The rat won because it accepted the fact that going left paid off better than trying to decide which way to go. All you have to do is look at at chart and see that a RAT REVERSAL preceded every major move.
I don't trade forex. I trade futures. So I deal with probabilities derived from statistics. So for example, my win ratio if I do everything correct is around 65%. Win ratio is statistics which is calculated from past trades based on an edge. Edge is in this instance being defined as a profitable outcome of a trade above 50%. So before I take a future trade on an ES future (a trade in current time before I know the outcome) assuming of course its a correct edge based setup that I recognized, then I have a probability of 65% that it will hit my target before it hits my stop. http://www.mathsisfun.com/definitions/probability.html
great quote. I will use this. However, IMO if you believe this quote, you should not trade as you probably do not know when you have have an edge.
This is my issue with the trade, and why I don't use it. A daily low in how I define it is the low that was put in during the day. You don't know this low until the day is over. I assume the next time period, you could use the previous day's low as the daily low. If one actually knows what is the absolute high or low for the day and is 100% sure it will not be breached, you could just trade off of that low or high.
Well, an edge is based on statistics. Statistics must be gathered from a high enough sample of trades in all market conditions to be relevant. Let's assume for sake of argument 100 trades gathered in the past over both bull and bear markets produces an edge based price action setup. Note this is a setup I use not discussed in this thread. Now let's assume 2 other profitable real money traders use this same or similar setup to trade. These are traders that I respect because they have been profitable over multiple years. Then I have a statistical argument to take the trade when I recognize the setup in real time.
1) price within 20 pips of the daily low - that is OPPORTUNITY 2) red candle closes 3) green candle closes - note the high price of the green candle. 4) enter long at the green candle's high price 5) STOP LOSS IS 10 PIPS so if it gets to 20 pips of low and fluctuates you can enter and reenter with loss after loss in a choppy market or in a trending market where there are new lows all day then each new low being another loss if the market doesn't reverse. Do you have any stats on this rumpled one or statements showing how you are fairing using this. Seems like guessing to me but maybe I'm missing something.
I am not arguing with the idea that trades should be based on experience - whether live trading or research, I just thought the idea of stats being superior to probability was odd. Probablility sugggests stats within a context of why it is happening. i will take context over stats alone anytime. lets say you find a trade that may go on for for months during a bull market... say you find out on average tech stocks go up on tuesday. I would like to know if they are going up on tuesday because fidelity select electronics puts new money to work on tuesdays. so I would then know unless something scary happens on a thursday or friday... there is a good chance by orders go in on mondays and I would anticipate the trade to continue to work. stats plus context equals probablility - imo given tro's quote.
IIRC you mention entry parameters without concise exits. That's not a system. You have like 400 "systems" running and I assume using what is currently working to define entries and leaving the exits to the discretion of the user.
You are correct Jem. This quote is correct. The conclusion is wrong. I mean the rumpled one's conclusion "There is no probability in trading, only statistics.". The Rumpledones conclusion is, of course, nonsense.