| Grhog - 2/16/2018 07:21
For you tech guys using charts. What is the percent wins on trading direction and duration by charting? Interested in odds and stats of technical marketing. Just thinking if it were quantifiable then it would be an easier to justify the cost and time involved. Otherwise it would be listed as a hobby.
Hi Grhog,
Well, IMHO, it's kind of a loaded question, but I will give it a shot. First marketing is not trading. They are two completely different things although the tools used can be similar. Marketing you have no choice, risk/reward might be complete garbage but you still have to participate unless you have endless resources. At some point, you have to make a sale period. Trading is much different. The cost to enter is much less trading. And unlike marketing you have a choice to participate or not. Don't like the risk...no trade. Don't think the reward is good enough, no trade. Chart pattern doesn't make sense...no trade. Don't feel well that day....No trade. Have to plant corn next week...No trade. Just want to take a vacation...no trade. Very much different. Secondly, a every trade should have a stop whereas in marketing your risk is the effectively whatever the swing will move against your cost. A stop defines what you are willing to risk, the reward metrics can be calculated from that No stop - no risk - No trade. Marketing - not so much. Third, the biggest issue in marketing is how much will I produce. Once you know it, you know your cost, and you can work from there. But if you are looking to forward sell, and mother nature kicks you in the knee caps, your profitable marketing decision may not be any longer. There are lots of differences.
Unfortunately I have spent way too many hours chasing stats, and to be honest, percentage wins is a pretty poor metric to measure systems by. I have seen some systems back test at 80% winners, and yet will loose money if for no other reason they cannot overcome the costs of trading. Likewise, I have seen systems and some of the big name traders of the past, have a horrible win/loss percentage - like below 20%, but end up making big money. For me, it's always reward vs. risk first. I could be absolutely certain something is going somewhere, but if those two metrics are not available, it will end up a learning exercise because there will not be a trade. Then you have to consider other factors like portfolio exposure, sector risk, equivalent risk, which can wave off a trade as well. There are just alot more factors to consider than "it's going up....or down", or the win pct. JMHO.
Take Care
Edited by J P 2/16/2018 10:42
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Charts and technical analysis
