1. Excellent that it can be that simple, but as you say, maybe that is the problem with this, it doesn't occur frequently enough to make it worthwhile. The 50% win rate was proven incredibly successful by geez. I read his entire journal. He started with a 70k account and put on a bet that he could grow it by 50% in one year I believe. He used a max loss of $200 a day, 1:2 risk reward ratio so his wins were around $400, but with commission and slippage, it ended up being about 1:1.8. He would put on about 20 trades a week. Some days he was down 4 out of 4 trades, but on the days when he got only 2 out of 4 right, he was well ahead because of his risk management. Overall, I think his win rate was around 49%. He more than won the bet in much less time. He cut his wins as you say, but he knew his system worked and relied on setting strickt profit and loss targets. So in essence, once the trade was on, it would either hit his target or his stop and then it was off to the next one. I am absolutely weary of who to take advise from but having lurked for so long, I see certain names popping up over and over again that I am learning to trust.
I just brought this issue up with NoDoji about cherry picking. I would certainly love to be able to cherry pick my trades so that they work out more often than not, but doesn't this defeat the purpose of statistics and backtesting? When you introduce too many factors then it will be impossible to match them all up when you are looking for the same setups, and if you can't match them up, then what good is your backtesting? I guess what I'm saying is do I need to know why a bull flag works or head and shoulders? If I see it forming and I know that more than 50% of the time the price drops after the right shoulder, then why not just put my trade on, with a stop above the head and my profit target at 2 times?
What somebody else does or does not do is entirely irrelevant to your success or failure. Reading books and journals and blogs and so forth may be inspirational and you may even get some ideas for research and testing. But somebody else's results have nothing to do with you. Don't study other traders. Study the market.
LOL... it better not be me! I can't quite figure out this Jack Heshey fellow. I see his posts everywhere, and he write quite a bit, but for the life of me, I can't really understand his posts. I think that what I've read about him is that he is an amazing trader who makes lots of money, so is this the same person who posts on here? I wish I knew what he was saying half the time...
okay. So say you dont want to know the reason why the bull flag works. But if you cant understand why it works, how do you expect to read price correctly enough to exit at the right time ? They both go hand in hand.
The day you understand anything JH says, is the day they come to take you away. We've lost quite a few here that way over the years. As long as his posts bewilder you, you're ok.
Oh certainly... and I should clarify that its not that I don't want to know, it would be good to know, but I feel as if my knowing wont change the outcome. If I know that a bull flag usually leads to a certain movement in price, I just put my trade based on how statistics tells me it will move. As for the stops, when I follow the system of geez, the profit target would come from something that is attainable based on resistance levels and taking into account the daily range of the stock, and the stop would just be half of this move to get the 1:2 risk/reward ratio. I do absolutely want to learn, but the system I believe has to be one where when you are in a trade you don't think about it too much because all your work was done before the trade and hence why you put it on in the first place.
http://www.theregister.co.uk/2013/10/31/dark_matter_still_missing_after_100day_experiment/ Now you see, this is the kind of racket you should be seeking. There's a REAL edge. You claim to have discovered some secret of the Universe , and if they'll fund you millions you'll find the proof. And if you don't they say, what a shame and you still get paid.
I fully agree! I am simply looking at how a wheel is shaped so I don't have to reinvent it when I go to build my own car. I think round shapes work better than square ones! LOL.... So when I see geez making great money with a disciplined system, I think a great start would be to emulate it based on my own edges that I learn from watching the markets.
Funny you should post that, I read the exact same thing here: http://www.gizmag.com/null-large-underground-xenon-dark-matter-results/29572/ I think politicians have it even better if you ask me... but lets not get started about that!