[mea]

Please refer to answers section.

QUOTE=TRex;18596]There is one flaw in the trade like a casino theory.

Casinos have a build in mathetical edge--a pure irrefutable, statistical advantage over the player on EVERY decision.

Answer: Correct, and so can trading.

The very best professional traders can profit on 80% of their trades, but those trades or setups if you will, can fail at any time and cease to perform as they did in the past due to an adjustement in market behavior.

Answer: Correct, and the "edge" or advantage a trader can have is knowing a particular strategy will not be correct in the changing "market behavior" which was proved by science and capitalize on it by utilizing a correct strategy for the market conditions at hand.

just witness the increase in volitity in August.

Answer: Which means, different market conditions require various strategies which have to be matched to the market conditions.

The market annihilated the pivot and S/R traders as no levels were respected by the market.

Answer: Which is a sign of changing market conditions and you better have a successful strategy for it or stay on the side lines.


Regardless if one is a quant or discretionary trader, the "science" failed.

Answer: No, the science was applied incorrectly. Meaning, the person who analyzed the market conditions correctly and applied a correct strategy for said market conditions wins, and the person who failed to analyze correctly lost.

Why, because it really wasn't science in the first place. It may have been high probability trading, but it is not and never will be an edge like a casino.

Answer: Science has proven it can be exactly like a casino analogy, if the science is applied correctly. Just as casinos pay out a small portion of there winnings to the public. So can a trader, hedge fund, investment bank, mutual fund etc. win most of the time and give back very little to the market. Again, if the science is applied correctly.

So, the casinos don't have this issue. Their "market conditions" never change and the odds on their games remain constant on EVERY single roll of the dice, spin of the wheel, or turn of the cards

Answer: Correct. And, the secret to trading by science is the ability to recognize the changing market conditions and apply the correct strategy for it

My posting to you is not to argue or offend you. Rather, quite the opposite. Meaning, to have you as well as all others reading this think "outside the box" and possibly add to your trading arsenal.

Also, I have reviewed your site and was able to determine some of your methods, which are valid and I wish you the best in your endeavor.


Mark

mea, with all due respect to say "the secret to trading by science is the ability to recognize the changing market conditions and apply the correct strategy for it" is a contradiction in terms. I realize we're having an academic discussion, so no harm done.

The trading you're referring to would be better called theory, rather than fact, of science. Casinos operate on the mathametical laws which don't change regardless what the player is doing. Their environment doesn't have changing market conditions; and even if it did, any change in the games would still have a built in edge for the casino. The player would be hopeless to win unless by a stroke of luck.

Trading will never be a science as long as the market conditions change and traders have to continually adjust to find an edge. What works today can fail tomorrow and so on and so forth.

P.s. Thanks for the kind words about The TradingZoo Website.

[feb2865]

"the secret to trading by science is the ability to recognize the changing market conditions and apply the correct strategy for it"

It sounds discretionary to me

Listen folks, this topic is very much like the never-ending story about scaling out, stop-loss, indicators, etc. It becomes a soap opera after a while. Lucky for us, this forum is a well-organized one and traders do respect each to the max.

First you need to have a clear definition of what is science - and what is art trading wise. When I started I was sure I had this defined real good. As I mentioned in my earliest post, market proved me wrong.

If you have a system/strategy that works and adapts to this ever-changing environment, congratulations. If is an art or is a science - who cares??

does it makes you money consistently?

I learned that trading becomes very much like a fingerprint for every trader. I have a friend who utilizes MACD and price and it works pretty good for him. I tried once and got screwed up.

Everything lies in the eyes of the beholder.

I have an open mind about everything. You have a bot that spits dollar bills everytime the market opens, I am willing to try (paper trade of course) I have never make any indicator work in live trading. But that's me, doesn't mean traders outhere are not making money off indicators.

Whatever system you use, mechanical, science, art, etc. Please bear in mind that all of them has it's limitations. Learn when your system is telling the truth and when is giving you a wrong signal.

In all markets, at all time frames, there will be periods of accumulation and distribution. On whatever your use art/science/astrology/tea leaves etc. would be nice to train your system to spot these periods so you can act accordingly when the market distributes. At least this is how I trade.

Systems/strategies...art or science...are just road maps. You still need to drive the car.

[Dogpile]

<<"the secret to trading by science is the ability to recognize the changing market conditions and apply the correct strategy for it" is a contradiction in terms. >>

no, I don't think it is a contradiction -- it is just differences in timeframe.

Art Collins book goes into this. I am not a great programmer by any means but I can easily write a 'switch' into my program that turns on if one environment exists and turns off if another environment exists. the example Art gives is a switch that turns on in anticipation of a momentum move. his system recognizes this to be occuring if you close near the closing high of a 20-day range and the last 5-day high to low range is twice the size of the previous 20-day range. then use a buy-stop at the opening price + X # of pts.

just an example of how a mechanical trader can recognize changing conditions in market behavior.

[mea]

Dogpile,

Thank you for your example and all your help throughout this discussion. I hope someday, I can do the same in return.

Mark

[Reaver]

Originally Posted by feb2865 »

"the secret to trading by science is the ability to recognize the changing market conditions and apply the correct strategy for it"

It sounds discretionary to me

Listen folks, this topic is very much like the never-ending story about scaling out, stop-loss, indicators, etc. It becomes a soap opera after a while. Lucky for us, this forum is a well-organized one and traders do respect each to the max.

First you need to have a clear definition of what is science - and what is art trading wise. When I started I was sure I had this defined real good. As I mentioned in my earliest post, market proved me wrong.

If you have a system/strategy that works and adapts to this ever-changing environment, congratulations. If is an art or is a science - who cares??

does it makes you money consistently?

I learned that trading becomes very much like a fingerprint for every trader. I have a friend who utilizes MACD and price and it works pretty good for him. I tried once and got screwed up.

Everything lies in the eyes of the beholder.

I have an open mind about everything. You have a bot that spits dollar bills everytime the market opens, I am willing to try (paper trade of course) I have never make any indicator work in live trading. But that's me, doesn't mean traders outhere are not making money off indicators.

Whatever system you use, mechanical, science, art, etc. Please bear in mind that all of them has it's limitations. Learn when your system is telling the truth and when is giving you a wrong signal.

In all markets, at all time frames, there will be periods of accumulation and distribution. On whatever your use art/science/astrology/tea leaves etc. would be nice to train your system to spot these periods so you can act accordingly when the market distributes. At least this is how I trade.

Systems/strategies...art or science...are just road maps. You still need to drive the car.

Very well put. At the end of the day, all that matters is if it makes you money...money in your pocket is not an opinion based situation...it is either a) there or b) not there.

Whether or not what you do is an art or science is really just your opinion one way or another.

I like Auction Market Theory because it is a powerful integration of both, it uses a theory based on scientific evidence, but you must still use your brain to derive your opinion and decide whether or not to back that opinion up with money.

[mister ed]

Some great ideas in this thread - great question to ask if trading is an art or a science. These sorts of "philosophical" questions (as opposed to practical questions- "what value of MA should I use...") can add real value to trading, it forces me to take a step back and think about what I am doing. Of course on many forums such questions quickly degenerate into a war of flames, thankfully not on TL.

My $0.02 is that trading is a craft, or a "trade": sure there are elements of science, many elements of art, but combining the two on a day-to-day basis is practising a craft.