WHY ARE TRADERS LOSING MONEY? - page 23
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Traders lose money because they mistakenly think trading is easy.
Effective trading requires at least serious experience, reliable, proven methods, calculation, analytical wit, strong nerves and ... Good judgement!
How many of us can say that we have all of the above? )
And about the randomness of the price... What difference does it make if you can make money on it! )))
Besides, the wave structure of price movement is not random by definition, because it brings ordering and balancing of forces. Add to this the channel structure and fractal nesting.
Random...
Yes, you can make it even simpler: +1 or -1 is added, depending on where the random got to.
Yes, that's understandable. By the way, it's an interesting thing:Here's the file:
That's it, I'm off to bed.
Conclusion: the price at time period N represents the value of the previous price at time period N-1, which has been changed slightly at random :)
Всё, довольный иду спать.
Вывод: цена в период времени N представляет собой значение предыдущей цены в период времени N-1, которое было незначительно изменено случайным образом :)
I'm not against it, I just want to substantiate it.
I'm not sure what to do with it, I just want to justify it.
зы вообщето вопрос животрепещющий тк если будет доказано случайность приращения цены то делать тут нефиг значит в перспективе слив со скоростью спреда.
Well, it is not yet very clear how this will be proven: there is evidence to contradict the independence of price increments. Take Peters for example.
Из чего такой вывод ?, (я не против просто хочеться обоснований).
зы вообщето вопрос животрепещющий тк если будет доказано случайность приращения цены то делать тут нефиг значит в перспективе слив со скоростью спреда.
Get it .......................
There are two irreconcilable camps. And this thread is yet another confirmation of that. One believes that price movements are non-random, predictable. It is enough to identify all cause-and-effect relationships, and the future price can be predicted. Others believe prices cannot be predicted and are chaotic.
Two models of price behavior
If a trader believes that price movements are predictable and not a random process, then he/she will come to a conclusion that it is possible to find a "magic formula" and use it to build a very effective trading system and gain big regular income. It is not a secret that most people do it all their lives and never find their way to wealth.
Considering price movement to be a random process, a trader takes a probabilistic approach to price chart analysis without trying to predict future prices. He uses the price charts for money management. In any case, the two approaches are only two different models of price behaviour.
Let us consider a few arguments in favour of the random price model. To do so, using the Excel spreadsheet random number generator, we will try to reproduce the price graph. First of all, we will generate data in the table and then, using the import operation, we will plot them in MetaStock.
We will take as an axiom the assumption that the price chart can be modeled by a "brown noise" generator. It is assumed that a chart of "brown noise" is a sum of independent random increments. In our case we will use the closing price and add to it the closing price of the next day. The value can be either positive or negative. Assuming that the closing price does not depend on the previous day's closing price (it usually does in practice), the resulting chart is a "brown" noise chart. For MetaStock to be able to accept data from the table, it is necessary to correctly place the headers and the data below them. In the proposed table fragment, the first seven columns are used for importing, while the eighth and ninth columns are used by the table itself.
So, we have to generate the data. The initial values are placed in the second row. We assume that these are the values in the initial placement of the stock. The first column is filled with fictitious accruing dates, and the remaining six columns, starting from the third row, contain the formulas. First of all, the closing price must be generated. To do that, we place the formula in the third row of the "Close" column: =E2+(IF(SLSC()>LSC(),1,-1))*(E2*$H$2/100*2*LSC()).
A new random value must be added to the previous value, 40. The formula generates it using the following algorithm. The table generator generates a random number between 0 and 1. First, we calculate the increment value (right brackets), multiply the obtained value by -1 or 1 (middle part of the formula, prices closed below or above the previous day) and add the obtained increment to the value of the previous day. The result we get is 40.66. The second line of the eighth column shows the maximal change of closing prices in percent.
Now let's generate OPEN, HIGH and LOW relative to the closing price. The third line of the Open column contains the formula: (C3-D3)*CHIS())+D3, in the "High" column: =E3+(E2*$I$2/100*2*CHIS()), and in the "Low" column: =E3-(E2*$I$2/100*2*CHIS()).
The last two formulas use the High and Low percentage change, the maximum value is placed in the ninth column. For "Volume" we use the formula: =1000+($F$2*СЛЧИС()*2). Using Excel's built-in function, we fill the columns with formulas down to reasonable limits, in each row we get quotes of one day.
The table generates data, with new values appearing each time a recalculation is made. To compare results, you need to copy 1-7 columns into a new table and import the data into MetaStock from it.
The chart is very similar to a real stock chart. You can plot trend lines, support and resistance, and apply all existing indicators. And here is the same chart in a condensed form. It will clearly show long-term trends, which is usually the main argument for supporters of the non-random nature of price movements.
If we experiment with the values of the eighth and ninth columns, we will discover many interesting things. Sometimes the chart will look like a FOREX currency chart, and sometimes it will look like a blue-chip stock. Some "stocks" have a pronounced long-term uptrend or downtrend, and some are almost always in some sort of price corridor. And how many continuation and reversal figures can be found! :)))))
Maybe we all here are just part of the legend? (That somewhere there is a 5% of traders who steadily make money in the market)
Or maybe we are the ones who create the legend?
Either way, only the bookmaker wins!!!
Получите .......................
1. You should have referred to Georgi Petrovich for once, just for the sake of decorum.
2. Richie, are you talking about psychology or psychiatry?I'll continue, if no one is offended:
Let a normal, pouring trader like Shura Elder is an average normal person, in terms of psychology.
Then it turns out that most of us suffer from mental retardation (in psychology - oligophrenia).
There is no precise assessment of the degree of oligophrenia, unfortunately, but there are symptoms, if I may say so:
- poor memory;
- underdevelopment of speech;
- uncritical thinking;
- various forms of perception of reality;
- emotional instability;
- inadequate behaviour;
- attention deficit disorder;
- etc.
Now imagine yourself in Shura Elder's shoes :))))
3. Randomness is an unrecognised pattern. Not to be confused with unknowable regularity.
1. Вы бы хоть раз сослались на Георгия Петровича,- так, для приличия.
2. Richie, Вы о психологии, или о психиатрии?:3. Случайность - непознанная закономерность. Не путать с непонятой закономерностью.
tara wrote >>C-4 wrote:>>
People who claim that the price change process is random are Critics. Because if they weren't Critics, they would have found consistent patterns of price change, and hence not claiming that the price change process is random.
3. Randomness is an unknowable pattern. Not to be confused with unknowable regularity.
Confused?
Confuse who?
Critics and oligiphren? Don't bother suggesting to normal pouring traders ..............., not to be confused .......... :)))
I do not understand too, according to the text, are you talking about sinful or righteous?
But somehow it seems that you take bets...
P.S. There's no one to take offense at. Ward 7 (for example), .... A shadow and Hamlet enter... Hamlet Where are you going? I'm not going any further. Shadow Take heed! ...
referring... William Shakespeare - Hamlet