Absolutely agree. First step to eliminating "wrong" beliefs is exposing them to consciousness and recognizing them as "wrong" (or rather destructive). P. S. Great pleasure for me to read your newsletter and discuss trading with another psychologist.
Randomness takes it's place of course. But science devoted serious attention to randomness and those studies provide us with the guidelines to distinguish random results with enough precision. Yes, I am speaking of CLT here. Certainly a few successful trades can be random (and that's how many finance "superstars" made their names I guess). But consistent positive result of long series of trades is very unlikely random. That's mathematics, Surf, not the matter of belief.
You are also limiting your upside dramatically by turning trading into a "job"--- if you are telling the truth.
What biases for a man of science. Your data set is way too small to reach your conclusion whereas when your premise is tested over wider data it fails again and again (TA-- chart reading). You know this, but the lure of the market and need gor order is just too much of a attraction to admit.
Not at all. Even sample size of ~50 is considered valid in terms of CLT. Try 50 random trades in effort to get "stellar" bottom-line performance and you'll see what I mean. I showed you 50 consecutive trades last Autumn. Now imagine a sample size of hundreds or even thousands of trades (not unusual for a day-trader or scalper)... any mathematician will tell you Surf, that chances of result being random are negligibly small.
Probably so. But assuming RR trades SPY (or it's twin ES), hardly anything stops him from trading heavy size and producing profit at least deserving respect by any standards.
I disagree completely. The self selection bias starts with the fact of posting here. Generally, without some modicum if success,one wouldn't be posting about trading. If you flip a coin 10 times and get heads 10 times in a row are you in a heads trend? Can you tell by this what the next flip will be? What would CLT say about the results? surf
This is incorrect analogy. When I say "consistent trading" I don't mean "X winners in a row". I mean X winners randomly mixed with X losers, but the end result of the sample is significant profit. 10 heads in a row may sure be luck. Now ask yourself, if you flip a coin 100 times in a row and get 70% heads and 30% tails, would you still consider such case a random event? P. S. I love the well-known Taleb's story on this matter of coin.
FYI non user of TA Do you se any historical coins on this chart? You see bars annotated. The snagit shows the count down seconds in the bar. On price you see the reversals. The End Effect of the trend is annotated on volume the leading indicator of price. RR explained to you the topics: Work. Results over 10 years. I'm putting up so you can shut up. The "know you know" of TA at all times are those funny little things (annotations from coded "science") that go on bar-by-bar. You have a lot of "wrongs" you need to "evaporate".