Probabilistic thinking is effective

Probabilistic thinking is effective

Poker is advantageous between players

To adapt to the market

You look at market movements, but you should discard ideas like tops and bottoms

It must be viewed in a poker-like way

In poker, there are no concepts like ranges or tops and bottoms

Only thinking in terms of high or low is desirable

In market terms, whether a trend appears or not, whether you trade contrarian or not—those are the kinds of discussions

If you think about tops and bottoms or ranges, you cannot trade with probabilistic thinking

Roulette and FX: probabilistic thinking; converging win rates and stopping losses is a theoretical fantasy

Both are on par with a matter of mental discipline

Convergence of win rate

A deeply considered system of probabilistic thinking

If such a system can be systematized, it could be replicated

But reproducing it is in human hands, so you realize its futility

Ultimately, there is no secret to winning that can be seen except in hindsight

A single-beat trend-following

Though it's fine to experiment with things like a trend-following pyramid by Dalnbert (Dalambèr),

simply placing a limit will lead to losses

Setting a limit prevents the losses from being offset

Setting a single fixed limit offsets the losses

If you adopt the policy of “Fixed limit: minimum losses,”

then

For example, until the trend moves as expected (assuming 500 pips move)

Loss limit is 20 pips

Assuming you were taking entries in a trend-following fashion

About 20 entries per day (averaging until the trend appears)

About 100 entries per week

Usually once or twice a month such an occurrence happens

400 entries in total

A trend appeared

Because it’s 500 pips

20 entries can succeed (perhaps)

20×5 (number of times winning) = 100

The number of losing times is 500, so -400

In reality, you wouldn’t take that many entries, so even if around 100 you’d be at break-even

Moreover, after moving 500 pips

If you think about the worst-case scenario, a system that ignores the worst-case scenario is the worst system

If you set all-take profits at once, when the trend ends at about 500 pips

If about 10 entries were successful

25＋24＋23＋22＋21＋20＋19＋18＋17＋16

＋200 is a win

From a chart-based perspective, a trading system tends to lose

By building a system based on time units, you can “systematize” it

Trade during a given time window under those conditions and see if you’re winning

If you don’t incorporate this element, you won’t know whether a trend-following pyramid is effective

In order to capture market movements in trading

Ultimately, it becomes a kind of gambling bet

Trends and trend-following

In a range there is some basis for analysis, but

In trends there is little to analyze, so ultimately trading tends to become gambling

The assumption that you will incur losses

If you keep trading in the direction, losses will naturally occur

Of course, as you continue, profits will come

Because you are not aiming to profit

You are trading in the direction of market movement

There is no intrinsic fair price

Because a market that ends up with profit from reverse-trading traders appears, ultimately they lose

As a trending move arises, the price-appropriate high and low cease to function

Even a trendline top/bottom will continue to break; thus there is no fair price

Although you might think that trend-following increases loss frequency

In reality, since you’re entering on a trend-following basis,

by the time you reach the stop loss, you have already opened a hedge and profits have accrued

So the number of losses does not continue to grow

Following the market

Averaging down is a waste of time

If you are following the market, you are pyramid-trading trend-following

There is nothing more useless than a signal

Simply remain silent and follow the market pattern

Without thinking, just silently place stop losses and bet on the market

You may be hedged in early, but do not add more beyond that

The market changes the market by force

Analysis becomes meaningless

Observing the market is fine, but

There is no meaning in the act of analyzing the market

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