Territory of probability - page 6
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In fact, the same nutritionist will send you to do tests to get the same set of numbers: pH, etc.
Don't you think it's silly to speculate about things you don't know, or to put "silly"/"not silly" labels on things you don't even try to understand? Let's say with probability theory, and statistical models based on it, you can describe the market with 99% accuracy. For you it does not mean anything. There will always be endless talk about rare exceptions, music, pictures, lengthy arguments and so on. But this is not a women's site. Believe it or not, this is a forum for mechanical trading systems, and whether you like it or not, you will use those 99% one way or another, knowing they exist or neglecting them.
Please excuse me, but successful trading in the market has little to do with mathematical (or other) knowledge! Otherwise all PhDs in mathematical (and other) sciences would be billionaires by now! This age-old dispute, what is trading on the market: science or art? It is still relevant today! And so the reasoning of any ordinary trader in this case is no worse than that of a trained mathematician. Strangely enough, they are on equal footing with the market! And the formal and mathematical base of the market is gradually created by such a joint work of many traders. Then some lucky seer will write a theory on the bones of these traders - and goodbye to trading on the market. What interest to trade when the result is a 99% prediction?) After all, we are primarily fueled by interest in beating the "dragon"! And money can be made in a less risky way! Although combine business with pleasure no one would refuse! I mean, that everyone on this forum is well able to speculate. And it is not so stupid!
Please excuse me, but successful trading in the market has little to do with mathematical (or other) knowledge! Otherwise, all PhDs in mathematics (and other) would be billionaires by now! This age-old dispute, what is trading on the market: science or art? It is still relevant today! And so the reasoning of any ordinary trader in this case is no worse than that of a trained mathematician. Strangely enough, they are on equal footing with the market! And the formal and mathematical base of the market is gradually created by such a joint work of many traders. Then some lucky seer will write a theory on the bones of these traders - and goodbye to trading on the market. What interest to trade when the result is a 99% prediction?) After all, we are primarily fueled by interest in beating the "dragon"! And money can be made in a less risky way! Although combine business with pleasure no one would refuse! I mean, that everyone on this forum is well able to speculate. And it is not so stupid!
Thought it was an interesting thread. I wanted to read it. And then you started on the good news... Well, it's very, very fun to read. If (as some people write) successful trading in the market has little in common with theorists, then what are you doing here, gentlemen? Checking your luck?))) (I don't have enough money)))) All professors are not billionaires because knowing the theory and being able to apply it in practice are different things. I think everyone "sees" how to hit a billiard ball with one over the other, take the cue in hand and what .... that thought wrong or not hands sharpened for that? By the way, a professor in Vegas spent two days pounding casinos on probability theory... And all the casinos in the world changed the rules of blackjack, and then he made millions on the book "How I beat the casino" - google it if you don't believe me in the late 1970s, I think it was.
To the author.
Point 3. I think you've phrased the question incorrectly. The probability of winning does not depend on what kind of lot you enter dynamic or permanent, it depends only on the TS. Here you must be referring to the size of the winnings at a distance. The way you choose your lot size for trading is secondary. The only thing that matters is the mathematical expectation of your TS. If your system has a negative expected payoff, you can enter with any lots, and you will lose everything on the distance. Accordingly, it is important to have +, +, +, -, etc. more often than +/- all the time. More + is determined by TC, otherwise there is no TC or the TC is a random entry. And why do you have plus and minus in your calculation of 10% (as an example)? In stop, understandably, put a certain amount of money, and why do you always have the same 10% and even? You do not take more money from the market))). You understand that you have not compiled the calculation correctly. Keep in mind that there are systems with positive expected payoffs in which the number of wins may be less than losses, but they are still profitable because the size of the winnings is greater than albeit frequent but small losses. As an example - head and shoulders. If you enter the market when the neck is beaten and put a stop outside the shoulder, and the take is sized from the neck to the top ))) head. Usually it's 1.5 or more pips more distance. It's not hard to calculate that 4 wins would give the same amount of pips as 6 losses (spread and swap omitted). Accordingly , analyze this timeframe. How subjective (do not listen to anyone) you see this figure there and if at least 50/50 times it works. then every time it pops ))) . you know what to do ... or analyze the next timeframe, pair ... you know. That's a positive expectation. But let's make a reservation. It's very important to be consistent! You set stop and take, like in a casino, and wait for one or the other to work (get your fucking hands off the keyboard!!! This also applies to professors), because many people don't understand it. The difference between the two is that they start to "think" something up, move the stop or take, and the result is an entirely different test from the theoretical point of view.
Point 2. will tend to 0 in real markets. Because of the swap.
Point 1. Probability of trend continuation above ... NONE. Here's why. The market goes south, north and "sideways". Just because there is also "sideways", your probability of going South only for example is only 1/3. It does not matter why, it matters where it may. The price does not remember and does not know that it is trending. It can go in three directions. That is all. So there is only a 1/3 chance in one of them. We cannot add news, events, mass psychology and other things to it. Only the degree of freedom, i.e. the possibility of choosing the direction of movement, and there are three of them. But it will go in one of them, while we may make profit only in two directions )))), if we stand right ))) hop you see how much choice and possibility to make a mistake.
The application of a theorist to trading is inextricably linked to the TS. And it is your set of methods, which together will be TS, that you can evaluate and calculate whether you have a positive expected payoff or not. You will have to thoroughly decompose the entire TS and check each signal on each chart and timeframe. Keep in mind that spread on small TFs and swaps on large TFs should be taken into account. This commission can significantly affect the results. For example. You have found a way to win 50 points every second time risking 30 points. It seems nice, but if you then pay the spread of 3 points, then the entry/exit for one transaction is 6 points. These 6 you pay in both successful and unsuccessful trades and then the combination of ratios may start to look different. 36 in risk and 44 in gain - feel the difference? There's still something here, and often the commission kills the positive expectation.
The funny thing is that everyone has read that the market is 70% going nowhere and 30% trending. But why all ... trade every day? Does the sun always "go down"? If we look at the trend trading, it's simple ... when you wait (don't forget this one). Choose filters that would catch the trend as early as possible, get a minimum of false breaks. Further, we should do something with the stop, i.e. move it in such a way that it would take more and not break earlier. Most likely, the stop movement in the position will be an exit strategy at the same time. We have to lose a part of the movement to understand that the trend has begun, and possibly at the end of the movement to understand that it has deflated. Or we have to work out the objectives when we hit the trend, for example TP=3*CL and we don't care if the market goes further. Here accordingly 2 false entries are easily compensated by one successful profit trade, but if we consider that the market may not reach the target, we can consider that we have time to break-even. But these scenarios should be dull, tedious and thoroughly analyzed and believe me in such a huge range of pairs + TFs in each brokerage company to find something with positive expected payoff is sometimes impossible (I mean me, and you do as you like). Your filters during detection, how many times did they say that the trend started and how many times did they really had? So learn to choose such filters ... And again on every TF and pair. I find it more interesting than to admire Malevich's black square. People say anything, even that if sports were useful, every Jewish family would have a barbell. No need to pay attention to that. We just take a terver in our hands and learn. One has to understand what an event is. It is, in our case, a set of many actions to be repeated in similar situations as much as possible. THIS IS IMPORTANT! If you do not pay attention to it, then you have different trials, not the same, and theory and practice are unlikely to meet. I.e. entry into the market at the beginning of a trend, when we get a TREND signal with our filters and act. And when we were told about it by the first channel on the news. You just have to understand that entering in the second case is not the same test.
When you get to grips with the basic concepts or when you get to grips with them. Something else will intervene. This is variance. I recommend you study this section of the theorist more closely. That's where everyone gets a surprise. And that is where all hopes are dashed))). In brief, here ... There is always the possibility that an event will repeat itself. For example, when you flip a coin, an eagle can come up 3,4,5 times in a row. That would be the variance. They usually tell newbies that 10% of a deposit in a transaction is safe and let's do it. They forget (or do not consider it necessary) to add that the TS should have a positive expected payoff. But now you've figured it out and created a TS with positive expected payoff, and ... ... and we have got into the dispersion band. In our case, instead of trends, there are false positives. And here begins the most interesting part. You know, we still have nerves))) instincts kill reason))). We start to fight between two things. The market has changed and we have to readjust the filters and start a new trial of the new TS or it's just a variance and we need to have a point of steel to just survive it (hands off the keyboard))). The rougher the filter, you usually miss a big movement at the beginning, the more sensitive one will give more false signals. By picking your instrument, you can learn a lot about yourself. Either you are like Vitsin in The Prisoner of the Caucasus, or you are the Brest Fortress. Experiencing dispersion on your own skin... what the fuck kind of professors can do that? So go in two directions at once. If we use a trading system with high expected payoff - for example head and shoulders on weekly timeframe it may win 3 out of 4, and then you can enter 25% of your deposit in a deal, but you'll get tired of waiting for such things. And if taking into account commission and swaps you find a pair and TF with average trends and may take more than one and a half times more than stop loss in half of the cases, then you probably should not put more than 5% of your deposit into the game. With years the skill and understanding will come, when the markets change and one has to abandon or modify the current TS, and when one has to sustain losses, wait for signals again and gain the notorious distance to the materialization of the positive expected payoff.
I don't think you can calculate any probability in trading.
I wrote above about a coin - here, yes, you can calculate the probability of tails - 50%.
That's it! We know the probability, we can think of something else.
But in trading, how do you calculate the probability and the probability of what? It turns out that we do not.
Consequently, no variance applies.
I don't think you can calculate any probability in trading.
I wrote above about a coin - here, yes, you can calculate the probability of tails - 50%.
That's it! We know the probability, we can think of something else.
But in trading, how do you calculate the probability and the probability of what? It turns out that we do not.
Consequently, no variance applies.
I'm not a professor, so I don't know how to say it scientifically.
But to calculate the probability you need to know the number of possible outcomes of the event.
For example, probability of tails = 1/2 = 50%, probability of six on a die = 1/6 = 16.67%.
But the price series, the results of TC - this is a completely different area, how to calculate the probability there scientifically I do not know, and even if it is possible?
Statistics can be applied to the results of TC, but there will not be any probability, variance, expectations.
Statistics can be applied to TC results, but there will be no probability, variance or expectation.
Of course, there will be variance and expectation, and anything else, because it doesn't matter what data is on the input.
Another question - what to do with all these values?
For example, there is a fractal dimension of a series (in our case - a price series). If the dimensionality is about 1.5, then the price series is "Gaussian" and the entire mathematical apparatus based on normal distribution and other methods of tera and matstatistics can be applied to it. If the digitality is somewhat greater than 1.5, then a flat is actually stated (which is known to end frequently with a sharp departure to one of the sides - though when is not known). If the dimension is somewhat less than 1.5, actually we can state presence of a trend in the market.
So, the dimension changes quite often and they try to apply the same methods for all states, which leads to wrong conclusions and losses.
I'm not a professor, I don't know how to say it scientifically.
But to calculate probability you need to know the number of possible outcomes of an event.