Why Is The Obvious Not So Obvious?

Discussion in 'Risk Management' started by nysestocks, Jan 25, 2009.

  1. panzerman

    panzerman

    Except in trading the odds of a given event occurring are never known with fixed certainty. Whereas in gambling they are fixed and known (largely.) Vanilla option delta is about the closest we can get to fixed odds, and even then it is only an approximation.

    I'm not familiar with other derivatives like barrier options and knockouts, but I doubt they have fixed and known odds either.
     
    #6631     Feb 21, 2020
  2. smallfil

    smallfil

    Trade setups never work 100%. Most are 50/50 at best and Bulkowski already analyzed the different patterns. If you are in a casino playing slots, do you know when the slot jackpot will get hit? You could keep playing a long time and and lose all your monies in the process. Chart patterns are more predictable to a certain degree. Now, you do not know if your target price will get hit but, if it gets hit a number of times and your multiple reward is say 4 times your risk, does it really matter? At 30% win rate, you will make monies. Nobody is going to get 100% wins and not lose. Not even in a casino playing say both black and red in a roulette wheel. The 0 and 00 which is green will kill you.
     
    #6632     Feb 21, 2020
    peter_pan likes this.
  3. odlareg

    odlareg


    From "the other forum" : How To Trade: Full Stop, posted by The Expert Feb 19, 2010

    "30 days or prices showing the running average 30 day price next to the daily price. This can be set up with live data feed or done at EOD. Same for 10 day and 5 day. This is a basic step and will just make a point that needs to be known by those who put their money at risk in the market. For clarity, we are only discussing US stocks, as Futures and Commodities behave differently, due to obvious reasons. I consider all non US stocks to be too risky, but that is my personal opinion."

    So...... why is someone who is anti indicators relying on averages?

    GO
     
    #6633     Mar 21, 2020
  4. Onra

    Onra

    He probably didn't consider them to be "indicators"; just averages of daily ranges.
     
    #6634     Mar 21, 2020
  5. odlareg

    odlareg

    Nope.

    GO
     
    #6635     Mar 25, 2020
  6. Onra

    Onra

    That's an interesting response GO...
    He was talking about ADR's right?
     
    #6636     Mar 25, 2020
  7. Nemesis

    Nemesis

    I think this thread developed away from the original message, to suggest that a process or systematic method is needed rather than trading haphazardly, but as far as the clue in the original message is concerned then adequate price range seems to be the obvious pre-requisite.
     
    #6637     Jun 7, 2020
  8. Onra

    Onra

    I never noticed it was started in the "Risk Management" section.

    Yet is has to be some method, closely connected to the price range.
     
    #6638     Jun 7, 2020
  9. Ed48

    Ed48

    The obvious pre-requisite to (successfully) trading any market is you first need to discover an approach which will actually make money.

    Without that, all that risk management and position sizing do are slow the rate at which you bleed.
     
    #6639     Jun 30, 2020
  10. Vindago

    Vindago

    obvious pre-requisite to (successfully) trading any market is EXPERIENCE and CONTROL, without these there is no way to make money consistently.

    I believe that once these pre-requisite are acquired all the rest (method, risk management, position sizing, etc.) will come into place fitting together easily.

    I know I have acquired some of the former but I am still struggling with the latter:banghead:
     
    #6640     Jul 4, 2020
    damnpenguins, KDASFTG and slugar like this.