Accuracy Is Not the Goal
A reader wrote here recently hyping another book he was reading:
“…there is a chapter on why trend forecasting beats trend following…He is trying to reduce the lag and retain the benefits of moving averages. So yes he is forecasting, but says his prediction computer program is 70% accurate.”
Accuracy goals are false. Think about it. You can be 70% accurate and make pennies per trade, but on the 30% of your trades that are losers, you can have monster losses. Promoting that you can predict a certain accuracy is a false prophet.
Why does prediction fail?
Ed Seykota (www.seykota.com) stated clearly in a recent update:
“In trading and in life, you cannot act in either the past or future; you can act only in the moment of now.”
