A profitable journal with all entries/exits posted in advance

Discussion in 'Journals' started by 1a2b3cppp, Jul 31, 2012.

  1. Well, if I could predict direction I would just go long or short with my entire account in the correct direction.

    Since I cannot predict direction, I have to trade this way.
     
    #101     Nov 18, 2012
  2. Daring

    Daring

    What does predict mean to you ?

    100%?

    50%?

    25%?

    Once you answer that question risk vs reward comes into play, and then the real trading begins.

    What you are doing now is not trading.

    Is dollar cost averaging investing.
     
    #102     Nov 18, 2012
  3. I am familiar with win rates and R:R.

    In years of extensive testing I was unable to come up with any sort of prediction that was any better than 50/50, and I have not met anyone else who could, either. I have seen a lot of people who claim to, but either won't produce evidence, or fail to produce results in realtime.

    I'm not saying it can't be done. I'm saying I don't know how to do it.

    I also think 90% of people have no idea what they're talking about when they talk about R:R. In fact, most people calculate R:R after they close the trade, which is crazy.

    I never have any idea if price is going to up or down, and I certainly have no idea how far it's going to up or down.

    If you can say "price is currently at 100 and I think it's more likely to go to 110 than to 95," then you have a legit 1:2 risk:reward (10 gain vs 5 loss).

    The only other way to do it is to use equal target/loss distances, but enter the trade with a long position when you have reason to believe price is more likely to go up than down.

    I have never seen anything that ever suggests that price is "more likely" to do one thing rather than another thing. I've seen a bunch of crazy talk and rationalization after the fact, but never anything before hand that had any sort of predictive value at all.

    If you have something that allows you to predict market direction, by all means, use it.

    Because I cannot predict direction, this is how I trade.

    Call it what you want. I don't care. Trading is just investing on a shorter term. I mean I tend to think of "investing" as on a yearly or longer timeframe, but that's irrelevant. Most of my trades now are weeks to months in length.
     
    #103     Nov 19, 2012
  4. 11/19:

    SPY: -$282

    QLD: -$206
     
    #104     Nov 19, 2012
  5. 11/21:

    SPY: -$250

    QLD: -$150
     
    #105     Nov 21, 2012
  6. Daring

    Daring

    You begin by noticing what tends to be high probability areas of reaction. Then you continue by learning how price should act when an area is indeed going to react, when the reaction is not healthy, that's where you take a small loss.

    Then a good trail and off you go.

    The rest are technicalities. Certainty, never.
     
    #106     Nov 21, 2012
  7. 11/23:

    SPY: -$60

    QLD: $162
     
    #107     Nov 23, 2012
  8. 11/26:

    SPY -$90

    QLD: $268
     
    #108     Nov 26, 2012
  9. 11/28:

    SPY: -$49

    QLD: $370
     
    #109     Nov 28, 2012
  10. 11/30:

    SPY: $20

    QLD: $474

    Will probably sell the SPY on Monday.
     
    #110     Nov 30, 2012