Is yesterday’s 1 day Apple chart randomly constructed or does it have a precise intended message of the future? I’ll wait, charlatan. To help you with your answer: As NNT would say “In practice, randomness is incomplete information” so tell me chief...
Taleb himself made his fortune betting on a pattern of crowd behavior that is well known in academia, this is taught at Stanford for example. It goes something like this: Markets are very predictable. All excesses regress to the mean, but before the regress to the mean it reverts to the other excess. That pendulum swings back and forth. The excess is driven by accounting as it always is. Taleb's concepts of asymmetrical risk to reward, anti fragility, convexity, and dry powder (cash reserves) to clean up on fat tail events is just good risk/trade mgmt 101, I think you have to evolve to this as a trader at some point - otherwise you will go extinct. Patterns from price action on charts, calendar or clock driven influences, interest rates, earnings reports, etc. are somewhat repetitive but far from certain. Without having an overlay of strong risk/trade mgmt & the right psychology than there is no edge. Entry signals alone have very little if anything to do with being profitable. And no doubt luck surely plays a role, no matter how much work you put in.
Is yesterday’s 1 day Apple chart randomly constructed or does it have a precise intended message of the future? Can you look at it, grab all the info, and predict accurately? That’s my question, please answer this question. Hint: Randomness is incomplete information. Logic: Looking at Apples 1 day chart is more random than Apples 1 year chart which is more random than Apples 5 year chart etc. Edit: You know very well those that look at even shorter time frames and try to find signals are only deceiving themselves because there is too much randomness in the data. That’s my argument in this thread. Whether market is predictable or not is irrelevant. They aren’t predictable where it counts... the tails. What’s the point of being a good predictor of the market most of the time then getting hit with a tail event (which is unpredictable). This is another discussion.
Taleb made his personal fortune by buying and holding cheap options and he knew people underestimated tail risk hence the price of the cheap option. His strategy was about price and price alone. He survived against bleeding long enough to profit from human mistake. His profits are unpredictable and inconsistent but when they occur they’re huge. He exposes himself to collect serendipitous black swans (he benefits from black swan events). In the meantime, he incorporates other strategies that generate some income to keep funding the buying of options.
I did not trade AAPL - I traded the NQ on Fri which is hugely driven by AAPL. The NQ had an excellent short setup from a bear flag.
Do you have any investments (buy & hold) or a plan at your job that does investments for you like a thrift plan or whatever it is that they call it these days ? Specifically, have you owned stocks longer than 5 years ? I myself am also an investor...some stocks were given to me as a gift from relatives in my late teens and early 20's...others I've invested on my own. I still own most of my stocks that I purchase when they were an IPO (e.g. CME Group - CME). In addition, good dividend yielding investments in stocks in France. Its part of my investment portfolio (retirement fund). Obviously no chart analysis...just a lot of fundamentals from those with jobs working at the companies or working for a firm doing business with the companies. I'm a daytrader too but more worried about my investments (retirement portfolio)...the latter connected also with my children's future. Lastly, a little luck is needed in daytrading or investing...I have no problem in embracing it when it occurs. Its all part of the equation called diversification. wrbtrader
O.k, if I was day trading APPL this is how I would have tried to play it. Obviously I have the benefit of hindsight here - but this is a common setup, I have put on thousands of trades like this one over the years. Most of my profits are made from swing trading. * Daily chart- price had reversed at resistance from the prior high and hit a trend line. I would bee looking for any bearish patterns on the smaller time frame. *A gap fill had just completed which formed what appeared to be a head & shoulders top which is on the right side of a bear flag, confirmed with volume. My aim would be to enter an initial position at the same price level as the left shoulder, than add on more size on a break of 1st & 2nd trend line breaks and exit at the close. * Here is a pattern that would have worked - I always assume about half of them wont work out. Trading from patterns allows me to take smaller defined risks to make significantly larger gains. * Call it hocus pocus, I don't care. Many of these patterns trigger large parabolic breakouts. Patterns that are calendar, Fed, earnings, etc. driven I factor in as well. It gives me confidence to plant my positions and allows me to have asymmetrical reward to risk.