The same arguements cycle through this forum on a regular basis. I have yet to see one resolved to anyones satisfaction. To quote the Bard: Much ado............
Because, like Jack, I enjoy stirring it up a little. And I've seen this stupid "we don't predict" argument enough times before to know that its a religion. KP, you're just talking about using a mental device to detach your ego from the fact of the prediction (you predict that if u do ur system x times it will produce a profit ... whatever you do you are operationalizing a prediction). I too am a great fan of Mark Douglas's insights although not of his theories of the brain. An alternative is to accept the prediction and just let go of attachment to the outcome. None of this is about trade systems but all of it is about successful trading. And why would any sane person trade if they didn't predict that it would give them a satisfying outcome. __________________ The things people believe in are usually just what they instinctively feel is right; the justifications and arguments are the least important part of the belief. That's why you can win the argument, prove them wrong, and still they believe what they did in the first place. You've attacked the wrong thing. So what do you do? Agree to disagree. Or fight. - C. Zakalwe.
KPC, for what it's worth, I agree with you. The problem is that these arguments get mired in words and the meanings of words and the shadings of meanings. When those who trade in the moment talk about "prediction", they're referring to those who enter because price WILL do such and such, and it is this tunnel vision that prevents the trader from cutting his losses short and can even prevent him from fading his own trade. Those who trade in the moment, however, enter on the basis of what price SHOULD do, what it is LIKELY to do, i.e., there is no certainty. And if price doesn't do what is expected/anticipated/predicted/whatever, then the landscape is reassessed: hold, exit, reverse, etc. There is no deer-in-headlights state but an active and ongoing assessment of what is happening at the time, not what is "predicted" to happen or what had been predicted to happen. LC
"What we do not want to do is put our parameters on the market......we do not want to tell the market what it should do. We want to surrender to what it IS doing. If we are doing what it is doing then we are making profits.....and that is what matters in markets." "Everything whatsoever that states what a market should do is absolutely irrelevant. (Note: Not necessarily wrong, just irrelevant.) The only thing that matters is what the market is actually doing." Wells Wilder, Adam Theory of Markets, P. 23-26. Being in the NOW is about what IS happening not what SHOULD. I do agree with everything else.
For what it is worth, I believe there is an "ultimate trader state". Few ever get to this state. In this state, the trader is completely in the NOW. He goes long purely because price is rising and short simply because price is falling. There is no "system" so no prediction, as you put, would ever be done. It is a letting go and surrendering to the market. It is more a direct perception of it. It is not in any way a "figuring out" of the market, rather a falling in tune with it. In this state, It is not so much a matter of "knowledge" and analysis as it is a function of consciousness, of being able to let go and flow with the continually changing way it is. To look at reality. Which way IS it actually going?
Whatever you say yoda. You can be in the NOW all day long, but the moment you put on a trade, its because you are predicting its likely to be in your favor. Otherwise you are just being stupid and flipping coins. Prediction is not avoidable if you are attempting to make money.
We're not telling the market anything. But we have to make a decision whether to buy, short, cover, etc, based on what is happening now. What you call it is beside the point. LC
Actually, your focus in all this is not IS, but HAS BEEN. If you are going long simply because price has been rising, or short because it's been falling, then you are predicting that price will continue to rise in the first case, or fall in the second. You have no other reason to go long, or short. On the other hand, if you're getting all of this out of books, the process is much simpler and easier. LC
Wrong. It is about what the market IS doing. Now here is something more for you to berate me about: There is a certain natural law of motion at work here. Bodies have inertia; that is , they tend to keep on doing whatever it is they're already doing, unless some force acts to change them. If a body is at rest, it tends to stay at rest. If a body is moving, it tends to keep moving-in the same direction and with the same velocity that it already has. "Einstein referred to this as "laziness". That is, a body tends to do what is the laziest thing possible-and the laziest thing possible is to continue do whatever it's already doing....", Wells Wilder, Adam Theory of Market, P. 56. The market works the same way (we are talking about natural laws here). IT TENDS TO KEEP ON DOING WHATEVER IT'S ALREADY DOING". If it is going up with a certain velocity it will tend to keep on doing that unless some force (buying or selling pressure) causes it to accelerate or decelerate. This is also true if it is going down or sideways. THEREFORE THE MOST IMPORTANT THING IS TO UNDERSTAND WHAT THE MARKET IS DOING NOW.THIS IS THE "IS", NOT THE "HAS BEEN". p.s. Water freezes at a certain temp. This is a law of nature. It is not a pridiction when it is cold to say the water on the ground will freeze.
The system or the prediction in this case is: if price is rising buy (because we predict that it will continue to go higher out of inertia) and sell if price is falling (because we predict that it will continue to go down out of inertia). I can type just that system into any trivial trading system software, and backtest it for expentancy on the past. I then may trade it with real money in realtime because I predict that it will continue to have positive expantancy in the future. No matter how you spin it, there is always some cause and effect, and therefore prediction, that is being done. It is either explicit as a heuristic, as in the case above, or implicit in your brain and touted here on ET as "art". People that can turn their "artistic" thoughts into heuristics are one in a million. People here seem to think that prediction means they know the where the market prices will go. Prediction means [taking advantage of the fact that] cause is followed by effect. Nothing more. Probabilistic prediction [acting on positive expectancy given our utility function hopefully] is what we do in uncertain iterative mathematical games like trading. nitro