No such thing as confirmation.
What about confirmation of your own analysis and the expected move necessary for the trade fit your criteria necessary for an edge?
•S: (n) confirmation, verification, check, substantiation (additional proof that something that was believed (some fact or hypothesis or theory) is correct) "fossils provided further confirmation of the evolutionary theory"
No such thing as confirmation.
I thought confirmation conditions are used in a basic trend following systems to attempt to reduce the number of false signals (J., Schwager, 1999).
For a basic breakout system a confirmation condition might be the number of thrust days or the number of days (Time delay) required before you enter a position.
E.g. If you had a basic breakout system where you trade every breakout of 56 days you may have a confirmation condition where you require three up-thrust days to enter the trade.
This might achieve:
- Less whipsaws
- less profit on the trade
The term "confirmation condition" can be a bit misleading I rkn because it isn't really confirming anything, but it might decrease the number of false signals. Have some affect on your success rate I suppose.
If you can prove that breakouts have a higher probability of continuing the trend after some sort of confirmed condition then it would have merit.
IMHO for get confirmation and think probability
Such as what? A break out? A pause and reversal of trend to indicate a new trend has stated? Or any other TA 101 gumph?
Well yes. That is what confirmation is for me. A breakout trader for e.g. they will enter a trade when price breaks through their perceived confirmation point. If the breakout of holds for the day this is their confirmation that the pattern they want to trade, which is the pattern that provides their edge, is currently in existence. Doesn't mean the trade trade is going to make money, only that you are in a trade that gives you the greatest chance of survival per the rules of your system.
What about confirmation of your own analysis and the expected move necessary for the trade fit your criteria necessary for an edge?
In relation to trading before confirmation, IMO without confirmation of your analysis you have no edge, therefore no trade.
Well yes. That is what confirmation is for me. A breakout trader for e.g. they will enter a trade when price breaks through their perceived confirmation point. If the breakout of holds for the day this is their confirmation that the pattern they want to trade .
....If you have a trading plan in place, then you should wait for the price action to confirm that it conforms with your trading plan before you trade it.....
Please explain!!
Interested in how you can rate a prospective trade-- probability---unless youve tested every known variant.
Couldn't image why anyone other than punters would take a trade without testing!
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