Has anybody ever defined their risk through 'time in the trade"

Discussion in 'Psychology' started by ElectricSavant, Nov 26, 2006.

  1. Can I spreadsheet this?

    Do you consider time out of the market elimination of risk?...or deprivation of profits...thus risking your idle capital to depreciation and a lackluster yield curve?...

    Do you consider the time "In the market" to be exposure to risk?

    To spreadsheet this, could make what you think to be your most profitable trades...pale in comparison to your quickies...


    Thought anybody?

    ElecticSavant™
     
  2. What are your reflections on the Ol' Axiom...

    "You gotta' be in to win"
     
  3. having your money in a market that is having price change is the only way to make money that I know of. (i don't do options).

    Therefore I would only be sitting out if I thought there would be no price change in a market.

    I think 8 days is more than enough time to capture a 20% price move. I would rather not be in a particular stock longer than that if it is not achieving a high rate of return.

    you can always get money back, but all we do is burn up time. Thus time is always more valuable than money.

    most people have an incorrect perception of risk, among other things.
     
  4. Not exactly, but I have started paying more attention to it since follow the simple profitable method thread. The time component that is. For instance I am tracking by hand, the majority of my winning trades occur in the stock indexes in 2-3, 5 minute candles and 3-4, 5 minute candles in currency futures. If it goes past 3-4 and I see a big market event coming up I will look to tighten stop to the next most logical place, ie the high or low of a doji etc. It seems to be working, but I need more data.
     
  5. I have found great success by using time-out stops rather than traditional stop losses for some strategies.

    The downside risk is open ended, and in some situations I still step in and override the system to throw in the towel, but rarely. A lot of good systems just need time to work. By introducing time in trade to your stats, it helps boil it down to more pure odds, which is the way I prefer to think about trading. Also easier to backtest.
     
  6. There are only a couple of more pertinent issues than time in the market.

    Recently I saw a thread labelled 10 rules for trading or something.

    I wrote out many pages of stuff to grasp the underlying thought of the question and after five hours of work, decided to not reply.

    To make money, you have to be in the market and being on the sidelines or the consideration of sidelines is a message to you.

    The topic of risk is a strange one. Risk is defined according to the person more than the market in the final analysis.

    It is very hard for a person to sit for a moment and clean the slate to be able to consider important things.

    One of the greatest impediments to making money is the unwillingness of people to make money caused by how they close the door on opportunity.

    As they focus more and more on eliminating opportunity, they are, in effect, putting capital at directly at risk by paying this deep and severe opportunity cost.

    The average long term daily profits of ES traders is a classic and seminal statement of how expensive it is to leave money on the table by imposing the opportunity cost that is represented by imposing major sideline restrictions.

    I do know that this 1 point per day in ES as a long term average is a net derived from a near balance of losses and gains. I know that not sidelining for all these potential losses that contribute to this low net (there are only three lower positive possibilities just to show how poor it is) is part of the picture.

    So sideling to make more more (eliminate loss periods, methodically and thoughtfully) may at first appear to be a risk minimization strategy. It isn't.

    What considering these time periods of loss represents is a message about only one thing.

    It is the same message as being just plain sidelined for any set of periods.

    Sidelining is a statement about one subject and one subject only.

    Think of it as what would happen if 5pillars used other than horizontal the horizontal lines he uses. Or X used other than Y to do something.

    Sidelining or sidelining when losses are building is a trading status that means capital is at risk because it is not making money when an opportunity is present to make money.

    It is the same as not earning money on your margin when you are on margin. Think using T Bills as margin or not using T Bills as margin.

    I will give a picture of this. But note that I am in the market when it is open (Call it "All In" from poker as I am waiting for the chips to be slid over to me inevitably) as background for my contribution here.

    Price movement is always on the right side of the market. There is a pot and it is forming for ........me. I am not not using my capital during market hours.

    For a chart I need to have only one item annotated to know that the price is on the rightside of the market. Go to Don Bright's help sheet for trading plan and see how he insists that it be included in the trading plan. This is not a descretionary item for any one on any level at any time in their trading life.

    So 100% of the time a trader knows that price is on the right side of the market. Stupidly by convention, names of things on the market are not done as in the medical field as far as right and left are concerned. So far right means correct. that is clear.

    There is no danger zone in markets where the price relative to the right side of the market can ever be questioned. This is a zero risk condition at all times. If risk is present for a person it is because he made the choice to put it in the picture.

    Look at past, present and future. Price is always known to have been on the right side of the market in the past. We do not trade in the past so that is not a calculation for risk. Risk is only a PRESENT consideration.

    Price does not jump from the past into the present and change sides from the right side to the wrong side.

    Traders often do wake up and discover that they are on the wrong side of the market and they are on the opposite side of where the price is now in the present.

    5pillars finds he has to take a loss to continue he tells us. Well he got there on the wrong side by, probably, watching the market.

    Wipe the future off the slate since we do not trade there at all. I do admit I take care of the future and i do not miss doing the care taking.

    The PRESENT is where we must always have zero risk and zero risk comes from observing that the price is always on the right side of the market.

    Someone from NJ who past stopwatch tests in "61 for typing says he does long post becaue he types fast. I did the TM for the Selectric of IBM and I never learned to type because IBM said I had to dictate on thier belt dictating machines. Dragon 9 hello.

    since there are no gaps in whether price is on the right side of the market, are their redundancies? YES there are. They occur only under one condition. That condition is during turning points. At this time, price is on the right side of the market and it may be measured twice to show this.

    The test of this stuff can be rather sophisitcated. And I think finite set theory and sufficiency prove the point.

    Marketsurfer is struggling with these matters, as he tells us and for him , in his world, nothing can be proven to him at this point. That is true for a lot of people and with regard to a lot of things.

    There is one thing for sure: price is always on the right side of the market and as you prove it to yourself it cuts through everything else almost.

    Your mind will create the finite sets to compare. Doing one drill will buid the finite sets. Do the proof backwards because it is easiest to get your mind in shape which is a bi-product of making a lot of money.

    Move the forming bar over a little from the right side. Hit the right side of the chart with a prevailing trend line (use three concurrently on different fractals just to build your mind faster. To draw the trendlines correctly always keep the price to the left of the trendline or consider that you screwed it up somehow. When two trendlines are overlapping, then the price will be to the left of both of them. If one trendline has ended its projection, you will know this because the other trendline is the one that is making the pot accumulate more money at that time.

    You never have to sideline or do 5pillar kinds of adjustments, if you have determined that price is to the left of the trend line.

    This means that capital is in the market and making money. Price comes to a point where it stops making money (we are on a chart that is a very fast fractal as we look (tick pairs are showing). The DOM is showing that the wall has arrived at BBid/BAsked). The pot is pulled to your place at the table and the Cards (trendline) is taken off the table for the next hand.

    All of this shoots the conventional orthodox financial foundation in the tail. Which is how it is. An era is coming to an end. The future is only needed for a place to annotate. No other things go on over there. As it comes into the present, the correct annotations are activated.

    The market is not correcting imbalances. Rather it is doing the main event continually and the huge huge pool of capital is siting there for extraction by using optimizing strategies rather than probaility strategies.

    Optimizing making money has everything to do with keeping In the markets and ALWAYS, in the present, being on the right side of the market.

    So sidelining is never a choice when you look at making money.

    You BE on the right side at all times.

    You collect segments of capital as the market changes from one sentiment (condition) to another.

    Entry from sidelines does not come up as a choice. Neither does Exit to the sidelines. Market actions are taken to just stay on the right side of the market all during the open hours of the market.

    Markets have noise. That is to be expected. Chaos and random walk is the consideration of noise. They are both gleening functions of the main event which is making money through change of price. Noise is what gives multiple chances for exacting the optimum from the market main event over time. It is very handy to have around to marginally improve the main event.

    The above shows a little about how optimizing pool extraction is driven by peole who go to and come off of the sidelines.

    The math representations of this stuff get to be quite cute sometimes.
     
  7. If you are trading a system intraday on NQ with optimized profit targets, stops and exit times, my studies suggest that risk goes as the square root of the ratio of the time from entry beyond the optimum exit time to the optimum exit time. Not a very Jackean approach, but it IS a fucking clear answer, right or wrong.
     
  8. I just wanted to mark this for later review...Thank you.

    Move the forming bar over a little from the right side. Hit the right side of the chart with a prevailing trend line (use three concurrently on different fractals just to build your mind faster. To draw the trendlines correctly always keep the price to the left of the trendline or consider that you screwed it up somehow. When two trendlines are overlapping, then the price will be to the left of both of them. If one trendline has ended its projection, you will know this because the other trendline is the one that is making the pot accumulate more money at that time.