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How can something so counter intuitive be random? (I see mattz made this point)
For example, setting a 15 tick stop loss on a particular euro trade, only to have it drop 17. That happened last week and I re-entered at about the same level, for a gain of 35, but had that initial loss to work off.
The best I have come up with to combat this shortcoming (while keeping a pretty tight SL), is to stagger the orders on the total number of contracts committed to, as the chart pattern progresses.
Also, I have more anxiety when establishing / maintaining positions when highly profitable opportunities (bigger price change) are observed, as opposed to smaller scalps, with fixed profit and stop loss targets. Not implying that others, such as Monpere, are missing out with smaller targets: I just don't do that successfully.
Very interesting input on the topic gentleman.
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About HFT - if I understood the topic intimately I probably wouldn't post about it, but found the following interesting:
EuroNext called HFT the primary driver of the markets in a presentation they held abroad (not sure if it was before or after they merged with NYSE).
For stocks I've heard it described as replacing the effects of real market participants by breaking up larger block orders and stretching them closer to the max bid. So not good initially for your entry price, but going forward as you hold the position, other buy orders are stretched.
What I initially thought happened in the flash crash was that the algos were switched from stretching the buys to stretching lows. But ZeroHedge found evidence of quote stuffing.
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Just because there are three possibilities doesn't mean you have 1/3 odds. Isn't that the same logic used to say you have a 50% chance because price goes up or down?
So tell me what are the odds then? If you do not know the outcome, unless you can predict;
I know I can not predict, the only thing I can do is increase the odds in my favor and then I have a better change of succeed.
And there are many ways of doing that, but I am not trying to convince you...
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
However, I would like to say that your theories and concepts might work for you, but words actually have quite specific meaning. People tend to redefine concepts like randomness and probability on the fly, and that makes it impossible to have intelligent discussion -- simply because the words have different meaning to different people. In reality, though, the subjects have solid theoretical underpinnings and should debated on the basis of those. Failure to do so renders message boards useless for meaningful discussions of anything other than vague theories like technical analysis. Not even a discussion of rudimentary probability gained enough traction to warrant further discussion.
It was not a question of doubting your success, it was merely an observation of a logical fallacy based on a traditional understanding of the topic.
