Luck

Discussion in 'Trading' started by Commisso, Jan 22, 2002.

  1. Commisso

    Commisso Guest

    I pose this question to elite;

    On a MICRO level (trade to trade) is there any other determining factor other than luck involved in the outcome of a trade??????????????

    PEACE and good trading,
    Commisso
     
  2. LUCK (also known as probability) + DISCIPLINE = PROFITS

    Luck is a random variable on a trade by trade basis, but discipline assembles luck into a non-random distribution over the longer run... resulting in profits.
     
  3. oolarinm

    oolarinm


    On a micro level , i think it is luck. if you have a large enough sample then it should be biased luck hopefully in your favor
     
  4. Commisso

    Commisso Guest

    Very well said, BUT is luck really the same as probability???

    Lets suppose I take one of my set-ups and over the last 100trades, 60 of them were winners.... Does that necessarily mean that the next time I take the set-up, that particular trade has a 60% chance of going in my favor???

    PEACE and good trading,
    Commisso
     
  5. oolarinm

    oolarinm

    depends on how large the sample you used to test your set up initialy , and also the frequency at which your set up generates signals . ( you can use null test hypothesis or one of them to find what the appropriate sample should be. ) if you used the correct sample size to do your testing , your results in the future over the same sample size will be ~ the same all things being equal
     
  6. Commisso

    Commisso Guest

    oolarinm,
    I understand that the next 100 times I take the set-up, I have a 60/40 edge...
    But do I have an edge the very next time I take the set-up???

    PEACE and good trading,
    Commisso
     
  7. oolarinm

    oolarinm

    NO you don't IMO " The outcome of every SINGLE trade is random " - Mark Douglas
     
  8. m_c_a98

    m_c_a98

    I agree. the very next time you take the setup there are far too many unique variables to consider. Thats why you never know when your next trade will be that BIG trade. You have to take all your signals; this is easier said than done and is the reason for the mental aspect of trading being the single biggest factor in your trading unless you delegate that responsiblility to a machine or another individual.
    But with a hybrid of part mechanical setups, part discretionary trade management(or the other way around), just executing according to your plan is the whole battle.

    ..at least this is what I'm going through
     
  9. Rigel

    Rigel

    If you think your trades are based on luck you'd have to be a real moron to to risk your money.
     
  10. Commisso

    Commisso Guest

    Commisso <---- THE MONEY RISKING MORON :D

    PEACE and good luck to you,
    Commisso
     
    #10     Jan 22, 2002