I don't understand people who say predicting is a losers game when taking a position in the markets is in fact tantamount to making a prediction. Whether your time horizon is one minute or ten years does not matter, you would not be going long or short if you didn't have a prediction of market direction. I understand that some people may trade volatility, but its still a prediction. In one sense people are correct, predicting is a losers game since most people lose in trading. But lets face it, most of us spend our lives trying to make a crystal ball, in the statistical sense.
I understand your point that any system is actually predicting the market,in a strict sense you are correct. When system traders talk about prediction they mean you do not wait for the market to move in the direction of the position. They would not consider a breakout system prediction. A limit order trading system is trying to predict turning points. You might consider a breakout system prediction because we are predicting if the market will continue to move in the same direction, but this is different than predicting the direction.
Not to ruin you way of doing things. Predicting is something traders and investors do when they have not mastered there trade! As a new trader you are looking at charts and reading the tape. Do you really understand what is going on in the market from a order flow stand point? Most donât! Same as in investing, it comes down to understanding the real fundamentals as the market reacts to them. That includes bull and bear markets in any area of investing. In my own experiences I have seen many systems and I deal with a lot of investors. Most are amateurs! I worked for worldco for about 3 years and have seen a few traders net 10k a day, day trading small size, and going 2 or more years without a loosing day. They are still making consistent money! On the other hand I have seen some good traders doing a few 100k on a good day, and blow out, around 2001. I am current working in the real estate market and see all of these small time investors and even some large institutions make some very dumb and costly moves. I myself have taken 15 years to learn how not to loose money and always make a killing. Getting my A$$ kicked for many years and having to give up predicting has put me into a 6 figure income (soon to be 7 figs). As Gordan Geko put it, I ONLY BET ON SURE THINGS. Stocks, bonds, futures, options, real estate, it's all the same. You learn one you know them all. Just takes time!
When you bet on "sure" things, what are you doing if not predicting? It's only when you are completely convinced of something that you become most vulnerable.
you bet on sure things.... cool so your win rate must be 100%.. congrats!! otherwise if it ain't... guess what you are doing??? that's right.... PREDICTING. lesson over
Bricks, most wont get what you are saying. predicting is one thing. reading and knowing is something else. another ET'er tried explaining this with details and he was horribly bashed. since that time, i have followed what he taught and I no longer predict.
Im real estate I only buy when I know what a property can appraise at! And deal only in below market properties. Death, divorce and disaster. If the same house is selling across the street for 500k and I can buy another one that is almost the same for 250k. I have no risk of a loss, even if the market blows up. I won't buy anything that I can't justify it my current cost against the going rate! Same as in stocks. Except there there are too many outside influences. They change things too fast and it's very hard to keep up unless you are a long term investor. I wouldn't buy or short a stock unless I had a damn good idea where the order flow was or knew the company out look! An example is a trader I know who only deals in crude. He made his money in the 70's and in 99 he told me the value of oil was too low. He said a $100 a barrel in 99. All fundamental and he is making a killing! The whole point to my post was to separate predicting from investing/trading. You need to know what is really going on and not trade some gut feeling or a magical system that trade station back testing has proven! Reading the tape means nothing unless you know why the tape says what it says. Thats why most are strugling!
I try once in a while! I had a lot of the old folk on the nyse tell me stuff I didn't get and I argued. Now I understand what they wanted me to know. A few might get it and most will go broke!