A message to some day traders.

Discussion in 'Trading' started by Amahrix, Sep 20, 2019.

  1. Heydrrich

    Heydrrich

    Agreed; it's risk reward and probability (traders equation).

    Let say we have a triangle. Probability of it going up or down should be 50/50 or else it would in fact go up or down.

    Screenshot from 2019-09-27 11-51-29.png

    Now price breaks out of that range; i.e. buyers sellers agree that the price is not right. We get a breakout candle and a follow through candle. Is according to your theory the probability of higher prices still random, meaning 50/50 ?
    Screenshot from 2019-09-27 11-58-13.png
     
    #1041     Sep 27, 2019
  2. Amahrix

    Amahrix

    Yes, I know that.


    Right, using that definition, what I said doesn’t apply.

    I should clarify, I define gambler as a person who takes risks whilst risking risk of ruin. For example, a gambler who’s taking chances on a game with the edge against him, like roulette or slots etc. Because he is (guaranteed) ruin, he is risking this ruin in hopes to luckily profit.
     
    #1042     Sep 27, 2019
    padutrader likes this.
  3. Amahrix

    Amahrix

    Very good question.

    You're asking me to predict the odds of higher prices following a breakout candle and a follow through candle.

    Before giving you your answer I have to explain something crucial.

    Contrary to popular belief, financial returns have infinite variance.

    For example, when a movie studio predicts the profits a movie will make before it’s released, the error is practically infinite.

    A prediction that has infinite margin of error, is no prediction at all.

    The answer is the odds are incomputable.

    With this being said, it is irrelevant if the next move is going to be "50/50" (assuming you can even attach odds to such a thing)... the decision should not be based on getting the next move right. It's the payoff function that you must make your decision based off of.

    I explain more in the following thread: The Fallacy of Forecasting. https://www.elitetrader.com/et/threads/the-fallacy-of-forecasting.336260/

    You see what I'm saying?

    --------

    References/empirical evidence for my claim that financial returns have infinite variance: Bitcoin, 1918 Deutchemark Chart, XIV crash, etc... Check out the legend Benoit Mandelbrots work on this, and Nassim Talebs, among many others.

    "Mandelbrot saw financial markets as an example of "wild randomness", characterized by concentration and long range dependence. He developed several original approaches for modelling financial fluctuations.[17] In his early work, he found that the price changes in financial markets did not follow a Gaussian distribution, but rather Lévystable distributions having infinite variance."

    The paper: https://web.williams.edu/Mathematic...elbroit_VariationCertainSpeculativePrices.pdf
     
    Last edited: Sep 27, 2019
    #1043     Sep 27, 2019
    Aged Learner and Heydrrich like this.
  4. wrbtrader

    wrbtrader

    You know what happens to people that does such on social media while using their real names ?

    Their bosses, those that pays them an income or those that gives them a title...gets complaints about their social media postings. It then results in the person being discipline, fired or forced to take a leave of absence without pay. That's why those that behave like that will use an anonymous user name.

    I'm sure you watch TV or read social media websites to know the above commonly happens.

    Therefore, they must change their public (social media) image if they wish to continue using their real names via stopping the name calling, personal attacks, tongue in cheek commentary and so on OR they can continue being rude, distasteful with the intellectual persona via an anonymous user name. Many choose the latter (anonymous user name).

    Something else to remember, the forum owner allows these types of threads. I get it because they really are harmless and a waste of time to some while useful to others in that they become newly aware of Nassim Taleb, Steven Pinker and many other names mentioned in this thread. That's a good thing.

    In contrast, other forum owners would not have allowed these types of threads to proceed further beyond 3 - 10 pages. That's why its best to start these types of threads at ET and not somewhere else like Futures.io and a few others.

    You should also stop asking him to prove his trading. Instead, ask him to use his real name...you'll then understand all of the above what I stated about the consequences of this type of behaviour while using your real name. He will decline to use his real name. :D

    Regardless, at some point the debate, arguments, attacks begin to take the shape of a mental disorder. You then need to make a decision to continue debating within that new shape or use this forum for what it is...

    To try to make money / improve your trading. Like I've stated a few times in this thread, the forum has seen these types of threads before many times in the past. It may be one of the reasons why its currently tolerated.

    padutrader
    , seriously, don't be offended by this thread nor the author of this thread. Take a deep breadth, don't take it personally via letting you become like the author with the name calling and tongue in cheek like commentary because someone disagrees with him.

    Those that lose their emotional cool by threads like this says a lot about the person as a trader. Simply, no proof / verification needed.

    Take care and have a good day in trading. My last comments in this thread.

    wrbtrader
     
    Last edited: Sep 27, 2019
    #1044     Sep 27, 2019
  5. volpri

    volpri

    so what is market activity? Please define.
     
    #1045     Sep 27, 2019
  6. tiddlywinks

    tiddlywinks

    Posts in the last page alone mention Gauss, Mandelbrot, and Levy.
    Seems to me this is not name calling, but rather name-dropping... to back up beliefs.


    The more I take action, the more I learn, the more experience I gain, the luckier I get!
     
    #1046     Sep 27, 2019
  7. speedo

    speedo

    Any consolidation pattern is more likely to break in the direction of the prior directional move thus not 50/50.
     
    #1047     Sep 27, 2019
    imjohn likes this.
  8. tiddlywinks

    tiddlywinks


    To get to a NOT 50/50 probability, "consolidation pattern", "break", and "prior directional" must be universally defined and recognized with 100% certainty. I will add, NOT 50/50 encapsulates EITHER a positive -OR- negative probability.
     
    #1048     Sep 27, 2019
    padutrader likes this.
  9. imjohn

    imjohn

    OP probably back in due time to shoot this down as pseudoscience. Round and round we go.
     
    #1049     Sep 27, 2019
  10. speedo

    speedo

    :D
     
    #1050     Sep 27, 2019