Just on that note ... The best entries are often found at the spike extremities.... and a high percentage of the 'obvious" Stop loss levels are more often than not the best entry points ..... From my experience, rushing entries through impatience creates the most unwanted "heat" in any given trade situation.
Exactly. If we feel we need to increase a stop to allow for a likely spike, we should just delay the entry.
brty said:
I always thought that all market participants were there to make money, made definite decisions about when to buy and sell and didn't just put in 'random' entries and exits.
I find it amazing that anyone could think the markets are random. As you say, there is reason behind every action and every participant - they're not monkeys throwing darts (even if the result is the same!), and even then, monkeys don't throw darts randomly either.
So Cynical said:
I cant help but think that's a crock...with enough information you can put percentages to likely out comes but there's always a random element that can determine the final outcome
The percentages are irrelevant. The outcome is decided by human action, and if we were completely informed, we know what these actions are and how they will move the market.
WayneL said:
we will never have enough information to predict systems like the stock market
Of course not - we'd have to know what every participant is going to do. They're not going to tell us, especially not so far in advance that we could do something about it.
Snake Pliskin said:
I like your enthusiasm for the topic. But anything other than limiting losses is about being right. Limiting losses is part of the numbers. Being right is about being right.
I feel like I'm getting a trophy for 4th place now
. I disagree, I've made adjustments other than limit losses that make me less 'right', but they significantly increase my expectancy, and that is what trading is about. If my risk amount is already at an amount that is acceptable for me, why should I lower it? Why would I want to lower it? The goal is to make money, not to limit losses to minute amounts. A good trader has such an edge that the issue of trade size is not risk, but comfort.
But the initial stop guarantees a loss if hit. That affects the numbers.
Not sure what you mean? Are you suggesting other stops may be more important because they can 'guarantee' break-even or profit?
brty said:
Coin tosses are clearly not random, biased coins or not, not a smart example to use. I can toss a coin and get 20 heads in a row, with the first 20 tosses. I can take the same coin and toss it another 20 times and get 20 tails in a row. I'm a good tosser .
Of course it's all random, otherwise it would all be too much to think about
:.
WayneL said:
The point I am trying to make is that random <> randomness.
Isn't randomness just a noun? The trouble I have with debating 'random' is that most people assume equal chance for any outcome. My understanding is for it to just follow a probability distribution, and then this brings up the problem of perspective. If we say coinflips are 50% and I win 80%, it's not random. However, if we correctly measure
my coinflips at 80%, then it is random. Then when we compare my flipping to the flipping of others, my result then becomes non-random again, since we are now applying the original assumed probabilities.
So we end up having situations where people are suggesting coinflips are random (meaning 'equal'), some people suggesting that they are not random because coinflips are not 'equal', and then a few other people arguing that coinflips are random, although in a completely different way to the first group. The first group are wrong, the second are technically wrong but right to argue against the first group, and the third group are technically right but not doing either of the first two groups any favours.
It actually brings up a big issue with people using incorrect definitions. Another one I reguarly come across is 'gambling', and the debate over whether participants are 'gambling'. They are, by the proper defintion, and most people are just arguing with a popular (but incorrect) definition, or just fighting the negative connotation.