the answer is there in black and white, capturing it takes a lot of wrong guesses to narrow down the odds of a right one,as it gets easier,you can time shorter channels and shorter trades,the market is predictable, the timing ,bad timing,is where you give it back
bear flag,this is a very high percentage short,with a well placed stop,this could make your year,just a guess
monday will be day 10 of this rally,10 day rule,long or short,when you advise your client to get into a stock,and you get in with him,you have to hold it for a minimum of ten days,unwritten rule to erase the temptation of telling all your clients to buy a stock and get in with him,then sellling it 1/2 point or more higher on the influx of buying you instigated
I don't understand why people don't acknowledge that guessing is a winning strategy. Obviously overnight gaps and many other well used strategies will earn better, but when all else fails, GUESS with tight stops and let the correct guesses run more ticks than the stops. With a slope of less than 1 (which everything is), how can one not lose?
I haven't read the entire thread, so perhaps someone has already said something along these lines, but if you are going to put a hypothesis out there that trading is just guessing, don't you have to also put down the conditions under which that hypothesis would be disproven, at least probabilistically? So long as someone, somewhere profits from trading, that is potential disproof of the hypothesis, no? Not definitive, but potential. So, if that is truly a requirement, what conditions would you suggest someone needs to meet in order for their trading to have evolved beyond "just guessing"?
Anything can happen when you place a trade; it could go up or down; there could be an earthquake & the exchange could close. Therefore placing a trade is based on a guess; there is no other alternative. But if I had to choose the guesser I'll take the one with years of experience who has really thought things out & who has a proven track record. "Guess" is just a word though; could call it a gamble, a decision, etc. What I was initially after when I started the thread was the difference between taking a trade based on a well-defined setup versus taking a trade based on nothing but a well thought-out decision to enter (no pre-defined setup). Pre-defined setup: price makes a double bottom & takes out the swing high: Enter. Logical setup not pre-defined: price has been choppy all day, it's mid-day on a Friday, volume is low, after moving down all day price has given no indication it's going to rise. The same double-bottom appears as in the above example, but I make a guess or a decision that it's nothing but a bull trap. Instead of going long I go short on the breakout, put in a stop knowing full well I may lose & what happens happens. On the first trade you may know the winning %, the best stop distance, a target, etc. On the 2nd trade it would be hard to have a history on it, so you wouldn't really know the probabilities.
Well, at this point in my evolution as a trader, I wouldn't trade any non-pre-defined setup. In fact, I only trade one set-up, period, and the rationale for doing so is that I have a pretty precise understanding of all the relevant variables involved such that I can be fairly certain that the odds are in my favor over time, although on any one specific trade I cannot begin to say what the final outcome will be, so in some sense it is a "guess" made at that particular time.
The answer is in the timeframes. The second trade, could be a higher time trade, so entering would be ok, it just needs longer to move, of course. Its all in relation. The markets dont do anything irrational. The markets always have a plan. Always.