I found the Holy Grail

Discussion in 'Trading' started by oddiduro, Oct 30, 2003.

  1. It is that the markets are random. Random defined as a trade having a probability of success of 33%.

    That means that any method you use will work, IF YOU USE IT CONSISTENTLY, DAY IN AND DAY OUT.

    I tested the indicators in the TradeStation platform and turned them into strategies. What I found was that any indicator or price level method will work to make money, if you are on the right time frame( thanks Jack) , and if your stops allow enough room to let the trade develop. If your stops are too tight, commissions will destroy the method, no matter what that method is.( This is, of course, assuming that everyone here knows what a change in trend is, and not to hold a long position in a falling market)

    Criticism of this statement is strongly encouraged.

  2. Fohat


    33% chance of success is not a holy grail, imho.
  3. TD80


    I don't really agree, however, if it works for you then go for it. Markets are simply not random. The deal is simple. You see, some people have more information than others, and those people are greedy or fearful. It is human nature, look at why futures are so accurate in predicting the "future". They get in early on their own greed or fear, and when the herd finally catches on, it's almost over. Do you think the market runs up into a positive earnings release or macro-event on pure randomness?

    You may find many instances where things appear to be random, and that is because there is no real speculative interest in play. Ok, great, run a money management strategy and go for the gold. However, there are real instances of bias or persistency where someone (or in most cases the collective market) bigger than you or I wants alot of stock. My job as a trader is to figure it out early in the going and ride the wave. This can be done as low as the scalping time frame, and as high as the long-term investment timeframe.

    I've found alot of quants and gear-heads throw in the towel at some point and declare this minxy market random, but they are basing those conclusions on an inherently inflexible system of analysis.

    Goodluck and I hope it works out,
  4. Agree 100% .
  5. Okay, but the fact remains that each trade you make has a probability of 33.3%. You don't know FOR SURE that the market is going to go up or down when you place your trade. You are still trading a set-up of some kind.

    Not trying to argue, just trying to understand.

    And you are right about gearheads, I am one. Discretion never worked for me.
  6. Of course not. The idea that I am putting out is that money management works better than discretion over the long term. If there were a holy grail, I would have been found long ago, and the market would adapt to it.

    What do you think?
  7. If I understand you correctly, this means that your winners have to be at least 3 times larger than your losers not?

    Add commissions and slippage.

    Sounds to me if you are correct (and it could well be imo, because markets do trend some of the time), you won't have a high roi.

    But that's ok if you don't need much money i suppose.
  8. buster


    no you didn't
  9. Holy Grail, aka Holy Grill will never be found by quants or gearheads. Only person with rare combination of superior, artistic like imagination and solid knowledge of a market can find it .
    It is out there, you all, keep searching....
  10. No, 2.0 win to loss is enough to generate a positive income. Including slippage and commish.
    #10     Oct 30, 2003