Is Trading Just Guessing?

Discussion in 'Risk Management' started by macattack, Oct 7, 2011.

  1. Save it for the "teach me to trade" midnight loser audience . :D
     
    #161     May 12, 2012
  2. You're the loser. Even if you don't want to trust anyone, you still have to prepare backtests in order to be succesful.

    If day or swing trading is your goal, it's a necessity.

    Trusting professionals to buy good companies isn't a day or swing trading method, and there is no such thing as a long term trading system.

    It's day or swing, or buy and hold. If you want to trade at all only those that prepare backtests will ever be succesful.

    It's very asinine to think you have to plunge into live trading without creating a plan or without having trading experience of some kind prior to this. This is the primary reason traders lose. Backtests give you reliable knowledge of the impact your trading decisions have on your net worth, and if you don't care to find out if you could lose everything you must be planning to, because without a backtest there can be no expectation of long term success without knowing the expectancies of your trading decisions.

    I look at it as I want to make money doing the same thing over and over, and if I have a backtest the trades I make are for the same reasons, therefore replicable long term.
     
    #162     May 12, 2012
  3. Are you sure we are talking about the same thing here ie "set ups" enabling all that you are babbling about.
     
    #163     May 12, 2012
  4. 74Man

    74Man

    Trading is all about stop-loss and the risk you take. The price will either go up or down.
     
    #164     May 15, 2012
  5. There are many threads discussing "trading vs gambling" such as:
    http://www.elitetrader.com/vb/showthread.php?threadid=47844
    http://www.elitetrader.com/vb/showthread.php?threadid=150986
    http://www.elitetrader.com/vb/showthread.php?threadid=222261
    http://www.elitetrader.com/vb/showthread.php?threadid=212990
    http://www.elitetrader.com/vb/showthread.php?threadid=223945



    Besides, no one can deny the benefit of paper trading as you learn while trading using paper/fake money and whenever confident you can switch to real money. Also, doing part time trading is helpful as you will have two incomes from business and trading.

    Moreover, backtesting does help you in trading, see below:
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=104393
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=108534
     
    #165     May 22, 2012
  6. Gotta love these "questions".
    Yep it's a guess just like everything in life. No guarantees with anything.
    However, there is something called odds. Increase the odds of a positive outcome of a "guess" through education, practice, skill, talent.
    Simple.
     
    #166     Jul 12, 2012
  7. Spot on!
     
    #167     Jul 16, 2012
  8. +1
     
    #168     Jul 16, 2012
  9. Guessing: commonly refers to a conjecture or estimation. To "guess" is to make a prediction without sufficient information or knowledge.

    Hypothesis: a proposed explanation for a phenomenon. For a hypothesis to be a scientific hypothesis, the scientific method requires that one can test it.

    Gambling: wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.

    Trading: engaging in the buying and selling of equity securities, in the capacity of agent, hedger, arbitrageur, speculator, or investor.

    Speculating: buying, holding, and selling of securities to profit from fluctuations in price, as opposed to buying these instruments for use or for income via methods such as dividends or interest.

    Investing: putting money to use by the purchase of equity securities, offering potential profitable returns, as interest, income, or appreciation in value (capital gains). This buy-and-hold long term strategy is passive in nature, as opposed to speculation, which is typically active in nature.
     
    #169     Aug 1, 2012
  10. PaperWood

    PaperWood

    Either the price will go up or down. It will not be the same.

    Any newbie who is willing to risk money, can trade by guessing.
     
    #170     Aug 1, 2012