"Hope I am in this list of NICE people :-) "
You are my dear....
;-)
L&L,
FF
You are my dear....
;-)
L&L,
FF
www.sme-fx.com
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DislikedThe smart money (SM) loves to play "packman"; they want to "cover as much price range" as possible; because that way they can clear out all STS which are close (remember that if they would not; DM traders could place good RR trades); they also fill any limits that places new DM positions into the market. Of course; as shown SOOO MANY times by now; if the DM positions accumulate on one side (as the DM Longies in GU recently etc.); then the SM Algos conduct a "trend" move against these positions; even over weeks; going for the "main targets"..............Ignored
Edit: and here's my holy grail question..... is there a way to "consistently" use just Volatility (example: ATR, ADR, Open Session Range etc ) to decide which style of strategy to incorporate. Do low volatility suit well for trend following/breakout systems and high volatility systems suit well for reversals ?
Edit1: I am parsing data thru piles of unnecessary shit to find if Volatility has a hidden signature to determine the right type of strategy to trigger during trending and rangy markets. Meaning, at what point Range Expansion "ends" to stop trend following and being mean reversal strategies. This is just impossible and that is why many algos fail imo. Agree?
In a nutshell, trend followers on the DM side are the ones who get whipsawed; who often enter expensively into the market, who even if they catch a "trend" get kicked out early or half-way; and if they are persistent, they are part of the big DM positions eventually piling up on the wrong side of the market. Apart from George using the term "herd mentality" in a different context; yes, one could use that expression I think.
"Would you consider RTM-Reversion to Mean traders (in essence trading bounces, reversals, fakeouts etc) subscribing to "opposite of the herd" who will always win in the long run?"
No. Most of the time, the DM tries to trade "reversals", this by trying to enter "cheaply" into the market. They do theoretical calculations such as "if I enter now against the trend; I will make x pips out of this inner range move". However, in most cases, they just fuel the market move against the "reversal setup"; seeing the highs and lows getting cleaned again and again.
If you look back at all the screenshots in this thread; you can see how this is the most common scenari
"Do you feel DFM has a smaller "risk-adjusted return" profile compared to RTM?"
DFM =?
RTM = ?
"Which style is better to produce consistent daily income ?"
It is always harder to trade reversals then to trade in the "trend direction"; however, the SM applies particular tricks to "pullbacks"; this by doing grail patterns, by over-shooting, by drawing in fake SR etc.
Looking at my own approaches; my most "consisten" approach is a day trade approach whereby I often trade opposite of the "general move"; but this is just my own trading style. It is possible to develop ANY approach; even reversal ones; as long as one considers the market causality.
!Edit: and here's my holy grail question..... is there a way to "consistently" use just Volatility (example: ATR, ADR, Open Session Range etc ) to decide which style of strategy to incorporate. Do low volatility suit well for trend following/breakout systems and high volatility systems suit well for reversals ?"
Generally speaking, I would not say that this is the general rule. While incorporating VOL in one or another way is helpful; I doubt that one can pick a certain style by considering volatility only.
Stay safe,
FF