False signals and valid

Beginner Questions Trading Psychology
1

I asked for some motivation from you guys in the last post. Thank you to everyone who assists me.
So let’s return to the main topic of trading by creating the following:
How do you distinguish between false signals and valid trading opportunities?

2

I wonder if trying to find a way to identify false signals is worth it. Have you heard the expression, a wild goose chase?

2 Likes
3

Identifying false signals in trading can be challenging.

4

You’re not going to know it was a false signal until the trade fails. Even then, as long as you’re following your strategy, then can you really consider them false signals?

5

I agree with @MattyMoney, loss transaction is not the same as bad transaction. You can use filters to minimize false signals, but you will not delete them all. There is also a catch, many filters can overfit your strategy, so you have to use it wise.

7

move on buddy. if you start again and earn money it will motivates you again. think about profits.
It might be difficult to distinguish between genuine and deceptive signals when trading. It frequently calls for expertise, analysis, and knowledge of the market dynamics.

9

Sometimes market forecast is accurate but due to sudden financial change, the market goes astray. It’s up to market actually.

1 Like
11

i don’t

if a signal is part of a method proven to have a robust edge, then it’s a valid trading opportunity whether it goes on to become a winner or a loser

there’s no such thing as a “false signal”: only signals that turn out to be losing trades (but this doesn’t invalidate them at the time)

2 Likes
14

Money is honey. Of course it motivates every person.
I did some trades since then and im satisfied now. :slight_smile: thanks maya

15

Thanks Rosie.
What a great point. well said. I agree.
in every signals we should care much about where market goes.

16

Thanks @flamingoproxy
You always bring up the subject in a way that the other person won’t notice.

17

To distinguish between false and valid signal, you have to follow a signal consistently for some days and if those signals hit SL, that means these signals are false.

18

false or valid signal, there is no guarantee. Money management is what matters

19

Although I am in to finding valid signals, this one takes too m much time. don’t you think so?

20

please share with us your experience about money management.

21

Money management comes with the right risk per trade.
I would start with 1% risk per trade.

Since in general there is no guarantee of a valid signal playing out, you need to treat it as 50%-50%. A slight edge of 10% will make you a profitable system if you have at least a 1 to 1 risk reward.

1 risk to 2 reward will make you very profitable even you have a 50-50% win rate of a signal.