{"product_id":"stcov321beof","title":"Stocks \u0026 Commodities V. 32:1 (10-14): The Benefit Of Hindsight by Ashot Hakobyan","description":"The Benefit Of Hindsight by Ashot Hakobyan\u003cbr\u003e\u003cbr\u003eIt All Makes Sense\u003cbr\u003e\u003cbr\u003eFind out how a hypothetical ideal trader who has the\nbenefit of hindsight can help you make everyday trading\ndecisions.\u003cbr\u003e\u003cbr\u003eAt every stage of each trade, from the initial market scan\nto look for trade opportunities, to the timing and sizing\nof the entries, to the continuous trade management,\nall the way to the final closure, a discretionary trader will be\nmaking decisions continuously. A system trader, on the other\nhand after creating a system will have those decisions\nmade for him automatically.\u003cbr\u003e\u003cbr\u003eDecision-making in discretionary trading often poses complex\nproblems, especially during the initial stages. Thats when\ntraders have to make intelligent choices among the myriad of modern financial markets and instruments and combine them\nin clever and innovative ways to generate profitable trading\nopportunities.\u003cbr\u003e\u003cbr\u003eThe ideal trader\u003cbr\u003e\u003cbr\u003eIt is fair to say, however, that no matter how complex the\nchoices are, discretionary traders will always aim to maximize\nthe expected profit while maintaining sustainable levels\nof risk. These criteria can be quantified using one of the\nfew existing market theories and models. For instance, one\nwidely accepted model that approximates market returns by\nnormal (or log normal) random variables is embedded in the\ncommonly used indicator, Bollinger Bands. Another, more\nadvanced Black-Scholes model resulted in a formula that is\nnow routinely used in option pricing for a wide variety of\nfinancial instruments.\u003cbr\u003e\u003cbr\u003eI will present a somewhat more pragmatic and simpler\nconcept for trading-strategy evaluation without backtesting,\nwhich I call the Ideal Trader. I use the Ideal Trader concept to\nassist in discretionary trading. Of course, the ideas discussed\nhere can be incorporated in any style of trading, including\nsystem trading or statistical trading, since the focus is on\nthe evaluation of trade performance rather than reasons for\ninitiating a trade. But first, I will start with a brief overview\nof the concept before considering any of its applications.\u003cbr\u003e\u003cbr\u003eUnlike real traders, Ideal Trader is a hypothetical trader\nwho is allowed to place his orders at any time in the past. He\ncorrectly places his buy orders at the lows and sell orders at\nthe highs, and in doing so, extracts maximum available profit\nfrom any market.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133983453553,"sku":"V32C01_690HAKO","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_aa8d8c4e-7747-4501-9e88-a9fcd43ba5e9.jpg?v=1739660378","url":"https:\/\/shop.traders.com\/products\/stcov321beof","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}