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No more BS- what works and what doesnt.


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No more BS- what works and what doesnt.

  #31 (permalink)
 futrstrdr 
Cape Coral FL USA
 
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kazz,

I use a 9 bar EMA of the median price of the bar. Seems to work very well with tick charts and Renko bars. I also use only one EMA

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  #32 (permalink)
 JBWTrader 
Murrays Bay
 
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Hi Centaurer
I have to say this is one of the most important posts that any site(s) have had posted on it.
Well said and displayed too.
thank you for that

best
John




centaurer View Post
The biggest problem with trading is most people are just doing bad data science.

I don't see how you can even talk about what works without understanding dataset shift/covariate shift


Many trading strategies did work but the dataset shifted so that now the model is fitted wrong.

What works and what doesn't work is just too simplistic of a question.

Everyone knows at this point returns are not normally distributed but we still talk as if trades are independent and identically distributed. Like that matrix above is useful if this quote by Laplace applies:

"Probability ... is thus simply a fraction whose numerator is the number of favorable cases and whose denominator is the number of all the cases possible ... when nothing leads us to expect that any one of these cases should occur more than any other."
--Pierre-Simon Laplace

Clearly, that last part is highly problematic when it comes to trading.

IMO at some point you have to try to learn about other types of data science outside finance to become a better all around data scientist. Like if you learn a little bit about weather forecasting from weather data you of course would never take the last 10 years of weather data from a single weather sensor and try to make a model to predict the weather at that sensor tomorrow. That is obviously not going to work very well and why would you ignore the data from all the other weather sensors.


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  #33 (permalink)
Trader070
Den Haag, The Netherlands
 
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In searching info online always look at WHO is talking or writing. People who are trying to sell their stuff are obviously biased and their promo talk is often too good to be true (duh).

Not that their stuff is bad or worthless but there is NO holy grail, no “secrets”, nothing new that the pros dont want you to know, that kinda BS marketing talk.

For futures, I believe orderflow is the way to go. Why? Just think of this, what do you think algo’s are based on, chart patterns? Ofcourse not, I wish it would be that easy. Institutional algo programs are written on order flow and thats where we want to be.

Yeah it requires time and effort to understand it and trade on it but in the end it pays off.

Futures is order flow
Options is volatility
Stocks are an investment tool, for daytrading mostly a gamble, hardly an edge.

But thats my humble opinion

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  #34 (permalink)
 SpeculatorSeth   is a Vendor
 
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Everything works

given the right context.

Every trader I've met has had a winning streak of some kind at some point. There's always that short time period where everything clicked, and their strategy seemed to work every time. Then all the sudden it stops. That's why the question people ask is not about profitability, but consistent profitability.

The problem is the switches. The context created by the unique factors affecting trade that day will flip around your signals. What worked 80% of the time will now only work 20% of the time because its not the right context anymore. If you understand the context correctly then you can adjust your strategies and setups accordingly. That means you need to understand your market, and not just blindly follow a signal. Which also means it takes a lot of time and experience to develop consistency.

- SpeculatorSeth
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  #35 (permalink)
 
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 Blash 
Chicago, IL
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Work on developing a probabilistic mindset....it’s the key to this business. Everyone is all worried about finding the greatest entry. Thread after thread here, in one form or another, talk about this or that entry system.

Very few make it in this business. Those same few think in the way the market exists .... probabilistically. The vast remaining can’t break from thinking in terms of right and wrong. They say things like, “I didn’t see things clearly today”, “my analysis was off”.

Any trading system will produce both trades that work and ones that don’t. It has nothing to do with analysis.

Inevitably those lacking a fully developed probabilistic mindset will think after 5 (insert some number) losers in a row it is their fault, their erroneous analysis.

Ron


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  #36 (permalink)
 
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 deaddog 
Prince George BC Canada
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medj View Post
I’d like to ask the pros/ trading vets to share what they think is BS and what they think actually works in the market ie/ pure tech analysis (s/r, trend lines, PA patterns etc), fundamentals, order flow (tape reading, delta, vol profile, footprints etc), spreads, options (vol trading, hedging etc).

GL in 2019 all

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Nothing works all the time.


Trend following works with a trend following strategy that has an edge. So does any other strategy that has an edge you can exploit.

Mastering your emotions and having the discipline to follow your plan works.

I know it is cliché but keeping losses small and letting winners run works.

"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
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