Registered: Feb 2002
08-18-10 08:40 PM
Quote from Gabfly1:
The other thing is that I am an atheist. As such, I'm not that big on leaps of faith. I consider fairly wide protective stops to be an article of faith, irrespective of the testing or reasoning that may or may not have gone into such stop placement. Therefore, I prefer small steps rather than leaps. However much we may wish to believe that it's a matter of probability, the fact is there is no probability distribution for future price action. There is only uncertainty and, at best, a balance of probability, which is a far less elegant measure of confidence. And so, I prefer an approach characterized by incrementalism.
Elegantly stated, although a wee bit specious. Regardless of time frame and philosophy, the true "articles of faith" are that (1) the chosen methodology works, (2) the trader has a sustainable edge, and (3) the light is worth the candle. All traders have "faith" in respect to these three things, even if the faith is only in ourselves.
(As for disputing probability distributions, that is a good way to start a long and most likely fruitless debate, with patterns of conceptual disconnect akin to the parable of blind men and elephant.)
There are many paths up the profit mountain, the three uniting factors being internal consistency, empirical validity, and practical longevity. Without those uniting factors in play, the width of the stop (or even a lack of stops entirely) matters not a whit...