Sunday, July 10, 2011

predicting trading success amidst unpredictablility


"how does one produce
consistent results from an uncertain probabilistic outcome?  

this is another paradox of trading,
random outcome consistent results.  

first you have to believe
in the uncertainty and unpredictability
of the outcome of each individual trade.

second you have to believe
that the outcome over a series of trades
is relatively certain and predictable.  

this degree of certainty is a
function of how good the edge is.  

you must learn and completely accept the fact
that you don’t know what will happen next,
and in fact don’t need to know,
in order to be consistently profitable.

since you don’t have to know the outcome of each trade
you do not place any significance, emotional or otherwise,
on each individual trade."

- trading in the zone
mark douglas

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