Is it possible to develop any trading strategy to become profitable? - page 2
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The funny thing is that the possibilities are NOT infinite.
It's remarkably more simple.
Because there are only two possibilities namely: BUY and SELL !
Yes but if your not in the market, your not making money ^^
Not loosing money either, which is better then taking a loosing trade.
I always consider my next trade to be a losing trade......
to marco: you're wrong, indicator should be objective, so if you open your trading system margin to ambiguous interpretation you don't truly have a system. I think there ARE custom indicators that are holy grails out there, and infinite of them, you just have to be creative enough to find these patterns, and the only way you can disprove it is to test all possible combinations which are infinite. You must have tried moving averages with some histogram, and failed, and them think indicators doesn't work, but you just scratched the surface of an ocean of possibilities
mrluck012, I think both you and Marco are right: you are right that a trading system should not give ambiguous signals. Obviously, you are talking about a Holy Grail system. Marco is also right: there are only two options at any particular moment, BUY or SELL.
I believe that there is only one correct trend for intra-day trading, one correct trend for inter-day trading, one correct trend for the next level of trading, etc, etc. One correct trend for every level of trading.
So, for example, for intra-day trading: there is only one correct moment to BUY and one correct moment to SELL for maximum possible profit in ever UP cycle and vice versa for every Down cycle. I also believe the market, generally, goes from UP to Down to UP to Down, continuously - excluding news events. They have to be excluded.
That leads me to the logical conclusion that, for example, for intra-day trading there is only one best Holy Grail system. The one that correctly indicates that single, optimum BUY or SELL moment. In this case I am only talking about that system that generates the maximum possible profit in ever UP cycle and every Down cycle.
You are right that there are infinite Holy Grail systems for every level of trading since there are infinite levels of risk taking or risk tolerance. I am only talking about that one ultimately best system that always generates the highest possible profit UP and the same for Down, every time. So, I am talking about the most profitable of all Holy Grail systems.
I think, to some degree, we all seek after that most profitable system. But, eventually we accept a lower level of profit for infinite possible reasons.
I have also very recently realised that this way of thinking/working is the greedy (normal? :-)) way of developing an acceptable trading plan: seeing what is theoretically the highest possible profit and eventually settling for a lower level for those infinite possible reasons. What I realised a few days ago is that it is perfectly logical to start at the opposite end - start on the monthly chart with the much lower annual profit possibility and work to an always shorter time frame and eventually hopefully a higher annual return. I would name this opposite approach the unexciting way. Greed always generates a certain level of excitement.
As far as news events are concerned: I believe a back-testing system that does not make specific allowance for news events is not very efficient.1- A Stradivarius example doesn't fit here in trading. Trading systems must not be up to interpretation, they should be procedural, for example, anyone with coca-cola formula, could then reproduce it and make millions, the problem is to find the formula testing all the ingredients, for trading is the same principle, there are infinite possible combinations of systems, just like chemistry, and to disprove indicators and technical analysis, you must test all of them, which would take infinite amount of energy.
2- A trading system is not so simple as just buy and sell, you can't "understand" trading completely, just as a chemistry teacher can not find coca-cola formula by himself. Everything in the universe is made by 1 type of atom: hydrogen, and the combination of it create all complexity anyone can see around, so 1 type of atom can create infinite possible combinations of molecules, so in trading systems you can use math to create even entities, in trading you have price and time, but with only that you can possible create infinite complex systems, nobody can "understand" it, doesn't make any sense, because you can say you understand something if you tested it, but you can't test all these possibilities, so if i say that there are infinite holy grails in technical analysis, nobody can prove i'm wrong, because he should brute force infinity
It's genetics !
Now i am certain !
Look at the sheer amount of words....
1- A Stradivarius example doesn't fit here in trading. Trading systems must not be up to interpretation, they should be procedural, for example, anyone with coca-cola formula, could then reproduce it and make millions, the problem is to find the formula testing all the ingredients, for trading is the same principle, there are infinite possible combinations of systems, just like chemistry, and to disprove indicators and technical analysis, you must test all of them, which would take infinite amount of energy.
2- A trading system is not so simple as just buy and sell, you can't "understand" trading completely, just as a chemistry teacher can not find coca-cola formula by himself. Everything in the universe is made by 1 type of atom: hydrogen, and the combination of it create all complexity anyone can see around, so 1 type of atom can create infinite possible combinations of molecules, so in trading systems you can use math to create even entities, in trading you have price and time, but with only that you can possible create infinite complex systems, nobody can "understand" it, doesn't make any sense, because you can say you understand something if you tested it, but you can't test all these possibilities, so if i say that there are infinite holy grails in technical analysis, nobody can prove i'm wrong, because he should brute force infinity
And now look at this:
BUY
SELL
1- A Stradivarius example doesn't fit here in trading. Trading systems must not be up to interpretation, they should be procedural, for example, anyone with coca-cola formula, could then reproduce it and make millions, the problem is to find the formula testing all the ingredients, for trading is the same principle, there are infinite possible combinations of systems, just like chemistry, and to disprove indicators and technical analysis, you must test all of them, which would take infinite amount of energy.
2- A trading system is not so simple as just buy and sell, you can't "understand" trading completely, just as a chemistry teacher can not find coca-cola formula by himself. Everything in the universe is made by 1 type of atom: hydrogen, and the combination of it create all complexity anyone can see around, so 1 type of atom can create infinite possible combinations of molecules, so in trading systems you can use math to create even entities, in trading you have price and time, but with only that you can possible create infinite complex systems, nobody can "understand" it, doesn't make any sense, because you can say you understand something if you tested it, but you can't test all these possibilities, so if i say that there are infinite holy grails in technical analysis, nobody can prove i'm wrong, because he should brute force infinity
You don't need to understand trading completely. You just need to understand why it can't be forecasted like you try to do, with a formula. That is enough to understand.
Just answer a simple question: If there are X players in the market, and the whole money in the market consists of the money that those X players deposited in their account, and the brokers of these players take their share, so the total amount of the money deposited is already less then started - no matter what strategy they all use the whole are already in a lose.
And on top of it each trade is a movement of money from one player to the other - so of course in definition some will lose, no matter their strategy - because there is no one strategy to always profit as any player can change the way he acts and so the whole strategies change.
This you can understand?
1- A Stradivarius example doesn't fit here in trading. Trading systems must not be up to interpretation, they should be procedural, for example, anyone with coca-cola formula, could then reproduce it and make millions, the problem is to find the formula testing all the ingredients, for trading is the same principle, there are infinite possible combinations of systems, just like chemistry, and to disprove indicators and technical analysis, you must test all of them, which would take infinite amount of energy.
2- A trading system is not so simple as just buy and sell, you can't "understand" trading completely, just as a chemistry teacher can not find coca-cola formula by himself. Everything in the universe is made by 1 type of atom: hydrogen, and the combination of it create all complexity anyone can see around, so 1 type of atom can create infinite possible combinations of molecules, so in trading systems you can use math to create even entities, in trading you have price and time, but with only that you can possible create infinite complex systems, nobody can "understand" it, doesn't make any sense, because you can say you understand something if you tested it, but you can't test all these possibilities, so if i say that there are infinite holy grails in technical analysis, nobody can prove i'm wrong, because he should brute force infinity
Even the weather, which is a far more simple fenomena then trading, does not have a procedural way to forecast. It is ever changing and is affected by things that can not be forecasted.
If there is a procedural way to forecast weather then how far do you think it possible? Can you show this procedural way?
Even the Irma storm in USA last week changed it's course in the last days.
You are saying nonsense, pure misunderstanding and wishful thinking. You don't see the whole picture but focus on your own narrow details.
If you zoom out you would see that a game where there are not enough chairs for everyone can not have a strategy for everyone to win.
1 -"its genectics"- Yes really is, more than you think, a brain is created by genes, you know, jews for example are genetically the best traders in the world, i can prove it there are several articles...
2- "trade is a movement of money from one player to the other..." - Yes infinity explains it, if someone create a procedural way to calculate the correct price better than others, he will make profit, but still there will be infinite new formulas even better than the previous, so the market will allways be less than 100% efficient, because- its infinite
3- About the weather "can you show this procedural way?"-- You can't compare trading with the weather, in trading you only have 2 directions, in weather you have several scenarios, so the problem grows exponentially each new variable, but i can predict when its gonna be day or night, (only 2 variables) so it's more easy, like trading.
4- Yes i agree with Marco, there is no right or wrong, there is only what makes money and what don't