LOL, I think the analogy is kinda crappy at best, besides 'continue to wear my raincoat ' is rather misleading as it relates to trading ."procede to put on my raincoat" is more pertinent from my perspective. If the analogy is so apt, maybe you should consider the follow up questions. How long does it have to be raining, before you put on your raincoat, how many inches? At what relative humidity has it STOPPED raining?, for how long?
People read the the same book, or see the same data, but draw different conclusions (sometimes opposite). From makosgu's analogy I draw the conclusion that if you rely on the present conditions to continue you'll have a higher probability of success. If you add this to good money management, you'll make money. This is not about guessing when to put on your raincoat or when to take it off. It is about keeping it on as long as it's raining. When the rain stops you take it off. You'll get wet by the next rain drops, and only then you'll put it back on ... To be a successful trader you have to forget about being right and concentrate on (statistically) making money. Check this link: 38-STEPS TO POSSIBLY BECOMING A SUCCESSFUL COMMODITY TRADER
By the way, in trading you have 3 possibilities: long, short, or stay out. With the raincoat: you can wear it, not wear it, or stay in.
-------------------------------------------------------------------------------- Quote from hans37: Evidently you skipped, where I answered that very question. I don't make efforts to determine the infinite number of trends available. The "trend" most people speak of is only knowable after the fact. hans37 Registered: Apr 2005 Posts: 114 11-15-05 05:55 PM If I'm "In" (aka profitable ) it's a trend, otherwise why should I care? -------------------------------------------------------------------------------- I feel sorry for you mak, do you do mental gymnastics so that you can look like a buffoon or does it just come naturally to you, oh well ,get well soon! The following is for those mak may have confused, with his drivel. I guess I should have stated. "If I'm "In" (aka profitable 97% of the time in open positions ) it's a trend, otherwise why should I care?" I don't hold onto losing open positions and by the time I check on a position it is either open with a profit (and subject to change )or closed out. btw (get over it mak)
Hmm you don't seem to get my point. If one is to profit from present conditions continuing one has to: 1) take action in opening a position consistent with the trend or 2) already be in, and in the right direction which presupposes #1 sometime in the past. truthfully is it more complicated than that? observation alone gets you NOTHING
Continuation and change are the two constituants for making money effectively and efficiently. Observation is the common activity (process over time) of how a successful trader deliniates these two mutually exclusive market activities. Both continuation and change are determined by a relative measure. Fortunately, it cannot be more complicated than that. You posted, above, a portion of the considerations required for sucessfully making money at a high velocity. It may be that you feel your comment above is sort of the point you are trying to make that others, of course, as you say, are missing. Often points are missed by others as a consequence of an unarticulated comment to them. I would not want to make that mistake in commenting to you. I divide making money into two categories out of necessity. fortunately they work together quite nicely as determined by the observational necessities. Handling big money in excellent universes requires less observation than handling smaller money in highly leveraged paradigms. Observation is but one part of the money making process. And observation has a counterpart of annotation; annotation in the near future primarily. The other three parts of trading in addition to this pair involve three independent thought processes. So a routine is in effect and it goes on only in the present and where several sequential tasks are repeated. Traders make efforts to be efficient and effective. Your 1. and 2. occur for them once or twice a day and from that point onward the moment of establishing a position is simply an historical event. From that point on, they periodically extract profits and bank them time after time. Essentially, they are in the market all the time. Thus their routine activities involve continually front running the market using a four part sequence over and over. For the slower unleveraged larger streams of capital, crossover trading is the modus that is just like using a stair climber for excercise while wearing the manditory rain coat. For highly leveraged fastest money velocity trading, a neutral biased approach prevails and the extraction is as described. An annotated future moves to the present and total specific focused attention is given the continuation or change, whichever is at the fore for the moment. The analysis step of the four part sequence is where the raincoat meets the drops (or as more conventionally spoken: "where the rubber meets the road"). As you tell us you are currently unaware of these things. Continuation you speak of and you do not ever address change. It may be that you are at a point in life and trading where you enter and exit the markets. Maybe you still are a person who does better in the am than the pm. It could be that the percentage of time you are on the sidelines out weighs the time you are in the market trying to make money. It may be that you still deal with drawdowns by not being on the crrect side of the market. It could be that occassionally you leave money on the table for an assortment of prioities that you maintain. It is a requirement of high money velocity trading to do "trend analysis". This name, "trend analysis", you haven't met as yet and reading this, for you, will not change anything either. The rubber meets the road where a person has the full capbility to incisively determine how "continuation" becomes "change" and not, even, vice versa. How the weather changes so to speak. Someone says I write run on best when I am provoked. My opinion is that I write best when there is an example available that can make a difference to others than the example. So here we are with the hans example. It is how a person goes from an entry/exit mentality to a continuation/ change mentality. Hans will not as we all see. That is not in the cards for him because of the deck he plays with. I know he has a raincoat that he keeps in a closet. It was a gift (affront) to him from someone else. He has lots of things like this. Take the observations a person does. A small percentage of them deal with seeing the succession from continuation to change occur. They are the more important of all the several sequence segments of the trading cycle. By taking a small pile of daily charts (LOL) a person could on pages and pages of a yellow pad, record the sequence of obsrevations he sees on the charts that specifically deal with the interval of where continuation becomes change. Part way through the first pad he finds that his charts are inadequate in terms of what is there to work with. "he finds out that he cannot "see" the market as yet" Terrific. He can keep going though and get better at filling the yellow pads using the pile of charts. In a few days he has a better set of charts to use the next weekend to repeat the exercise. At some point he determines that the stuff he keeps seeing appear on his pads also appears at other times besides the continuation to change period he is assiduously examining. Rising to this level of sensitivity he then figures out by going to another level of detail and sensitivity that he CAN differentiate between a "real" continue to change sequence and one that is just a "hitch", "stall" or "dip" which to just ride through during more continuation. NB The R2R and B2B shows up in this process after the monitoring display is sensitive enough. So does other stuff not related just to continuation to change moments. The more precise picture of doing "trend analysis" is that picture of what is acquired to even have the basis for doing it. It cannot be done by most people. And most people keep the rain coat in the closet. A person can be in analysis denial for one long time. Looking in from the outside is not a place from which to try to make point with the small minority who are on the other side and doing the trend analysis job routinely and effectively. So hans is small potatoes in the trading and making money growth and learning game. Observing is a continuing routine effort that mostly yields the action (the last step of the four) to "HOLD" because nothing (in reference to the last four step sequence has changed). The two types of changes that do come along that start the continuation to change period are: Data Set changes and "the legal EOO" type thing which I call "What wasn't that?" Ommissions are a key to understanding the continuation to change moment. A R2B becomes an R2R through the ommission of the B beginning. That almost imperceptable hesitation for B to go back to work. It is a volume measure in a continuation to change of price observation. It is like not knowing how to read signals on Stochastics simply because you are reading and believing what is in books on stochastics. For example hans and dark horse agreeably make the point that if everyone does the same thing at the same time no one makes any money. Obviously the basis of continuation as stated in the P, V relation first Boolean statement is the opposite of what hans and dark horse have as their truths. This is why hans thinks we are not getting his point. We don't get his point because it is not part of the basic tenants of making money with a high velocity. To do "trend analysis" and especially where the rubber meets the road, you have to know something. If a person is able to fill his mind up with the knowledge available through doing drills with market information, then this experience leads to applicable skills. Observing and annotating into the right 1/3 of your screen, the future, which is moving to the present gives you a first opportunity to observe when the continuation is reaching a limit that invokes the change that always follows continuation. By having a good monitoring display, you get to see the small vernier endings of continuation that allow you, in the most timely moment, to "tack" into the next continuation period. All of this is crap to hans as he continually points out. To bad for hans.
observation? is it possible that the act of observing alters the outcome? quantum physics seems to thinks so...... on a concrete level, i have been "told" by those who know such things, that a computer program exists which allows one to determine how many computers and or traders have a particular symbol on their screen, or are recieving a feed with that symbol included..... is this accurate?? i don' t know...... something to think about......, surfer
Grob109, I wonder if you did any studies on the fractal noise. Are smaller fractals noisier than larger fractals? Does the discontinuity between the intraday fractals and the daily, make the daily noisier than the 60 minutes and 30 minutes? Is the weekly less noisy than the daily? There are probably several types of noise that have different distributions: white noise, black swan noise, etc. Thanks