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What I learned after losing $300,000 trading forex

  • #701
  • Edited 4:37pm Aug 21, 2020 4:16pm | Edited 4:37pm
Quoting rover99x
The debate of market randomness continues...... It's my belief that the market is random, but it's random with occasional Levy Flight! In other words the market moves in a random like fashon for a period of time, then moves in one direction for another period of time. I've come to find than some think that randomness is a series of ups and downs, it's not! Toss a coin 100 times and you'll get a lot of series of heads or tails, in fact as many as eleven at once, series of fives or sixes are quite common. But it doesnt really matter what you believe,...
Beautiful someone finally gets it!!

What Rover said is exactly correct.

So the real question now becomes. How many retail traders know the TIME, PRICE LEVELS, and the DIRECTION of those nonrandom moves?

Looking at the facts it would indicate that only 5 to 10% (profitable traders) are good enough to figure this out on a consistent enough basis to make a living.

However, a statistical approach makes it so you do not have to get the TIME or the PRICE LEVELS correct because we already know the important ones.

You still do however have to get the direction right
  • #702
  • Edited 4:38pm Aug 21, 2020 4:26pm | Edited 4:38pm
Quoting Wavegarrick
{quote} Here is the thing Ceeso, When you started the thread there were high expectations and a lot were expecting a step by step guide into your success. It was not to be and I guess many are disappointed by it, well it turns out that you are not obliged to share any of it. I do not hold any grudges and I am happy at the point I am at. Yes, I can talk about the dopamine rush and addiction you have experienced. It is in all of us and we don't realize it. I never realized it until I saw your post, take away at least. The thread is turning into a...
I have already given away the gold. Some traders will see it research it and eventually use it and others will just argue back and forth.

You will notice I am not arguing with anyone. I am merely giving some guidance and tools that I personally use each day that helped me turn the corner from -300k to now only -65,000.


I am still not a profitable trader and I make no judgment or claim I am just presenting what I can that was helpful to me and maybe helpful to others.


BUT

If I am being completely honest with you there is a motive on my part. I absolutely hate Forex Brokers (especially the B book brokers)and the Fake Gurus and I would love to see these scum of the earth that are keeping people stupid, blind, and chasing lollipops and rainbows be put out of business with educated and informed traders.

I wish I could be more helpful because I know the pain you are all suffering through but clearly my hands are tied and I must respect me mentors wishes.
  • #703
  • Aug 21, 2020 5:39pm Aug 21, 2020 5:39pm
When the number of variables in a problem approaches infinity the word we assign to that condition is "randomness"
  • #704
  • Aug 21, 2020 7:06pm Aug 21, 2020 7:06pm
Quoting eyeball
When the number of variables in a problem approaches infinity the word we assign to that condition is "randomness"
It is only classified as 'random' because we do not have a big enough field of vision or awareness to (pre) recognise an unexpected event.
in reality it comes down to the paradox of chaos and order in all aspects of the universe of which trading signals, triggers and unexpected behavior is only one field ( or window thru which we are currently viewing).
if you can remove yourself from the proximity of an event, expand the vision based on all the visible and invisible (hidden) market factors you can actually learn to recognise the downstream effects of the 'chaos'. "you don't know what you don't know", but you can learn to look into the 'dark spaces' where a vacuum has appeared, - what the market does not tell you is where you should be looking?
to take an example you will all understand :
the effect of D. Trump's tweets and 'chaotic' statements on the markets would be a causative effect i bet very few of you recognised before hand or even while it was happening?
Old Dog Kiwi
  • #705
  • Aug 22, 2020 2:54am Aug 22, 2020 2:54am
Please stop discussing useless things like randomness. You all are ruining great thread with your meaningless posts.
We have a statistics that if price touch 0.25% level there is X% chance to touch 0.5%. And it works. Random, not random... Who cares?
With a global trend filter this % can be increased and become even more accurate.

I have these questions I didn't get any distinctly answers:
1. Why we use 0.25% as a step? Or this is an example and we should use for example atr to calculate it?
2. Does anybody tried to use dynamic zones, depending on atr?
3. Where to exit the trade? Near next zone?
4. Where to place sl?
5. Can anybody share stats for main pairs what is the chance if 0.25 then 0.5, if 0.5 then 0.75 etc?

P.S. if useless post will continue can I kindly ask CeeSo to allow me create another thread to discuss this great approach, but not the problems of the universe? Thanks!
Observer effect
  • #706
  • Aug 22, 2020 5:31am Aug 22, 2020 5:31am
Quoting ryuryu
Where to place sl?
This is imho THE most important question and that's why the bank always win. The SL is the 0 of the Roulette game.

When creating a table "if price touch 0.25% level there is X% chance to touch 0.5%" we need to know what happened before touching the 0.5%.
If we want to use the X% chance in total, then we have to place the SL to the lowest (percentual) value that appeared in our data evaluation.
Then we use this value and calculate the loss for the 100%-X% trades that did not follow the rule.
Over a looooong period I would guess that the balance sheet results to 0, in the best case.
And that is where the banks, insurance companies, brokers etc. have their advantage: calculation power and the best mathematicians to stop you out.
  • #707
  • Aug 22, 2020 6:36am Aug 22, 2020 6:36am
Quoting ursinho4711
{quote} This is imho THE most important question and that's why the bank always win. The SL is the 0 of the Roulette game...
Indeed! That's why I don't use a stop loss stored in the brokers infrastructure. I use a Trade Manager to to pull the emergency parachute if it's time to do so. And I usually trade currencies, not single currencie pairs. An example here:
Inserted Video
  • #708
  • Aug 22, 2020 7:42am Aug 22, 2020 7:42am
that is big amount
  • #709
  • Aug 22, 2020 8:20am Aug 22, 2020 8:20am
Quoting ryuryu
Please stop discussing useless things like randomness. You all are ruining great thread with your meaningless posts. We have a statistics that if price touch 0.25% level there is X% chance to touch 0.5%. And it works. Random, not random... Who cares? With a global trend filter this % can be increased and become even more accurate. I have these questions I didn't get any distinctly answers: 1. Why we use 0.25% as a step? Or this is an example and we should use for example atr to calculate it? 2. Does anybody tried to use dynamic zones, depending...
These are good questions and my advice is to create your own spreadsheets similar to the Frequency Distribution ones I have posted ^^^ . Unfortunately, I am restricted from sharing mine but it really is not that difficult it should be basic excel functions and I already posted a link to where you can get the free historical data.

Once you have that data you can play around with each pair to find the "optimal" percentage changes that each pair exhibits.

For example, The USDJPY may have a greater frequency of .33% to .45%

This thread was mostly about day trading but also, keep in mind that Volatility is an issue so being aware of the large Weekly frequencies are important.



These are the steps to becoming a master of statistical trading. I have presented the basic concept here and now it is up to you guys to do the work and discover what works for you.


For those of you that do not find this endeavor worthy of all the work I will point out one of the richest and most successful Hedge Fund Managers on the planet Jim Simons only uses math and statistics to make billions of dollars https://en.wikipedia.org/wiki/Jim_Si...mathematician)
  • #710
  • Aug 23, 2020 6:04am Aug 23, 2020 6:04am
So, is anyone actually testing this and are there any observations to discuss?

I quickly ran a 3 month manual backtest on US indices and EURUSD.

The two markets produced interesting results. I must state that I don’t trade FX, my view is that it’s a thankless slog for little return.

US indices:
Serves as a good benchmark for momentum following, if you ride the trend above/below 0.25 with a trailing stop, you’ll do well.

EURUSD:
mmm - ranges so much and struggles to break either side of upper/lower 0.25. When it breaks, you’re in a trend of seemingly easy to secure 30-60 pips.

One saving grace is that on ranging days, if you stay within the parameters you’ll mostly be able to BE as worst case scenario. You can also play the SR levels if you choose. I’d avoid this personally and find another trending pair if I was an FX trader.

Thumbs up. Nice tool. Basic principles. I have setup a few alerts on TradingView for when key levels break, so I’ll see if it adds value to my existing algo - cheers.

‘Gold’? Not really unless there’s more to it that I’ve missed. I was looking at it as a mean reversion tool but again unless I’ve missed something it’s not jumping out at me wherein the value lies there.

Jim Simons makes his money by being a crook and front running orders. Again you’re hearing this from someone in banking. Look up their court cases. He’s not the genius the markets make him out to be. Still incredibly smart but the stories of him solving eloquent mathematical equations and being a godlike entity of maths and physics is... bulllshit.

We’d fuck up the markets too if we knew where everyone was positioned and could set our orders ahead of them, and then pay to silence anyone who challenged us.

I suggest everyone looks up the Hound of Hounslow. Smart dude.
  • #711
  • Aug 23, 2020 6:11am Aug 23, 2020 6:11am
I love this thread... money management is the key
  • #712
  • Aug 23, 2020 10:50am Aug 23, 2020 10:50am
Hi,

Coded an indicator for statistics.
Gives percentages between levels.
level 0 = open price.
level 1 = open price + 0.25 percentage of open price
level -1 = open price - 0.25 percentage of open price.
And so on.

You can also select ADR as range.
level 1 = open price + 25.0 percentage of ADR.

Levels are calculated based on H1 bars within a day.
Be aware that many days will also mean many H1 bars. History and no holes needed.
I did not test if not enough bars and or holes, what happens.


Default 100 days, should be ok.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD Ceeso stats.png Size: 52 KB

BR

Attached File(s)
File Type: ex4 iCeeso_stat_V2.01.ex4   30 KB | 694 downloads
It is not important how often you fall down, but how often you get up again
  • #713
  • Aug 23, 2020 11:05am Aug 23, 2020 11:05am
Quoting Neogenesis
So, is anyone actually testing this and are there any observations to discuss? EURUSD: mmm - ranges so much and struggles to break either side of upper/lower 0.25. When it breaks, you’re in a trend of seemingly easy to secure 30-60 pips..
You just described a significant edge!!!

Now an important question is, what percentage days does price simply stay within the 0.25% boundaries? From your observation of "ranges so much and struggles to break ... 0.25", I'll take a guess of at least 80%.

So that means you will not be seeing those breakouts very often.

Also, remember that the basic presentation here is the statistics for the range between the OPEN and the CLOSE of the daily bar without regard for what price does between the open and close. That is an entirely other statistical study that would be fruitful.
To free Gazans of Hamas, use whatever it takes.
  • #714
  • Aug 23, 2020 11:26am Aug 23, 2020 11:26am
Quoting DrDave
{quote} You just described a significant edge!!! Now an important question is, what percentage days does price simply stay within the 0.25% boundaries? From your observation of "ranges so much and struggles to break ... 0.25", I'll take a guess of at least 80%. So that means you will not be seeing those breakouts very often. Also, remember that the basic presentation here is the statistics for the range between the OPEN and the CLOSE of the daily bar without regard for what price does between the open and close. That is an entirely other statistical...
Hi,

If you look to the first two values from 0 --> 1 and from 0 --> -1, the sum of percentages is roughly 86%.
This would mean 14% the price stays within -1 and 1 level.
At higher levels this percentage will be higher, because price will loss volatility and keeps moving in a level. Some levels are not crossed at all, depending on the amount of days.

But I have some remarks.
. Sometimes the price jitters and can cross levels more then ones in a day. So i counted them all. Maybe only once in a day is better.
. Also there are H1 bars(high-low) which cross sometimes several levels. To prevent this i use the close value to determine if a level is crossed.

This is a day i count only level 0.
All closes within +0.25% and - 0.25%, but high and low cross levels

Attached Image


An other discussion is how many days you have to look back. If you take many days the statistics are valid for this period as a whole. But the market is not always the same. It is a trade off.

So you can select the number of days, the percentages and if you want to use the levels as percentage of open price or as percentage of ADR. ADR is calculated as average over all days.

BR
It is not important how often you fall down, but how often you get up again
  • #715
  • Aug 23, 2020 12:19pm Aug 23, 2020 12:19pm
Quoting emonts
An other discussion is how many days you have to look back. If you take many days the statistics are valid for this period as a whole. But the market is not always the same. It is a trade off. So you can select the number of days, the percentages and if you want to use the levels as percentage of open price or as percentage of ADR. ADR is calculated as average over all days. BR
And this is yet another aspect of statistical analysis: When I split my data into groups and make a comparison between groups (or even just a comparison of the most recent group with all of the prior data), does this new group belong to the prior data, or is it statistically different from the prior data?

If the new group belongs with the old data, then just include it.
If you data set is becoming "too big" for whatever you are doing and it is statistically the same, then you can just eliminate some of the earliest data to keep the size down.

If the new group does not belong with the old data, then you have to make a decision about how to proceed.
To free Gazans of Hamas, use whatever it takes.
  • #716
  • Aug 23, 2020 12:36pm Aug 23, 2020 12:36pm
So by now many of you have seen just how random day trading is but did you know that swing trading was not a heck of a lot better?

Here are the weekly Frequency Distributions over a 4 year period.

That is right folks this market barely moves plus or minus 2% a WEEK.
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.JPG Size: 118 KB
  • #717
  • Aug 23, 2020 1:50pm Aug 23, 2020 1:50pm
Quoting CeeSo
Here are the weekly Frequency Distributions over a 4 year period. That is right folks this market barely moves plus or minus 2% a WEEK.
Thanks for your work to evaluate the data. Just one question: wouldn't it be more meaningful to analyze high/low instead of open/close?
  • #718
  • Aug 23, 2020 3:40pm Aug 23, 2020 3:40pm
Quoting emonts
Hi, Coded an indicator for statistics. Gives percentages between levels. level 0 = open price. level 1 = open price + 0.25 percentage of open price level -1 = open price - 0.25 percentage of open price. And so on. You can also select ADR as range. level 1 = open price + 25.0 percentage of ADR. Levels are calculated based on H1 bars within a day. Be aware that many days will also mean many H1 bars. History and no holes needed. I did not test if not enough bars and or holes, what happens. Default 100 days, should be ok. {image} BR {file}


Does this only work on the H1?
  • #719
  • Aug 23, 2020 3:41pm Aug 23, 2020 3:41pm
Thank you sir, you are healing the wounds of those who suffered by sharing your losses, I say this because most traders only tell stories of success. do not be ashamed to share your failure. I have been trading stocks for more than 15 years, and lost EVERYTHING, then switched to FOREX binary about 7 years ago, still loosing. But I started to see the light. May I just add one advice, wait...Wait...WAIT !!!
  • #720
  • Aug 23, 2020 3:56pm Aug 23, 2020 3:56pm
Quoting Mikey2times
{quote} Does this only work on the H1?
HI,
No it is daily, only for the stats, crossing individual levels i used H1 bars.

BR
It is not important how often you fall down, but how often you get up again
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