SIUYA

Hello forexpipcatcher, welcome to TL with this statement i assume you think the market is random, and hence I would like to ask - why trade? If its random you cannot outperform the passive returns a market will give you over the long term..... As for the linked thread, this just shows that some people will outperform a market even if their trades are random, while there is still a fair percentage that will actually make money, but the trade off boils down to passive v active trading/management. I got the impression from your answer that for you the answer is about consistency despite the fact/evidence/probability that there will be some people who make money regardless of who they do it.

it does if you read the fine print from 1a2b3cppp when he states above..... Entries and exits are discussed in this post: http://www.traderslaboratory.com/for...tml#post178883 'Step 3-x: Continue to buy more SPY when it continues to go against you. Again, you can use Fibonaccis, or you can divide its current price into increments (such as if SPY is at $140 and you buy every time it drops $10), or into percentages (such as if you buy every time it drops a certain percentage), etc. Remember that each add is going to be bigger than the previous. This is averaging down. Remember that you are not using margin. Begin your first add with a small enough size that you can continue to buy more as it goes against you .......i think many who have been there also recognise the problems, and if you survive long enough to fight again choose not to repeat it. Scaling in an out is not for every strategy or person and not recommended all the time, but as you say so long as the risk rewards are fully understood.... Personally I try never to touch this sort of thing with a barge pole based on a random entry method, and new traders would be advised to tread very carefully.

so we are back to the price is random stuff --- fine... Here are two trade scenarios in no particular order, and both are equally likely to happen as its random, there is no prediction etc etc........ Scenario A: buy at 1, buy at 2, buy at 3 - average entry price 2 Scenario B buy at 1, buy at 2, buy at 3 - average entry price 2 which scenario would you rather be in? Scenario A: where price is at 3, the last trade entry, OR Scenario B: where price is at 1, the last trade entry If you choose B then you either dont think markets are random or are an idiot and would prefer to have losses in an account. (As market price is at 1, average price is at 2) v profits in an account (As market price is at 3, average price is at 2) ............. Also dont forget - in scenario A, you have been proven right twice already, and in scenario B proven wrong twice already - maybe you might try and justify that the market is really random and hence i am due to be wrong on my next pick..... In which case the logic is still flawed. If the market is random, and your picks are random then the last entry is still 50-50 likely to be right or wrong as its independent.....in which case there are a number of possibilities....and I am giving them equal % moves to be fair for comparison Scenario A: you are wrong price retraces 50% from 3 down to 2 - you are at break even Scenario A: you are right, price rises by 100% from 3 to 6. - happy days Scenario B: you are wrong again price retraces 50% from 1 down to .50 - ouch Scenario B: you are right, price rises by 100% from 1 to 2. - you are at break even If you change the right from wrong because you think you are due to reverse your last two results....such that you should revert back to some random average of rights and wrongs - scenario A, you are due to be wrong......worst case is break even after a 50% pullback scenario B, you are due to be right......best case is break even after a 100% rally ....................... Not trying to convince anyone of anything but thats how my mind works.... Which is why you need more than just a strategy of adding to losses which does not make sense. Apart from cross the fingers.... I also think testing will show you what an optimal number of additions may be, when to not add, when to ideally take profits etc.....otherwise crossing the fingers works. I know which scenario i would rather be in when it comes to the finger crossing strategy. yes clearly there are other issues of dividends etc. but this is not then random - this is based on other valuation decision making rationale. thanks for the entries link - one key issue you make there which i think you might do well to really highlight is the very small trade size at the start of the process and the increasingly larger bet sizes you require as the price goes against you. Plus its not much of a discussion - what do you do when you mange to by pure luck or skill pick the bottom and enter with your smallest position possible....... ............... I also checked the web (amazing what a quick google can reveal) I found this as one of the first points... on ET Posted by 1a2b3cppp on 01-24-09 11:43 PM: it's annoying. I usually trade 1 contract but sometimes I'll increase a bit. ............But it does not matter. These things are irrelevant and be taken out of context with a poorly worded and half assed strategy IMHO..... The method has some merits, but random its not - 50% retracements I love as a structure....but thats nothing to do with being random. You introduce the whole subjective element of which re tracement you are trading, if you go long or short etc etc..... ..............for those of you new to it willing to give it a go - be aware there are a lot more subjective, psychological and money management issues here and dont be fooled by the randomness BS.

this says it all - you forgot about the part regarding winning and making money without crossing the fingers........ adding winners in no way is counterproductive to this - its all about having the largest position possible with the smallest risk for the maximum possible gain. Good luck to your methods and to those who follow it, there will be plenty who try and fail. I will prefer to stick to the idea that 'losers average losers' (and this does not necessarily have a lot to do with why 95% fail - as i would think most of those dont average either way consistently - they probably only average losers occasionally out of desperation) There is a lot to be said just for going all in. could you please direct to those entry and exits - i missed it - unless of course it is simply a matter of random entries and exits and an crossing the fingers then there is not much more to say....thanks.

For those interested there is some good theory from William Feller - Wikiquote Its all mind fodder and as probability is all about possibilities and probability maybe most debates will never be solved..... this might be particularly interesting given all the random talk.... "It should be noted that this duration is considerably longer than we naively expect. If two players with 500 dollars each toss a coin until one is ruined, the average duration of the game is 250,000 trials. If a gambler has only one dollar and his adversary has 1000, the average duration is 1000 trials. Chapter XIV, Random Walk And Ruin Problems, p. 349" ....... Blue - yep i often need a coffee before reality kicks in too Thats what makes a good discussion - often what we think seems reasonable until compared to reality, or even better sometimes we accept reality in one form until we see it in a different way. Maybe some one will one day develop a perfect pricing mechanism. Its an interesting thing particularly when it comes to gambling, rational thought etc and pricing. You could guarantee even with a purely random market there would be people who would bet against the odds - and in walks lady luck.

dont worry 1a2b3cppp - what ever works for you...... The problem for me is while you have a lot of 'what if, what if, what if,' when it comes from building a position of strength, you ignore these when using your method from building a larger position from a position of weakness with losses. You could easily rephrase everything you have said in your blog such as 'what if it does not keep going up?" with such phrases as "what if it does not reverse?" or "what if it does keep going up?" etc; etc...... or this "Adding to winning trades is only profitable if price keeps going in your direction, and a small movement against you can turn your winner into a loser."........but you would rather accept the exact opposite and ride losses and actually magnify losses if you dont get the right entries and exits. So far you have not explained this yet - maybe you should shed some light on this aspect of it.....??? When you say.... "I expect to get criticism for it, though, since it's basically the opposite of every trading "rule" out there." ..... there is generally a reason for these trading rules....trading being the operative word. This looks more like it follows the passive investment strategy rules such as.... "Its not timing of the markets, but time in the markets that is important" "What does down must go up" "Its ok if you dont crystallise the loss" "buy when everyone else is selling" This is not a trading strategy for me in any sense of understanding for me (which is why it appears to break a lot of trading rules - and yes everyones definition of trading or investment is different). This is a position taking strategy and you are buying and selling around a position, getting in and out, profit taking little bit when you can and building a position over time ---- but in the hope of what because you will take it off at the slightest gain it seems..... Personally i would view this as a simplistic passive investment asset allocation strategy generally pushed by investment advisers. If it can be applied in a manner that outperforms the selected instruments it invests in with a better risk reward profile then yes it certainly has merits. Here then lies another the issue i would have with such a strategy as a trading strategy - it cannot really be leveraged as a trading strategy - hence its very limiting, and it shows its real risks. Not that i am saying leverage is the be all and end all of things, and generally i think many people actually over leveraged themselves - but if something is not able to be leveraged it is really limited as strategy because its real risks and flaws are so easily highlighted and shown up. It requires a large account, the right instruments and a long enough time frame.....and in the end of the day a stop watch is right at least twice a day, and everything ends at zero..... I would still like to see more info on your entries and exits. This strategy will still only work with reasonable levels, or can fail miserably - there is that fine line between clever and stupid, and if it works for you maybe you have a skill that is not being recognised....

rephrasing this.... Because adding to winners raises your average cost and a continual movement for you can turn it into a massive win. Since I have no idea where price is going to go, I don't know if it's going to make a small move against me and turn my potential large winner into a small loss. Adding to winners only works if you know price is going to trend in a certain direction for a while, and if you know that's going to happen, it would be better to take a very large initial position instead, except its called money management building from a position of strength. OR rephrasing this... "adding to losers raises your total loss and a small movement against you can turn it into a bigger loss. Since I have no idea where price is going to go, I don't know if it's going to make a small move against me and turn my losing trades into a bigger loss. Adding to looser only works if you know price is going to reverse in a certain direction for a while, and if you know that's going to happen, it would be better to take a very large initial position instead" ............you can rephrase this as much as you like. When do you exit and enter is still the important part, because you can still get this horribly wrong. One comes from a position of being able to turn a series of small bets into a large winner, the other from a position of turning a series of small bets into a large looser, or a small win. Same old thing......you are saying you cant predict, but then are expecting something to happen. A reversal - and a reversal that is good enough that your entries and exit will be justified. (and hence why they are still so important) The strategy has some merits - no denying that - but also some massive flaws..... but if if you cannot predict the market and go for random entires - your mentality is that it is better to be loosing than winning......i guess that works for some. ............... Blue - dying by a 1000 cuts happens because you have not done some testing, or shown some apptitude for a talent to time things well means you die before you even did your first trade. The exact same thing can occur here except its more likely that you trip one time in front of the steamroller picking up pennies. There is some merit in these types of strategies, but it still requires a strategy for obtaining favourable entires and exits, and its a system that still requires a fair amount of prediction and assumption. How different is this to someone trying to wait and trade extreme moves?

Good point, and i think this is why the whole debate about randomness is missunderstood. If everyone thought and knew it was random and the odds easily calculated over the long term.....in which case you are right.....you would only be able to trade against those who are simply gambling as everyone would then have perfect information and know they are gambling, therefore over the long run....blah blah blah..... Basically the pricing mechanism for this should be arbed out if everyone knew and thought it was perfectly random.....so in a perfectly random market would still be incredibly hard to trade as it would simply be luck - that is the whole point of a random market. Even If the odds cannot be calculated over the long term because the randomness is still unable to be accurately measured, captured and traded (by the very nature of the randonmness being unable to be proedicited) In both cases you cant beat the market - therefore you should be a passive investor and not an active one or maybe we could amend the old saying "The Market Can Remain Irrational Longer Than You Can Remain Solvent" by Keynes to --- "the perfectly random will still have some series of long runs more often that you can stay solvent" - which is why even Casinos limit some people and bet sizes.

thoughts..... first - a random number generator in excel is not exactly random. second - a truely random number as seeker says can be worked using a formula for what you expect third - if the markets are really random and you accept that then no strategy will beat the markets therefore you should adopt a passive style of asset allocation. forth - yes - even in a truely random universe there will at some stage be 1 million (1 or 0)( heads or tails) (wins/loss) that would occur - that is the nature of probability - its highly unlikely to occur but it is stil possible. fifth - just cause i like to be filthy with my fifth idea is that if you find yourself in the universe go and get laid because it be fantastic because it the place that really unbeleiveable things happen.

Thanks for contributing to the jerk fest - it seems there is a lot of angry in the water these days. Whats going on? you are meant to be the Dude - a slacker Dude did you read the strategy i am surprised you dont shoot it down? (I agree with you regards the best strategies) .... one of the problems is that this is the exact opposite to the strategy suggested by 1a2b3c - which maybe why some hopped on the case....it has flaws. Every strategy has its pros and cons and as per usual one of the biggest objections or issues surrounding around a lot of these threads is the complete disregard for properly defining or incorrectly labeling issues....setting the paramaters at the start is required, and using spurious evidence to claim something unrelated should be shot down. The whole random non random threads, efficient market stuff is a red herring, and good on 1a2b3c for putting his ideas forward he knows there are things to discuss and not everyone will agree - thats what forums are for....

crazy talk and nothing new - but i am certainly glad my tin foil hat arrived in the mail today, I just could not get the anteneas right on my old home made job. Personally i am more worried about the loss of the bee population and the subsequent rise of flesh eating microbes and the fact that these astro traders are actually already among us - and not newborn as the writer suggests..... I am with Zdo (which sounds creepy if said with a robotic voice)- they are already here......

if you follow this logic - any rules based system that attempts to profit from what appears to be an inefficiency in the markets will be doomed to failure - not really sustainable as a profitable system because - it is discovered by others,or was never really more than a random pattern. In which case - you can either give up on rules based systems....or ....look at different data - look into the dark matter of the markets. (The problem is markets are made up of one thing - price....all the other rationales reasons theories etc is bullocks.) You can only make money out of buying at one price and selling at a higher price. So if you ignore price (even a deep value investor requires the price to be 'good') you are also doomed. All the talk about random markets, and efficient markets stems from (or ultimately revolves around and ends back up at ) the choice between being a passive or an active investor/trader and is about the simple question - can this system after costs etc (and take into account develoment time, maintenance etc) sufficiently outperform the market to be worth while doing it? Possibly why many rules based managers of real money have many systems going, constantly change improve and revolve those systems,,,,, or have a single system that suffers big drawdowns and relies on other forms of diversification. Which is why as small flexible traders the greatest edge we have is the ability to do nothing and wait and not participate in the randomness. Maybe that is the single most important rule - to wait? We also have the ability to pick up the small inefficiencies - the layups (Steve you have so many great 'we in the industry' sayings ) that either the bigger guys help push or create or they cant be bothered about.....for every hard working dilligent trader there are probably 100 passive investors, or mandated investors. These guys are not bothered about some smal ticks or they help create them...being small is an advantage to pick up the crumbs So onesmith - as food for thought....are you a passive or active investor/trader?

yes - I think clmcdougal was only refering to hedging against any stagnation by collecting time decay (theta), or helping to reduce a PL loss due to any decline in the underlying in the single situation of a long only trade.....but it certainly is not a hedge for the underlying move. I think it was a poor choice of word to use, unless he is really under the delusion that it is a real hedge as opposed to a cost reducer. (I dont think he is) All you need to refer to and imprtantly understand when trading options is the put call parity formulas/relationships to understand that buying the underlying and selling/writing a call over it is the same as selling a put. (not taking account tax factors and long term holdings etc.)And if you think selling a put is a risky trade then a covered call is the same trade. Any ways - unless 1a2a3b is using options extensively then this would be for another thread and can be found there. This is on top of the other issues Steve mentions.

I get where you are coming from - and for the sake of it agree - if you cannot predict where it is going to go then it is effectively like flipping a coin to decide. So you may as well treat it as a guess.....but its not random. The whole point of having random v non random discussions is to do with beating the market and active v passive management. As well as the ability to time the market. As you are being active in trying to beat the market then clearly you dont think the market prices are random - it is simply a matter of averaging in with small enough bets and crossing your fingers. OR if you really think the markets are random then all you are doing is the simple advice of many advisors of buying into a market on regular intervals. The key to profitability will still be based on where your entires are, and the edge is partially the patience to wait for pullbacks. If the markets are random your guesses are likely to be useless over the long term.....thats the whole point of claiming something is random. (a quant friend of mine has run tests similar to this and in equities it does work whereby buying crashes and exiting at some predetermined levels makes good money - but its not random and its also very infrequently traded. In fact trading around this is more likely than not to cause the gains to be lost) Using a random generator and saying you cannot trade based on prediction (no one can - they can just anticipate and manage) does not make the market random, not going below zero does not make a market random, or your trades random, or you assuming a market to be non random does not make it so, or having a randomly generated chart look like a real market chart..........randomness is a red herring..... But i guess trading is like that and full of them..... the dangerous thing here is that you are attributing something a name that is irrelevant just because you have no idea by your own admittance. A bit like me saying - I have never met a person from Mars before, but i guess they look like Marshians, so i will say thats what a marshian looks like. For those interested in a similar (but I also think very different method) whereby rather than averaging in losses it runs positions and builds winners. Goggle 'building an equity millipede" there is a lot to read but you can get the jist of it quickly - find a reliable low risk entry, keep letting them run. Build and compound. 1a2a3bccpp.....I will let you get on with your thread and appreciate you dont see this as a rampant attack.

I would trade against you any day if you think writing an option is a good hedge. Depends on what you are hedging against.... the opposite is true - writing options over an underlying is not a great hedge as you only have a hedge for the amount of premium you get...its not really a hedge at all if you think in terms of insurance. Buying the option should at least properly hedge the underlying instrument. If you wish to collect premium by writing options, then you would be hard pressed to call this a hedge. Its more a yield enhancer/average price reducer/ take profit mechanism..... If you think of hedging as an insurance policy, then would you only write a partial hedge to collect premiums over say your own house in case it burns down? Writing options is not a hedge it is an offset....of cost if you own the underlying. Buying options hedges - at a cost of the premium. Once you buy or sell an option over an instument you simply change the risk and reward profile, and so it depends entirely on what you want and as to what you are trying to hedge. Plenty have been blown up because they wrote options thinking they have been hedged. I dont know if this is too off topic and another red herrring...probably is.

No - i see where my poor writing can indicate that( i should have simply said randomness has nothing to do with this....the system is mean reverting and randonmess is not relevant as to if the system will work) as the point is this. Randomness is a red herring in this whole system....(and this shows how the pros and cons and reality of a system can be diverted to some stupid theoretical argument.) The basis of this whole strategy does not rely on the markets being random. It relies on the basis of what goes down should go back up.....there is nothing random about that, and if you are making decisions to go long or short on other factors then these are not random decisions. This is an active v passive management choice and about trying to beat a market by not necessarily timing it. As to another red herring - the accounting. Pure accounting trickery - that is all. Unless you have a hedge in a completely separate instrument for some advantageous reason this is exactly the same as trading the same position in a single instrument but taking profits or losses on it. Don’t be fooled by the accountants – they have already ruined the world for us! Your previous post point this out.....its like the other delusion people seem to have when it comes to say - oh that loss it ok i have not crystalised it and therefore i have not really had a loss.....:doh:

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when you open an account you are usually opening an account that already has margin capabilities. It is not like you have to ask for margin each and every trade. This is simple - ask your broker to explain it to you if they cant or cannot provide you with this choose another broker....if you cannot understand how the system works - then you should not use it.

Ask yourself is gold really going to adjust and revert to an inflation adjusted mean....then ask has it done so in the past. (InflationData: Is gold really a hedge?) When a sales man tells you gold is a great inflation hedge, then they tell you in the next breath that gold should be at $5000 oz because of this, ask them so why has it been such a bad inflation hedge over that time if it is meant to be a great one. Is this a good measure to even define your mean? What time frame are you talking about? Are you using real gold prices to adjust for inflation (adjust furtures prices its different again)....which countries inflation, in USD....if you adjust for people in different countries the results vary. and as DBP says comparing Apple and gold - crazy. It appears you might be looking for a justification for a trade. It does raise an interesting question as well regards support and demand - when people adjust prices areas of support and resistance change.....people dont think and react like this in real life - they think oh i bought it at $400. They dont take into consideration that it was many years ago.....just food for thought.

yes Blue there is definately value in many ideas..... so long as the truth of all the pros and cons associated with those ideas are evaluated. As for an instrument not going to zero - it does not need to go to zero, or does it need to actually rebound at some stage off its low - it needs to be able to rebound sufficiently off the traders average prices of entry to make it worth while.....and to do so sufficiently to make it a better system than simply buying and holding over a long period of time and collecting dividiends, option premium or capital gains and not much else.....all the while ensuring the trader does not do the same as in other systems - ie meddle. Is the system robust, replicable by anyone and have better than alternative risk reward returns (more from a funds pov than a 2:1 type of analysis) or even buy and hold - which by the way as a system with a few modifications also works in some markets. DBP - the due dilligence on TL members is that a requirement??? seems scarier than BB watching.....wouldnt the best due dilligence of ideas be to be 'found out' on multiple forums.....unless there are ulterior motives....and in this anonymous world....surely most personalities can be easily reinvented......plus we cant forget that there are always people wanting to be departed from their money.

ET phone home - never heard of it. is that where we would find... 1a2b3c..... "This system can be backtested, and I've been posting 100% of my trades with live calls for years (something other people who share systems never do)." if this has all been said and done before elsewhere are we just going to be mean reverting? or is it all just random in which case who cares? and why move to TL - is it because we are such noooice people.

Re mean reversion and random - exactly my point - the system is mean reverting and hence not random - and also has other limitations based on various intrument criteria...thats why i dont think there is a lot of randomness about the system. It seems simply based on what goes down usually goes back up. The entires, exits and direction of trade are not random, nor is there any real relevat debate about if the data is random...thats all. Re Backtesting - yes. same old story if you can hang onto a lot of different things, or diversify enough. That is why i am interested in the criteria for when something is considered a bad trade. What happens if you buy at the wrong levels and get stuck never exiting as it never retraces enough. same old story.... ed_ina cloud says it all...." If I’d stayed with it then it would have come back." - hindsight and stupity are wonderful things. This also goes to the idea of the edge - if the edge is discipline, and patience they then require discretion, and there are biases and context. So unless you have hard and fast rules and dont apply extra discretion each back test will be different. Different strategy same problems even if we can appreciate the point 122b....is trying to make re gurus and others.

I thought this might be an interesting place to stick this.... This is an exert from an interview regards violence and athesism/relgion (Dont get caught up in the religion debate - focus half way down when the question about Yanagi Ryuken comes up) What Martial Arts Have to Do With Atheism - Graeme Wood - The Atlantic Also covered here... http://www.samharris.org/blog/item/the-pleasures-of-drowning I found the part about delusions interesting and thought it could be well applied to trading. (for those interested check out Yanagi Ryuken and the no touch knockout....as this is a bit off topic for this thread but got me thinking about it) Basically - its amazing what we can beleive in when we want. How then can this be positively applied to trading....or is this part of the problem tool box?

1a2b3cppp - thanks for sharing your method. Its nothing new, but that is fine, not much is, funds and investors have been doing this for years. There are income and option fund strategies that are very similar over baskets of dividend paying stocks. Usually they stick to equities only due to restrictive mandates. To me its simple mean reversion trading without using a lot of leverage (you say margin, but if you are using a 2x instrument then its leverage no matter how its described or accounted for) and building a position as opposed to putting it all on at once. Some may call it investing, lets keep calling it trading. (I also think you have given it a poor heading – the way you trade appears to assume the market is not random and will mean revert – maybe the thread heading is not appropriate. I guess as the thread develops more will be revealed as to where randomness comes into it. The adding to losers but not winners reveals you don’t think the markets are random. ) I also think you point out the obvious advantages you have – your edge (but many others wont have) in trading this method - patience, a large account, and an ability to sit through large drawdowns. Most cant do that and it also means that your system really cant be backtested as it involves a lot of discretionary traits. Picking the right instrument, stock indexes are generally mean reverting and made up only of survivors.(lets say you had been shorting gold, or buying the Japan indexes over the years, or selling oil when it went from 20 to 120, then 120 to 30 with the issues of backwardation/contango etc), I will be interested to see how you determine you are wrong and exit the trade. yadda yadda.....this is not meant to be an attack. As for fib, MA s or any thing similar – agree - there is nothing magical about them, but they provide a framework for patience rather than punting IMHO, and if you find that one pullback level has a greater measure of success over another then all the better for using it. ......as an aside - when you say everything else is crap or does not work for you, i hope you also realise that this too has its downsides and will not work for many people except through dumb luck. You do realise that most people, even those who have never read an investing or trading book do the opposite even when they are trying to do what you say anyways....its human nature.....so this like any method may work for some people, but for most my guess is they will fail even if it works for some others. It certainly does not have an edge apart from those that you list, and these are personal and not able to be replicated by everyone. So when you criticize others for not backtesting it is too easy to say something is crap but then fail similar methods yourself, even though you admit its not for everyone. Point being – this system falls into the same criticisms you level at other systems, so most of what you say maybe be equally regarded as ‘nonsense’ by some. Every system has holes and just because others may or may not be doing it means nadda despite protestations or encouragements. Looking forward to more thoughts…..

Hi 1a2b3cppp, a couple of questions...(these are rough quick and dirty please take them as such.....) You make the distinction that so long as you cannot predict you will treat the market as random and adopt your methods to represent this. No problems - what methods are you thinking of applying? There are many who still beleive that random entries with good money management can still be profitable....i was wondering what additional methods you might adopt? Also re randomly generated data - IMHO this is good for testing a fully automated system on. Period. The reason being that real market data is not randomly generated, and the whole random data debate, and random market walks and efficient market theory is a seperate debate. While these things are related, they are also red herrings in many debates. No one can predict the future, so you are not alone in that....all we can do is anticipate what if scenarios and react - even if this means you treat the market walk as random and assume money management ideas, and other methods that over the long run make money - otherwise all you will be doing is proving yourself right and in which case you probably should give up now and invest in the indexes. You talk about people having a trading method that works, and that they follow..... and that people fail not because they dont follow the rules but because their method is designed to fail.....well duh! I tried for years to get those square tyres on the car to work but to no avail......stupid me. Just like I cant live underwater- insanity for trying to make something that is proven not to work work through pure persistance has nothing to do with randomness. regards gurus - this has also been done add infinitum and people dont really need to go much beyond understanding the basics of things to look out for and then making a value assesment as to weather a guru can help them or they are wasting hard earned cash because they have other issues like being undercapitalised etc......again - nothing to do with randomness. Regards back testing and gurus - i assume that you can back test and show your models work, and that while there are inherent pros and cons in every system these are explainable and people can choose to accept or reject the consequences. Any system using discretion really cannot be reliably back tested, and at best an audited track record is the best one can hope for..... So geting back to your original post.... "I just said that price is random to me, and that thinking about it as such changed the way I trade." Maybe the responses to you were a little premature, or maybe the offer to reveal your profitable secrets at a future date have been heard before, i was wondering if you could expand on this in regards your method when you say "Directional trading is prediction. If you don't think price is going up, why take a long position? " (I generally assume every position is directional even spread trading, except maybe pure arbitrage, ) thanks.