But how can you argue it's not an edge when it has been clearly demonstrated to be an edge over a statistically significant sample? (come on be realistic, 1000 trades is really quite a large sample on daily time frame)

why have you accepted the price-predictability assumption?

Maybe because your system relies a lot more on getting the direction right? Have you tried using larger RR though? I wouldn't dismiss the results so quickly since she did use all available data for EUR/USD. There seems to be something systematic ...

why have you accepted the price-predictability assumption?

Hey thanks, will take a good look at that

why have you accepted the price-predictability assumption?

actually my strategy is fading moves/reversal/retracement, not sure how you got the idea it's a breakout.. I can't deny a huge part of the edge comes from the lines I draw... and I don't trade eurusd. I don't think it's gambling; I know because I ...

why have you accepted the price-predictability assumption?

Ok I think we diverge fundamentally on some beliefs regarding the market. At this point I have no idea who's right/wrong because most of these beliefs are formed from personal experience and sometimes faulty reasoning/ bias so I am open to accepting ...

why have you accepted the price-predictability assumption?

I can't see the connection between having a slight advantage => gambling. If there is indeed a slight advantage then why not shift all systems to have high R:R to exploit this slight advantage? Or does this slight advantage disappear under certain ...

why have you accepted the price-predictability assumption?

Yes, I am aware the expectancy might converge to minus the spread, but my question is in two parts... 1) Does any RR have an edge on its own? 2) Does high RR outperform low RR? 2b) Under what conditions might one outperform the other?

why have you accepted the price-predictability assumption?

But if you can prove to a certain degree of confidence that a high RR outperforms a low RR in a random trade scenario, you can potentially make a case to abandon all low RR trading systems. I'm not looking for a standalone trading system from this - ...

why have you accepted the price-predictability assumption?

Hmm... ok thanks for the explanation!, but I will need to know more about how you randomised the trades, and also how you determined the parameters (SL/TP) for the different time-frames, and whether did you account for spread, did you take on more ...

why have you accepted the price-predictability assumption?

Anyway, if anyone is interested in exploring this question further together, do drop me a PM.

why have you accepted the price-predictability assumption?

Would you mind making public the data you've documented and explaining briefly the experimental and statistical methods you've used? If it is not done in a rigorous fashion then really nothing can be concluded.

why have you accepted the price-predictability assumption?

Just to add, many relatively recent studies have shown that financial markets fluctuations are better modelled by a power law distribution (which has fatter and longer tails) than a normal distribution. url url ​ This seems to lend weight, if ...

why have you accepted the price-predictability assumption?

Interesting; I have spent around 9000~10,000 hours on trading trying to find these "edges" too and I have arrived at the opposite conclusion: my intuition tells me it exists... But then again intuition is extremely fallible at times...

why have you accepted the price-predictability assumption?

How do you know it doesn't? Are you sure it doesn't? Notice there are two different hypotheses I am testing; even if it doesn't produce an edge on its own, as long as it produces an edge over the rest of the risk-reward ratio it can still be useful ...

why have you accepted the price-predictability assumption?

Power of the long tail. Yes, I am inclined to think that no matter what time frame there's an edge in this. It is to forget about 1:2 or 1:3 and only go for the trades that have potential of 1:7 and above at least because these events while rare are ...

why have you accepted the price-predictability assumption?

Trades are only profitable if you close them in profit. Problem with trading without stop-loss is that you might never get to the point where these trades can be closed for profit. Not saying it can't be done, but mathematically it's a given that so ...

Trading Without a StopLoss

I want to add to this by saying that most low RR methods are just harder to trade because when the inevitable losing streak comes the psychological damage is huge as you see large chunks being taken out from your account continuously.

Do you believe this market is random?

Hmm... The equity curve is not serially correlated, it is the error terms in the equity curve that are serially correlated. E(Trade) = expected value of each trade which is definitely less than the size of your wins... Hence the error terms will be ...

concurrent uncorrelated positions

Hmm... from the formula you used, this looks like a deterministic trend with a stochastic positive error component. Xt = t + e i.e.memoryless property. Random walk with drift is more like Xt = a + Xt-1 + e i.e. shocks persist infinitely... see ...

why have you accepted the price-predictability assumption?