A trading grouping is merely an move to organizing facts and understanding relationships most markets. Presumably, the intent behind a trading grouping is to come at a series of steps which, generally translated, termination in expectations supported on if-then scenarios. It is presumed that by mass the procedures and rules of a trading grouping which has been effectively back-tested, the dealer will, forward amend adherence to the rules, display juicy results. At the rattling least, it is hoped that the dealer module stand a better quantity of profiting finished the ingest of a trading grouping than finished the ingest of no system.
I hit serious doubts most both assumptions. Here's why. A trading grouping is developed by imposing a hypothetical and staged support upon a ordered of accumulation which has a goodish turn of built-in haphazard behavior. The instruction of trading grouping utilization consists of effort and error until an effective combination of mart indicators has been ascertained. These indicators, frequently combined with principles of venture management, purportedly indicate what would hit happened historically had they been applied to the particular mart or markets. In the vast eld of cases, the trading grouping themselves do not expose some underlying truths or realities most the markets but kinda expose that a superficially imposed ordered of rules crapper termination in acceptable results provided the digit essential elements of all trading are contained within that system. And these digit elements are the regulating of losses and the process of profits. In other words, comprehensive grouping investigating reveals that the vast eld of trading systems display results which are faithful 50 proportionality of the instance or less. Trading systems which are correct 60 to 75 proportionality of the instance are evenhandedly rare, and those which are correct 70 proportionality of the instance or more are extremely thin (assuming a reasonably super accumulation sample). The lengthier the historical test, the less faithful the results. Statistically, this is called regression to the mean. Putting it in stark old-fashioned English, most trading systems don't work. And again, in stark old-fashioned English, trading systems which hit the principles of venture direction built into them process the ratio of success dramatically. The haphazard achievement concept as planned by Malkiel in his artist aggregation A Random Walk
Down Wall Street (Norton, New York, 1973) poses a specially influential discussion in contestant to grouping development. Malkiel's treatise is that the vast eld of mart activity is random, and hence, attempts to prognosticate prices are essentially useless and moreover unprofitable. Although I don't fully concord with everything Malkiel has said in his artist book, I do conceive that he has prefabricated whatever beatific points. I hit long felt that traders who crapper consistently study a rational, unoptimized method of trading and who can, at the aforementioned time, state demanding principles of venture direction can, at the aforementioned time, state demanding principles of venture direction crapper attain juicy results, mayhap coequal to or greater than the results which haw be achieved by rigid trading grouping followers. The gist of some trading grouping is not the grouping itself but kinda its move to venture direction and the power of the dealer implementing that system.
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Posting oleh Budi santoso ke forex trading system tools pada 8/25/2009 10:00:00 PM
