A favorably skewed distribution (i.e. larger wins than losses and/or greater number of wins than losses) can still be random...
When the odds are in favour of achieving your objective. Surely after 10 years and over 3000 posts that is obvious by now.
Nodoji, I know I'm not a mind ready.. I did say the outcome is random and anything can happen.. Maybe my mistake is I said 90%.. I should've said 70%.. Anyway, I've tweaked my rules a bit and hopefully, this will make me patient..
an "edge" is what the casino owner has I'm sure there are plenty of players sitting around the table that think they have an edge The casino owner doesn't seem to be too worried about them
mrnate22, Focus more on your risk-reward ratio of each trade setup, not the long-term winning pct aspect. That is something you can get a good feel for at a technical trading level. On a per trade basis, to make twice what you risk, you have to be right at least 40% of the time. THAT is doable. [But it's not doable to get twice what you risk more than 50% of the time in the long-term!] If you were right 70% of the time (as you said you feel), I don't even have to know your trading system to tell you that your avg winning trade amt will be LESS than your avg losing trading amt. [You see? RR ratio and winning pct are ALWAYS an inverse relationship in the long-term] Where you want to have an extremely high pct is in guessing the context of the market before you take the trade. If you cannot consistently judge if your market context is up, down or sideways AND the degree of its volatility / choppiness relative to your experience of what is "the norm", then you are 100% F'ed as a trader. The good traders on these boards don't stress this nearly enough.
Ok, then clearly, random entries can produce the same results. Therefore negating the purpose or function of technical analysis.
Thanks Steve for the advice.. Actually, 80% of my trades are losers because I'm impatient to wait for better setups.. that's the reason why I created this thread.. I cant control my emotions.. I'm probably greedy and want to be rich quick.. Technically, I'm good at trading.. i can spot good setups and be confident its gonna work.. I do 3 to 1 ratio.. But again my problem isn't technical but the mental side of trading..
Let's say for the sake of argument that 60% of the time price pattern A in the context of larger price pattern B produces a favorable price move of at least N without first producing an equal adverse move. So my risk:reward is equal, but on average 60% of these trades allow me to realize a profit before stopping me out for a loss. If I trade every occurrence of this pattern, over time I will have winning trades 60% of the time; however, the distribution of the winning trades is random, meaning that in a series of, say, 10 trades, I'm not necessarily going to have 6 winning trades. I may have 3 winning trades, or no winning trades whatsoever. Then in the next 10 consecutive trades, I may have 8 winning trades. The distribution is random, but the overall expectancy of winning trades is 60% when a larger sample size is analyzed (such as 100 trades).
Technically, you're not good at trading. You can technically read the market, but you're not trading based on your ability. You could be a music prodigy, able to memorize any piece of music after hearing it once, able to compose entire symphonies in your head, but unless you have a few fingers on your hands and you practice quite a bit, you'll never be a virtuoso pianist. What do you trade and what time frame? What is one high expectancy setup you trade? Can you describe it in a way that any of us could read the description and put on a trade the next time this setup appears?