(This might need a thread of its own soon...) I don't understand being in error. Let me rephrase what I was trying to express: if we generate a series of random entries (bracket orders, fixed predefined loss and profit sizes, no signal per se) on any instrument (even a random walk), wouldn't the profit/loss ratio of the bracket be inversely proportional to the win percentage by virtue of probabilities? Fishing for a 1000-tick gain with a 2-tick stop-loss, to me it seems, would yield an overwhelming majority of stop-losses, in random or trending instruments alike, as price would be more likely to meander 2 ticks beyond our entry before it reaches 1000 ticks the other way. Conversely, a 2-tick profit target against a 1000-tick stop-loss would hit the target more often than not. (While of course, incurring massive losses, but those are beside my point.) I know markets aren't quite Brownian, but I still can't shake the "common sense" (to me) vision that the closer level to entry has a higher probability of being reached before the far one, at the very least in the case of a random entry. If I had the tools, I'd whip up a quick test run myself. I need to learn R... Thanks about the use of "discretionary". I meant it as manual execution of a system, which in this case of tape reading does involve discretion (which is why it cannot be automated). I realize a mechanical technical system could leave discretion out entirely.
VPhantom: Precisely how I understood you, and why I called it an error in thought. Here are my reasons: (a) We don't take random entries. So, when we don't do it why make that a premise for an argument? We are starting with a false premise; and, (b) Even by taking out the qualifier "at the very least in the case of random entry" in the quoted line above, the statement is not necessarily true if one uses signals based on context (the thesis of my previous response within which my comment should be interpreted). Note: I did not mean you, VPhantom, commited this error in thought. It is a error made by traders, in general, that do not use context based signals and are prone to this and many other fallacies. All the best. Regards, Monoid.
1st PnL is today's - over a few trades..., not one And yes I stopped after that - and simply watched FB the remainder of today (it kept climbing - me thinks tomorrow is gonna be fun ) I made goal so what the hey..., better still - I lost none of it on subsequent trades 2nd 2 PnL's - are yesterday's and Tuesday's respectively (18th / 17th) RN
Maybe.., this'll turn into the thread that changes someone's life forever - in a good way Just maybe RN
@Readneck: We don't need another thread. All one has to do is to read your posts in ET in a careful and deliberate manner with an open mind. I have nothing but the highest regard for you. When I think of you, this is what comes to my mind: "He who knows and knows he knows, he is wise -- follow him". Regards, Monoid.
(I'm glad I finally joined ET!) I was trying to restrain the thought experiment into some possible common ground with @marketsurfer . We are otherwise in full agreement that (successful) traders are making entries based on non-random and also mobile criteria. I, like many, hide my own stops behind structure, which makes their size vary a bit (and keeps me out of some trades - I dislike cash stops), and targets are an even more variable beast. Thanks for clarifying. I'm still a bit overwhelmed by your previous post though, which I've re-read a couple of times. If I understand correctly, you would use a system's win rate as the ultimate measure of success regardless of bottom line performance? I can think of ways a 70% winner could conceivably be a net loser... I like your notion of confirmation being distinct from target, but it still seems like something important is missing. Also, for systems with open-ended exits (i.e. MA crossing, manual tape reading) yes profit is unknown and variable, but some systems do set fixed profit targets according to initial conditions just like they do their stop-loss levels. Surely expectancy would be a more reliable measure of success for those?
Monoid, My heart is beaming..., and the highest regard - mutual Sir Thank You ================ Wise though..., naw..., just a simple minded dumbass redneck RN
LOL! JTRADES and those shirts. Hey RN, I'll literally buy one and mail it to you. Along with some moonshine. That was funny. -JS