...First and foremost, it is my goal to preserve a stance of extreme flexibility at all times. What this means is that ANY forecast -- no matter how strong -- is merely one possible scenario among a wide range of scenarios.
In practice this means that, if someone asks "What do you think is going to happen," my response will be along the lines of gaming the highest probability scenario. There is no scenario that is "my" scenario, strictly speaking, because the market script can change quickly and dramatically, and I am happy to change along with it. Even an 80% likelihood misses the mark one time out of five.
Then too, there is the striking importance of fat tail risk (and fat tail reward). Fortunes are often won -- and lost -- on the occurrence of the broadly unexpected...
Hmm. Seems to me an argument can be made that you could survive, and possibly thrive, on a diet of price alone. I'm reminded of the story about the guy who explained to his friend the division of labor between him and his wife regarding household responsibilities: he worried about the economy and politics, while she cooked, cleaned, washed, ironed and managed the bils.
Hmm. Seems to me an argument can be made that you could survive, and possibly thrive, on a diet of price alone. I'm reminded of the story about the guy who explained to his friend the division of labor between him and his wife regarding household responsibilities: he worried about the economy and politics, while she cooked, cleaned, washed, ironed and managed the bils.
The highest echelons of discretionary trading are all about selective aggression, which is a function of relative conviction level and opportunity awareness, which in turn are functions of something more than price.
You can't position size off of price, and you can't use price alone to identify, isolate and target tremendous opportunities in which the reward to risk profile far surpasses that of the standard trade. It is not just knowing when to bet, it is knowing when to bet big, and price in and of itself does not speak to this.
The highest echelons of discretionary trading are all about selective aggression, which is a function of relative conviction level and opportunity awareness, which in turn are functions of something more than price.
You can't position size off of price, and you can't use price alone to identify, isolate and target tremendous opportunities in which the reward to risk profile far surpasses that of the standard trade. It is not just knowing when to bet, it is knowing when to bet big, and price in and of itself does not speak to this.
Though yes, an argument can certainly be made
I agree that your point is sound in theory. And it is hard to argue with the success of those who employ such an approach. However, the point is that if your thesis is supported by price, then you will move forward with your thesis. And if your thesis is not supported by price, then you will seek an alternate thesis supported by price. The question arises, at the end of the day, who is pulling whom by the nose? Especially against the backdrop observed by Keynes that "Markets can remain irrational longer than you can remain solvent."
(Hey, it's Sunday and I'm bored. I'm just making conversation.)
The question arises, at the end of the day, who is pulling whom by the nose? Especially against the backdrop observed by Keynes that "Markets can remain irrational longer than you can remain solvent."
(Hey, it's Sunday and I'm bored. I'm just making conversation.)
Well, we aren't in disagreement as to the critical importance of price.
My stance is that price confirmation is a necessary, but not sufficient, condition for action. It is less about one factor "leading" and more about a confluence of factors coming together -- like the components of an engine.
