Why You Can't Predict Market Direction
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- Опубліковано 20 вер 2024
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In this video, Jason Shapiro emphasizes that trying to predict the financial market is the same as flipping a coin. He argues that thinking you are right on your market prediction means one can foresee market movements that can lead to risky decision-making. He suggests that instead of trying to predict the market, traders should position themselves in ways where potential gains outweigh the losses. The key to achieving this is by going against market consensus, as consensus bets often carry more risks than potential rewards. Jason underscores that profitable trading isn't about being right all the time, but about finding trades with favorable risk-to-reward ratios.
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In trading you don’t need to blindly follow every indicator and/or UA-cam tutorials to be profitable, you get paid for how well you execute an opportunity in the market.
How? I can barely fathom what trading is about, I am six months in and it seems like all I am doing is give away my money. Quite tasking if I must say
Well, I believe consistent repetitive action that is congruent with proper analysis will yield the most desirable outcome in this business. Nothing trumps experience coupled with risk management!
I am lucky enough to have help from Christine M. Mila, a licensed industry pro trader. Her system has been invaluable in identifying profitable opportunities for my portfolio. In the past two years, I’ve achieved tremendous results generating a little over $1.3million from the exchange market.
Yeah, it’s actually not impossible to predict the market. It just takes a near-obsession and constantly watching the market to do so successfully, something that most people aren’t interested in not to mention all the time that these experts have spent in previous years to gain practice and experience. Pro guidance may be the only recourse after all!
I feel ya mate!
This ring true...
The best we can do is
1. Define the Probability
2. Define the Reward to Risk
3. Define the Exposure, Bet Size.
Whether we lose or win a bet is outside our control.
The goal of a trader is to capture a positive expectancy.
The best way to capture a positive expectancy is to calculate your strategy in an abitrage formation. And not in backtesting or forwardtesting.
Saying this again, Jason is one of the best and open traders out there genuinely interested to teach us about markets. Thanks Jason!
It's noteworthy when a wizard like Jason who has managed millions and beat the market consistently tells predicting market is futile. Thanks Jason for enlightening us!
lots of wisdom here everyone needs to listen closely to Jason
Thank you for the great content! Your Forward Guidance episode brought me to the channel, but also helped me abandon the idea of being smart/right, and really have an honest look at what’s most important for success in the market over time
Looking at how consistent your losses are in the last video was a huge awakening. We all know to protect our downside etc. But seeing that in an excel sheet right in front of me like that was a slap in the face, a wake up call. Therein lies the answer to consistent growth. The real answer. Thanks 4 that nugget. It was invaluable to see.
Excellent video. Thank you 🙏
Amazing way to break down asymmetrical betting, thank you for all of you content and efforts Jason 🙏
it is so simple yet so hard. ive been trading 6 years and just got the "AHA" thought about Jason says in the video. Losing for years, and the reality is price movement is random. fundamental/technical is just a hedge & probability. Money management is a key, but understanding the basic principle that price movement is random and we dont know anything about future is most basic all new trader out there to truly understand.
it''s rare to see an honest person in finance. so sweet indeed.☺️
Great video man! The problem with human psychology are those pesky little biases that go undetected and are exacerbated by random favorable outcomes. It's all too easy to be convinced by some indicator, but the truth is that EVERY indicator you could possibly think of works SOME of the time, but NONE of them work ALL of the time. Risk management, both upside and downside, is key.
Love your work. Possible to understand how you put together (calculate) "COT Index"? Is there a mathematical formula behind it. Thanks
It is random but sometimes predictable, if you study trends most days the same happens at a similar time, not always but sometimes
Glad I listened to David Hunter
You can't beat being rational and it's great to hear it from someone who will of forgot more than i will ever know, thanks.
Another great video. I really enjoy your practical advice. It’s so simple it’s profound! :)
Thanks for pointing out reality
0:25 2:43 3:19 5:15
Great content 👍👍👍
Great video.. 🍺🍺
Stock market had a news failure with NFP on 7/7/23. Are speculators long enough for you to get short?
I'm wondering the same. Also expectations for future rate increases went up and the USD was down.
BINGO !! ... spot on the target ... thank you
Great trader knows the truth of themarket. Thanks.
believe me for understanding what Jason says you must be pro trader with experience unless nob trader even don't understand this 8 minute ultra market psychology video
Mr. Shapiro, the market is not random. Randomness pertains to human thinking (flip the coin). You are unable to predict price movements because the mechanics behind those movements are still unclear to you. Greetings from @ETGFinance
This is why I love selling to open put options. Just wait for the stock to drop and in the meantime direction doesnt matter
Shapiro is a king!!
Hi Jason, i dont know why but at times your accent resembles alot with Mr Heath Ledger who act as joker in movie The Dark Knight.
Does the Heisenberg's Uncertainty Principle make all attempts to make forecast models meaningless?
No, Heisenberg's Uncertainty Principle does not render all attempts to make forecast models meaningless. While the principle introduces inherent uncertainties in certain pairs of physical properties, it does not invalidate the predictability or usefulness of quantum mechanics at the macroscopic level or in specific contexts.
Forecast models are built on statistical methods and probabilistic approaches, which are well-suited to handle the inherent uncertainties of quantum systems. These models rely on gathering and analyzing data from repeated measurements and observations to make predictions about the behavior of systems.
The Uncertainty Principle sets limits on the simultaneous determination of certain conjugate variables, such as position and momentum, or energy and time. It implies that the more precisely one variable is known, the less precisely the conjugate variable can be determined. However, this does not imply complete unpredictability or render forecast models meaningless.
In practice, forecast models take into account the probabilistic nature of quantum mechanics and work within the bounds of the Uncertainty Principle. They make use of statistical distributions, quantum probabilities, and other mathematical techniques to provide predictions that are consistent with the principles of quantum mechanics.
Moreover, it is important to note that the Uncertainty Principle primarily applies to microscopic systems and phenomena at the quantum level. At larger scales, classical mechanics and statistical approaches prevail, allowing for highly accurate predictions and forecasts in many practical applications.
Therefore, while the Uncertainty Principle imposes limitations on the simultaneous knowledge of certain variables, it does not render forecast models meaningless. Instead, it motivates the use of statistical methods and probabilistic reasoning to make predictions and estimates within the framework of quantum mechanics.
danke 🙏🏼
But how do you figure out consensus?
Well said!
Trading since 1982, The market isn’t that random.
Brilliantl video
Earnings season is here again, so the stocks reaction to good or bad earnings + guidance will signal if markets are in a positive feed back or in a negative feed back loop.
thank you
Great video, experience and wisdom. I liken ppl and traders also, like a herd of buffalo being chased by the Indians. One buffalo goes over the cliff the rest follow it to their deaths, be that one buffalo that does not follow the herd and live.
I want to be a full time trader like you’re Sir. Can’t quit my job yet, not enough saving or trading capital, one day hopefully, I have the passion for trading.
Fuck. I wish I could flip a coin with that confidence! haha
How do you judge what the mass consensus is?
He uses COT data, he has loads of videos on that subject on this channel
I agree with forgetting about trying to predict the future, crystal ball style. But sometimes though, wouldn't it be better to follow the consensus, with your finger on the trigger? For example, it would have been better to follow the AI hype over the past few months rather than to fade it. As long as one is able to take profits before the consensus is shown to be wrong and the bubble bursts.
I think this idea falls into the trend following camp. I think Jason is a pivot trader, and I think Jason sells into trend following when they start to pick up momentum. But, maybe I am lost. ~shrug
@@quantum7401 True, maybe it's just which half you are trying to do. I tried to go the pivot style as well on AI but it's been rough so far lol and thought after maybe just following the trend might have been better there.
@@samthedoor I think it's good to understand multiple styles of trading, that way you can change with the markets. Momentum trades, trend following, contrarian, arbitraging. This is a necessity when you trade one instrument. But one can also use one method and move instruments instead.
@@quantum7401 Absolutely, the more tools in the tool box and familiar situations to archive in your memory will contribute to your skills.
Mark Douglas
👏👏
My trading philosophy: 1) Be humble, 2) Do not risk more than 0.2% of your account size on any single trade, 3) Trade in real companies.
Haahahhahah most robinhood clients have less than $5000 in their account. 0.2% is what???? $10???
Maybe percentages like a 4% draw-down would be more manageable.
Wooo-hooo! 1st!
How many UA-camrs scared their listeners out of the market this year? The only chance they had to stay ahead of inflation.
One thing for sure is that I’m allowed 6k per year on my IRA so make sure you take advantage especially if your under 40 years old- accumulate!
pair of twos