You were, and you missed it! Your first bet: $0 Toss # 1: heads ; Total win: $ 0 ; Your next bet: $0 Toss # 2: heads ; Total win: $ 0 ; Your next bet: $0 Toss # 3: heads ; Total win: $ 0 ; Your next bet: $2 on heads Toss # 4: heads ; Total win: $ 2 ; Your next bet: $3 on heads Toss # 5: heads ; Total win: $ 5 ; Your next bet: $4 on heads Toss # 6: heads ; Total win: $ 9 ; Your next bet: $5 on heads Toss # 7: heads ; Total win: $14 ; Your next bet: $6 on heads Toss # 8: heads ; Total win: $20 ; Your next bet: $7 on heads Toss # 9: heads ; Total win: $27 ; Your next bet: $8 on heads Toss #10: heads ; Total win: $35 ; Your next bet: $9 on heads Toss #11: tails ; Total win: $26 ; Your next bet: $0 So putting just $2 of your principal at risk in a timely fashion could've earned you $26. That's the power of trading with the trend.
If you can define the trend within specific objective parameters, one chart increment at a time, then that is all that matters from a trading or investment stand point.
I had the same impression when he came in my thread "How to define a trend 100% objectively ?" Some people like to impress others. Jerry, please continue with your interesting posts,links
We had a thread going that discribed how to define a trend in detail but a few ETers decided to destroy the thread because they couldn't comprehend the content. The link is below. Sorry it's about 245 pages but the first 100 or so should give you way more information than you need to set up your charts and see what I mean by "specific objective parameters". I've gotten many PM's from traders that have found the information invaluable to how they already look at the markets and their charts. http://www.elitetrader.com/vb/showthread.php?s=&threadid=80582&highlight=Volume+Bar+Range+Bar
Ok, but if the group is serious in discovering something, lets actually do something concrete in contrast to intellectual posturing and tossing theories around. This is entertaining and sometimes educational but you can't deposit a theory in the bank. Profits on the other hand can be converted into a bank deposit. So I'd propose a group test to see if a market has random or non-random behavior and hence tradable characteristics. It might work like this: 1) Take a data file of say 10,000 bars. 2) Break it into segments: system development (5000 bars), Out of Sample (OOS) performance (5000 bars) and a future segment unknown to all participants 3) Each participants apply their standard trading methods to the test part of the file. Play with it, tweak you parameters or models. 4) When finished apply the same to the OOS and post the results here We all have ideas and methods, the best of which we don't share, with a few exceptions. So I'm not suggesting that we discuss how we get whatever results we end up posting, just the numbers. People may choose to define what they do in general terms: chart patterns, random trades, NN models, modified Turtle Trader or whatever. Some general categories would give some nice information in that is the performance of the chartists is 50% better than any other group it may indicate something that I missed about charting. If everyone looks at their results and the results of others and says "gee, that's pretty random" then the random theory of the market is supported. I'm sure someone here with great knowledge in that area will volunteer to run the confidence levels and tell us how random or non-random it is. If on the other hand if 50% the participants show results with a Profit Factor better than the other 50% thought theoretically possible then the Non-Random hypotheses has a bit of support and bears further investigation. I'm sure there will be some who will have a theoretical reason why a simple concrete experiment is a useless idea or a waste of time. To these I'd say talk is cheap and unimpressive, action and results speak louder than words. If necessary we can move the project to a different thread or a different forum to avoid the distraction of professional critics. Any thoughts? Jerry030
another simple test would be to take a limited # of participants, say 1st hundred,assuming they will post regularly, and at 7:30 am , 11:30 am and 1pm cst, say bull or bear, and see how knowledgeable et 'ers are as a group, this survey can b a reminder to the geniuses of just how little we really know, and maybe spread a little humility among the many who seem to be oblivious to this fact, it would no doubt show how we are easily and repeatedly fooled by the mrkts
An idea.... however that requires a lot of work...posting on a set schedule. One may be out to lunch, on the phone or in the restroom at that specific time. If you fail to post the stats get all messed up. You are only likely to find 4 or 5 people here willing to commit to that kind of on-going daily effort. Also it would take hundreds of days to get enough data for valid statistics. It might be a lot easier to just do a simple statistical analysis using established statistical methods that are used in many fields of science, which is the basis of my suggestion. A great many food products and drugs are developed and marketed based on double blind testing. The market equivalent of this is involves the OOS and unknown future or hold out portions of my test plan. Any here who use a mechanical trading system be it in TradeSataion, or a custom application should be able to import a file I can supply of raw prices, transform it by whatever means they use and apply their current production trading methods to the test data and get results in about 30 minutes. This is a manageable time investment for most. Holding to a 3 times daily schedule for 6 months is probably less attractive to most, time being = to money. However there are risks. Itâs like showing your hand in poker. Once revealed you canât bluff anymore. There may be some here who have a professional or economic interest in the appearance, through their posts and theories, that they are the best there is in term of trading. Exposing your results to public comparison could be a disaster both to the ego and the income of such people if their results are in the lower quartile. Those in the upper quartiles would then tend to pretty much ignore their posts if not move their accounts elsewhere. I suspect that few here are willing to take such risks, but I could be wrong. Jerry030
It does prove that it's not too difficult to find a perspective for observation that gives evidence to support a conclusion. I'm sure observational evidence in the Middle Ages bolstered the theory that the Earth is flat. In fact when I look at the window it appears to be very flat. I can email you the picture if you like and you can compare it to what you see out your window. If we get enough pictures from enough people we may be able to prove that the Earth is flat as we canât see any evidence to the contraryâ¦.until we get to about 35,000 feet on our next airline trip. Then very precise measurements will show it to be obviously curved! Amazing what a change in the location of the observer will do! When Magellan conducted an actual experiment on the Flat Earth Theory by sailing around the Earth in the 1500's the theory lost many, but not all supporters. Here is a link to the Flat Earth Society home page: http://www.alaska.net/~clund/e_djublonskopf/Flatearthsociety.htm Jerry030