The Electric Day Trader and Ruin. How probability oppposes short-term investors.

Discussion in 'Trading' started by ByLoSellHi, May 26, 2009.

  1. most academic no have properly capitlize to trade, that's why angry at good trader

    edge is estimate
    probability is estimate

    estimate can often make big mistake

    trader should have probability in toolbox, some technical analysis too, know and respect the random walk, but also the momentum, and a mean reversion

    trade in direction of trend, big moving average, this drive economic fundamental
     
    #61     May 27, 2009
  2. I have an annualized 28.5% return, which beats every single mutual fund in the country in that time period, and never had a day where I closed below my starting capital. That means that poster has no clue what he's talking about, and you obviously don't know how to analyze a system. You can look up mutual funds at your broker if you want to verify that claim. There's one long short bond arb fund that had greater than 20% APR in the last 3 years.
     
    #62     May 27, 2009
  3. Instinct, emotion, character and personality. Most people have a hard time controlling themselves even in normal day to day life, whatever normal may be. Put people into the trading arena and things really start to go heywire. A good trader can stay on top of thier urges, so to speak, but no man alive can totally eradicate what has been in the making since the primeordial soup sloshed around our planet.

    Day Trading For Dummies.

    In what sense and context though?



    Dackster.
     
    #63     May 27, 2009
  4. if have no need probability and the chart, but close information also good
     
    #64     May 27, 2009


  5. Time is against you, and your instincts, it's a constant battle that can't be numerated and mechanised. It's unfortunate, but that's just the way it is, Ms V-G.



    Dackster.
     
    #65     May 27, 2009
  6. Academics aren't suppose to trade they are suppose to research and understand environments (building blocks that create these environments). They are simply too lazy to do this.
    An edge can be fixed.
    Probability is always an estimate.
    A trader doesn't need probability but must have patience and common sense.
    I fully respect Random walk but there is a way to see the embedded consistency in it.
    Mean revision is closer to a statistical outcome than a natural outcome and must be used accordingly in a static environment.
    Momentum is a powerful tool but it's useless if misunderstood or not read correctly in a fixed environment.
    Trends are only useful if one can define them specifically inside THEIR OWN trading environment.
    Moving averages, though useful on static charts are less useful on fixed charts.
     
    #66     May 27, 2009
  7. Great point. This is why the most consistent systems out there take the "thought" process out of the equation.
     
    #67     May 27, 2009
  8. Wow. If true, that is seriously spectacular. You never had a single day where you lost any capital allocated for that day from the time you started trading until close? Even in the last year?

    And your annualized return of 28.5% is for how long of a time period? As you know, annualized simply means extrapolated to an average over a yearly window.

    I've seen many, many, MANY funds that have had a 48% return one year, and a negative 52% return the next - this is especially true of some tech and high beta 'focus' funds.

    Are you returns audited by any credible agency?
     
    #68     May 27, 2009
  9. Time's only relavance to consistent trading is "the period one chooses to apply his proven edge to price movement".

    Numerated, no because the spam of the cycles that make up price movement aren't EVER consistent but mechanised, yes because the the building blocks that make up those cyclic moves are perfectly consistent.
     
    #69     May 27, 2009
  10. andrew lo is academic and the successful trader
    traders do need probability estimates, at least i think so, i make look at hoadley probability calculator, for free, this predict range, but not direction, true

    intraday, 1-point trade on the es is very high probability, but not 7 point trade

    intraweek, 10-point trade on es is high probability, but not 30 point trade
     
    #70     May 27, 2009