thread: Strategies that dont predict future price

Everytime I come on FF to see that a new egy or program, it always starts the thread by calling some future price or breakout. So, I am here in order to contend this by asking posters to post some other egy which doesnt predict some future price or breakout...I want posters to really consider this. So I wish to dedie this thread to egies which DO NOT forecast some future price movement. Instead it presents the notion that price can't be predicted..yet we will build a egy which doesnt predict future price and builds a profit.

I will post a egy after I have time.

Warren buffet buys a stock based on value..without even looking at the price.

If he buys a stock based on value, he's predicting a rise in price with time.

Perhaps it's too late tonight, but I simply don't see the value in creating a egy about placing a stop at which the price isn't likely to move. . .seems like it'd just be easier to build a egy round the prediction of price movement....but great luck to you!!

What I see a lot of around those halls, is long discussions about differing views, once the core of the issue is a difference of definitions of phrases.

Perhaps the thread name wasn't quite accurate.... Or it's very possible that the word calling means different things to different people.

Many price action traders talk of following the market and not calling where price goes. Maybe anticipating would be more proper. But how can we define those terms?? If we enter , we're predicting that price will rise. To say we are not predicting, seems only for want of a better descriptive word. How about trusting?? That word has taboo all over it... but I have to admit, once I enter a transaction, I really do tend to trust I'm right. Or at least that the market ends up actually going in this way. We can not know beforehand where the market will go. So... what's the right word?? (OK, praying and wishing are definitely out) Actually predicting works for me, it has got a great ring to it. Either that, or anticipating expectations.

I'm not knocking anybody's efforts here, but it would appear that a lot of the conversation relies on definitions.

The thing about trading is that you DON'T understand where the price goes. However, what you do will be to manage the risk. You keep the risk low that you win will pay for most of the losses and you gain some of it. Before I examine the entries, I typically examine system's exit signals. The exit is the most significant facet. The first is of course the risk management.

trading will always have a part of prediction, expectation /or anticipation. IMHO...

Not automatically.

What about volatility grid systems where you input a bunch of orders above and below the current price and wait for them to get hit?

What about methods based on the concept of hedging?

What about sytems based on exploting positive swap?

What about sytems based on shooting the spead?

Each the aforementioned are very simple idea's, none of which necessarily require prediction of price direction

Not automatically.

What about volatility grid systems in which you enter a bunch of orders above and below the current price and await them to get hit?

What about methods based on the Idea of hedging?

I created a system some time back where identification trade above and under a specific range of the 15m candle open.

So with the open of the m15 pub, if it moved open x pts identification have a breakout lengthy, when it moved open - x pts identification have a breakout short.

It worked wonders for a while... and I thought I came up with something new

But then I realized 2 things:

1) I wasnt trading price. I had been trading.

2) It existed and its similar to'TheRealThing' open breakout system.

After realizing point , I saw that a lot of folks actually trade time longer than price .

This led me to investigate greatly intro grid/volatility approaches, because it isnt based in time in any way, but on movement independently.

completely agree

trading egy =not knowin where price is moving, but applying machnical rules
(edefining exits, MM)

gaming egy = predicting or anticipating future price movement with descretionary methods

glad to see somebody who agrees nevertheless I really don't see lots of people discussing these issues...

fully concur

trading egy =not knowin where price is shifting, but applying machnical principles
(edefining exits, MM)

gaming egy = predicting or anticipating future price movement with descretionary methods

Interesting. You appear to be operating under the assumption (illusion) that the market isn't predictable, and so trying to predict movement and trading on such view is betting. Of course, if your belief is false (which it is), then calling with optional methods is in fact speculation as it's been for hundreds or thousands of years, and also mechanical/MM methods (which don't capture some real inefficiency or provide liquidity solutions , etc) are nearer to gaming, as you are throwing out your net regardless of the true likelihood of achievement of that particular trade.

Interesting. You seem to be working under the premise (illusion) the market isn't predictable, and so attempting to predict movement and trading on such view is gambling. Of course, if your belief is false (which it is), then predicting with discretionary methods is in reality speculation because it's been for hundreds or thousands of years, and also mechanical/MM methods (which don't catch some true inefficiency or supply liquidity solutions ( etc) are closer to gambling, as you are throwing out your net regardless of the authentic...

The thing is we because traders may understand the probability of achievement of that specific trade but the question comes when what if it goes wrong?

Do we activate the mechanical stop or do we hope for the best for the price to turn into our favour?

Hoping for the best is gambling...

The thing is that we as traders may know the probability of achievement of that particular trade but the inquiry comes when what if it goes wrong?

Do we trigger the mechanical stop or do we expect for the best for the price to turn into our favour?

Hoping for the best is betting...

It depends upon the motives for your having taken the transaction. Yes is betting. When you take a mechanical trade, you are hoping for the best because there is no specific reason for your trade to be successful. You simply took any pattern or anything and you do not know whether that time the likelihood of price moving in your direction is greater or less than your backtested typical (or however you came to the conclusion that you have a statistical edge). If that's the case you will likely wish to utilize a mechanical stop.
If instead you chose your trade for a optional reason - for example your analysis of a scenario and what you expect the market reaction to be - then you can find out quickly/eventually (based on which you are expecting) whether you're right or wrong and exit the market if you see your analysis was incorrect.

Yet my point is that optional trading isn't necessarily gaming (at the common usage of the word) because it is possible occasionally to ascertain with over 50% probability what a given outcome is. Allowed if your optional skills suckthen the outcome will be like you're gaming. But if you do not think it's possible to predict price, then it's clear that you may believe discretionary trading is necessarily betting.