematical distribution.

    While random chance and the associated wide fluctuation in potential return distributions can indicate that even a trader with a significant advantage can be unlucky and come reversed, it's more likely that a trader with a definitive edge will experience a positive yield distribution than a negative one...but yes...nothing is certain in this match...hence the caveats applied. An advantage is never a certainty, only a probability... given we are working with a sample of results and not the entire population of results.

  2. #182
    Quote Originally Posted by Alphaomega ;
    quote So, what is the conclusion? The conclusion is that not only we need a sample with large number of transactions, but we also need a high number of samples! This again confirms that it's impossible to eliminate uncertainty and risk from the game of gambling. Everything could be lost by the best dealer in the world at some point. (Since the persistent luck works both ways!!!) .
    Hi Alpha,
    As you said, it's impossible to eliminate uncertainty and risk from the game of trading ... can we say that in every position of our purchase, we must always use a stop loss (or at least a hedging position) ?? From the picture I see that the risk is 5 percent , I presume that this is the stop loss of every transaction (we risk 5 percent of our equity for that trade, characterized by end loss), utilizing a 90% win probability system with R:R (risk:reward) of about 10:1 (please correct me if I am wrong on this). Can you please provide a clue on this under :
    Lets say we have a setup with 80-90% win probability, and we place 2 percent risk on every trade. With R:R (risk:reward) of 2:3 , I think it's going to be a good enough to go. But how about using poor R:R (lets say 3:1 rather than 2:3) installation with really compact TP target ? As I am not a good statistician, I am not certain how dangerous it's going to be in case my draw profit is solely about 1-4 pips (therefore my baldness is about 3-12 pips) ...
    If I have a setup with TP for 20 pips, and SL of 60 pips (having equal R:R of 3:1) , I think it's going to be safer than a setup with little TP (1-4 pips) and little SL (3-12 pips) ... I am afraid that price will hit my SL at first before touching my TP on this little SL ...
    I don't feel that we can trade without SL and hedging, however just close our purchase after X hours or X bars, regardless of what happen, even if we're in a (large) loss position, although we have a setup with gt;95% probability for that trade ... What should we do in this case ?
    Gracias .

  3. #183
    Quote Originally Posted by VEEFX ;
    quote Let me Despacito because you're my wife's favourite song... she along with our daughter only love to piss me off by putting this song on infinite loop when we go on extended road trips. They both have a bug for spanish songs... oh the Havana song only got added to their spotify list. anyways. Here's my two cents on what I do SL and TP ought to be part of strategy development and don't have any place in building/seeking a border. Edge lies in the signal level along with all the stats that are relevant. Once an edge is found (good luck finding one in this life time....

    SL isn't at all risk management as SLs aren't guaranteed by most FX retail brokers.

    What according to you is an perfect risk management? Can you please delve more to this...


  4. #184
    Quote Originally Posted by VEEFX ;
    quote Sorry Guy. Unfortunately, I do not save my deleted posts... I had written a 2-page long article in the 5yrs and no strategy thread on how I view RM. Any strategy that integrates Risk Management (through SL) in the individual trade level is a failed strategy. It will not last for at least 3 yrs... even if you are starring at your commerce channel every second. EDIT: and transferring SL to BE kind position mgmt does not mean it is a secure commerce lol
    Thanks VEEFX...

  5. #185
    Quote Originally Posted by VEEFX ;
    Any plan that incorporates Risk Management (through SL) in the individual trade degree is a failed plan. It won't last for more than 3 yrs...
    With respect, that's a sweeping generalization that would be difficult to prove. And does not CrucialPoint use SL-based RM with his scalping?

    Agree that SL isn't ensured to be filled, if there is insufficient liquidity. But that's true for any order kind.

  6. #186
    Quote Originally Posted by hanover ;
    quoteAs the textbooks say, 8 wins from 10 is luck, however, 800 wins from 1000 is evidence of an edge. It's all about the Law of large numbers - Wikipedia delivering statistical validity. .
    And what about 126 wins from 126 trades,

  7. #187
    Quote Originally Posted by Priceaction1 ;
    quote and what about 126 wins out of 126 trades, image
    that is simply fantastic

  8. #188
    Stop Loss is Reduction Direction, not Money Management
    Murrey Math

  9. #189
    Quote Originally Posted by MoneyZilla ;
    Stop reduction is reduction Direction, not Money Management Recommend to trade for a living?
    Talking of Management, I have the next Manager Agents embedded as part of my automation all working in a cohesive and comprehensive manner for 99% hands functioning... structured approach to system development.Configuration (input parameters) Manager Strategy Manager Account Manager Position(Trade/Portfolio) Manager Entry Manager Exit Manager Development (Profit) Manager Risk/Loss Manager Margin Manager Session (Date per week, Time of Day etc) Manager Environment (Trend/Range requirements) Manager Trend (trending signal) Manager Range (mean reverting signals) Manager Aims (Money/LotSize) Manager Display (On Screen Monitoring) Manager FIFO/Hedging Manager Filtration Manager (Is New Positions Allowed? Allowed? Is this the right time of day/week, Is this the right pair for the current session etc) Alert Manager Compliance (audit/logging/monitoring) Manager Report (stats/dashboard) Manager and recently added DrawDown Manager

  10. #190
    Quote Originally Posted by VEEFX ;
    quote Speaking of Management, I've the next Manager Agents inserted as part of my automation all of functioning in a cohesive and comprehensive manner for 99% hands-free operation... structured approach to program development. Configuration (input parameters) Manager Strategy Manager Account Manager Position(Trade/Portfolio) Manager Entry Manager Exit Manager Growth (Gain) Manager Risk/Loss Manager Margin Manager Session (Date of week, Time of Day etc) Manager Environment (Trend/Range requirements) Manager Trend (trending signal) Manager Range...
    OMG you appear to be missing a Vital HR Manager :-)

  11. #191
    Quote Originally Posted by Copernicus ;
    quote OMG you seem to be Overlooking a crucial HR Manager :--RRB-
    Nope, My Two employee Global PLC will Probably Be Declared for $10 per paycheck as part of my Compliance Manager function LOL

  12. #192
    Ya ok ......... I figure I should devote CP some credit to my learning to be a consistently profitable trader... when I first read a few of his cryptic writing on another thread, I initially was intrigued with the words......(we people can get caught up in verbal masturbation, also believe we have accomplished something.) After some time it just pissed me off and that I closed down all trading forums and slid in the charts and said alright whats legitimate and whats not legitimate --from the bull I have been reading. That's what turned ma about by turning away from the so called trading gurus.... . Its got to be done by the person and all any ace can do is point you in the right direction or piss me off so bad I had to introvert and as always -- do it in my own... Thank you CP for pissing me off. .

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