TOP 100 best edges on forex charts: post good edges here

Very interesting remarks about what an experienced trader, split_unit, has found in the forex market:

10 years in after discovering that trading is my passion, getting an MSc in Finance, becoming a CFA chart holder and getting a job on the buy side, I somehow revisited forex factory and found this thread. I have to admit, some of the stuff written here is hilarious. What I have found out to be the truth is that:

1. The FX market is by far and away the toughest market to make money in consistently. Just because a few brokers (sharks) made it sound like it was easy to make money doesn't mean that it is. The FX market is unregulated and hence, you get these shenanigans.
2. Everyone can make money in the markets, you just have to know your niche, be good at it and master it. Forex isn't the only market out there! Look at stocks and futures and ETF's. They trend and mean revert too! The reasons why they do so is almost always clear!
3. You won't know your niche if you don't try other markets/strategies.
4. Some of the guys over here did like a million trades a year for 10 years without learning anything! In finance and unlike other fields, 10000 hours of deliberate practice doesn't equal success. If you are allocating energy into something that doesn't work, move on.
5. Technical analysis is the biggest pool for sunk costs. You won't ever become better by staring at a one minute chart for 5 years without knowing why prices move the way they do (fundamental analysis).
6. Forex forums like this one exist for the sharks mentioned in point 1. Just look at the adds everywhere.
7. If you want to learn how to make money, try to learn from the best. Not some dude who says he can make money on Forex Factory. My personal favourites are Warren Buffett (Value Investing), Bill Miller (Portfolio Management and Multi-Asset Investing), Howard Marks (Investment Philosophy). Jack Schwager Market Wizards books.
8. Demo or paper trading only works in the imaginary world. They say that there is no difference between theory and practice but in practice there is. Trade real money with the smallest amount that you are willing to lose. You won't ever become successful paper trading. Be brave and only bet what you are willing to lose.
9. There are no shortcuts, no magic formulas or a holy grail. The moment you identify what looks like a holy grail, you have to realize that it is temporary. Successful traders find holy grail(s) because they are equipped with knowledge and experience. If you don't have either, you won't succeed.
10. Professional fund managers don't need fancy Bloomberg Terminals, USD 500 a month charting tools or news feeds that cost USD 1000 a month. They can make money in any environment because they understand it. I know a fund manager who had an AUM of USD 500 million, and he relied on Google. In case you think I was bluffing, check out this guy called Warren Buffett, check whether he has a PC and check his net worth.
Quoted from: https://www.forexfactory.com/showthr...8#post11437698

How do we find the edge? With information, knowledge? Here are some myths to think about:

IMAGINATION IS MORE IMPORTANT THAN KNOWLEDGE
IF YOU CAN'T EXPLAIN IT SIMPLY YOU DON'T UNDERSTAND IT WELL ENOUGH
-ALBERT EINSTEIN.

Conclusion: when the ship starts to sink, then don't pray.

Top 100 edges:

1. Learn the basics of forex trading. It's amazing how many people simply don't know what they're doing. In order to compete at the highest level in the trading business and be one of the few truly successful participants you must be well-educated about what you are doing. This does not mean having a degree from a
well-respected university - the market doesn't care where you were educated.

2. Forex trading is a zero sum game. For every long there is also a short. If 80% of the traders are on the long side, then the remaining 20% are on the short side. This means further that the shorts must be well capitalized and are considered to be strong hands. The 80%, who are holding much smaller positions per trader, are considered to be weaker hands who will be forced to liquidate those longs on any sudden turn in prices.

3. Nobody is bigger than the market.

4. The challenge is not to be the market, but to read the market. Riding the wave is much more rewarding than being hit by it.

5. Trade with the trends, rather than trying to pick tops and bottoms.

6. Trying to pick tops and bottoms is another common Fx trading mistake. If you're going to trade tops and bottoms, at least wait until the price action actually confirms that a top or a bottom has been formed before you take a position in the market. Trying to pin-point tops and bottoms in the foreign exchange market is very risky, but exercising a little patience and waiting for a proven top or bottom to form can increase your odds of profiting and somewhat reduce your risk.

7. There are at least three types of markets: up trending, range bound, and down. Have different trading strategies for each.

8. Standing aside is a position.

9. In uptrends, buy the dips; in downtrends, sell bounces.

10. In a Bull market, never sell a dull market, in Bear market, never buy a dull market.

11. Up market and down market patterns are ALWAYS present, merely one is more dominant. In an up market, for example, it is very easy to take sell signal after sell signal, only to be stopped out time and again. Select trades with the trend.

12. A buy signal that fails is a sell signal. A sell signal that fails is a buy signal.

13. Let profits run, cut losses short.

14. Let your profits run, but don't let greed get in the way. Once you've already made a nice profit on a trade, consider taking either some or all of the money off the table and move on to the next trade. It's natural to hope that one trade will end up as your "winning lottery ticket" and make you rich, but that is simply not realistic. Don't hold the position too long and end up giving all your well-deserved profits back to the market.

15. Use protective stops to limit losses.

16. Use appropriate stop-loss orders at all times to cut your losses and never, ever sit back and let your losses run. Almost every trader at some point makes the mistake of letting his or her losses run in hopes that the market will eventually turn around in his or her favor but, more often than not, it simply leads to an even greater loss. You win some, you lose some. Simply learn to cut your losses, take your occasional lumps and move on to the next trade. And if you made a mistake, learn from it and don't do it again.

To avoid letting your losses run, get into the habit of determining an acceptable profit target as well as an acceptable risk tolerance level for each and every forex trade before entering the market. Then simply place a stop-loss order at the appropriate price - but not so tight (close to the market) that the stop could quickly take you out of the position before the market has a chance to move in your favor.

Using a stop is always the smart move.

17. Avoid placing protective stops at obvious round numbers. Protective stops on long positions should be placed below round numbers (10, 20, 25, 50, 75, 100) and on short positions, above such numbers.

18. Placing stop loss is an art. The trader must combine technical factors on the price chart with money management considerations.

19. Analyze your losses. Learn from your losses. They're expensive lessons; you paid for them. Most traders don't learn from their mistakes because they don't like to think about them.

20. Stay out of trouble, your first loss is your smallest loss.

21. Survive! In forex trading, the ones who stay around long enough to be there when those "big moves" come along are often successful.

22. If you are a new trader, be a small trader (mini account) for at least a year, then analyze your good trades and your bad ones. You can really learn more from your bad ones.

23. Don't trade unless you're well financed...so that market action, not financial condition, dictates your entry and exit from the market. If you don't start with enough money, you may not be able to hang in there if the market temporarily turns against you.

24. Be more objective and less emotional.

25. Use money management principles.

26. Money management increases the odds that the trader will survive to reach the long run.

27. Diversify, but don't overdo it.

28. Employ at least a 3 to 1 reward-to-risk ratio.

29. Calculate the risk/reward ratio before putting a trade on, then guard against holding it too long.

30. Don't trade impulsively; have a plan .

31. Have specific goals and objectives.

32. Five steps to build a trading system:
a) Start with a concept.
b) Turn it into a set of objective rules.
c) Visually check it out on the charts.
d) Formally test it with a demo.
e) Evaluate the results.

33. Plan your work and work your plan.

34. Trade with a plan - not with hope, greed, or fear. Plan where you will get in the market, how much you will risk on the trade, and where you will take your profits.

35. Follow your plan. Once a position is established and stops are selected, do not get out unless the stop is reached or the fundamental reason for taking the position changes.

36. Any successful trading system must take into account three important factors: price forecasting, timing, and money management. Price forecasting indicates which way a market is expected to trend. Timing determines specific entry and exit points. Money management determines how much to commit to the trade.

37. Don't cherry-pick your system's set-ups. Trade every signal.

38. Trading systems that work in an up market may not work in a down market.

39. Establish your trading plans before the market opening to eliminate emotional reactions. Decide on entry points, exit points, and objectives. Subject your decisions to only minor changes during the session. Profits are for those who act, not react. Don't change during the session unless you have a very good reason.

40. Double-check everything.

41. Always think in terms of probabilities. Trading is all about thinking in probabilities NOT certainties. You can make all the "right" decisions and the trade still goes against you. This does not make it a "wrong" trade, just one of the many trades you will take which, through probability, are on the "loosing" side of your trading plan. Don't expect not to have negative trades - they are a necessary part of the plan and cannot be avoided.

42. The place to start your market analysis is always by determining the general trend of the market.

43. Trade only with a strategy that you've proven to yourself.

44. When pyramiding (adding positions), follow these guidelines:
a. Each successive layer should be smaller than before.
b. Add only to winning positions.
c. Never add to a losing position. One of the few trade management rules that we can state we never break is 'Never add to a losing trade'.
Trades are split into winners and losers, and if a trade is a loser, the chances of it turning right around and becoming a winner are too small to risk more money on. If indeed it is a winner disguised as a loser, why not wait until it shows its true colors (and becomes a winner) before you add to it. If you do this you will notice that nearly always the trade ends up hitting your stop loss and does not look back.
Sometimes the trade turns around before it hits your stop and becomes a winner and you can count yourself very fortunate. Sometimes the trade hits your stop loss and then turns around and becomes a winner and you can count yourself unlucky. Whatever the result, it is never worth adding to a loser, hoping that it will become a winner. The odds of success are just too low to risk more capital in addition to the initial risk.
e. Adjust protective stops to the breakeven point.

45. Risk Control:
A) Never risk more than 3-4 percent of your capital on any trade.
B) Predetermine your exit point before you get into a trade.
C) If you lose a certain predetermined amount of your starting capital, stop trading, analyze what went wrong, and wait until you feel confident before you begin trading.

46. Don't trade scared money. No one ever made any money trading when they had to do it to pay the mortgage at the end of the month. Having a requirement to make X dollars per month or you will be financially in trouble is the best way I know to completely mess up all trading discipline, rules, objectives, and leads quickly to disaster.
Trading is about taking a reasonable risk in order to achieve a good reward. The markets and how and when they give up their profits is not under your control. Do not trade if you need the money to pay bills. Do not trade if your business and personal expenses are not covered by another income stream or cash reserve. This will only lead to additional unmanageable stress and be very detrimental to your trading performance.

47. Know why you are in the markets. To relieve boredom? To hit it big? When you can honestly answer this question, you may be on your way to successful forex trading.

48. Never meet a margin call; don't throw good money after bad.

49. Close out losing positions before the winning ones.

50. Except for very short term trading, make decisions away from the market, preferably when the markets are closed.

51. Work from the long term to the short term.

52. Use intra-day charts to fine-tune entry and exit.

53. Master inter-day trading before trying intra-day trading.

54. Don't trade the time frame. Trade the pattern. Reversal patterns, hesitation patterns and breakout patterns appear often. Learn to look for the pattern in any time frame.

55. Try to ignore conventional wisdom; don't take anything said in the financial media too seriously.

56. Always do your homework and stay current on global events. You never know what's going to set off a particular currency on any given day.

57. Learn to be comfortable being in the minority. If you are right on the market, most people will disagree with you. (90% losers, 10% winners).

58. Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.

59. Beware of all tips and inside information. Wait for the market's action to tell you if the information you've obtained is accurate, then take a position with the developing trend.

60. Buy the rumor, sell the news.

61. K.I.S.S - Keep It Simple Stupid, more complicated isn't always better.

62. Timing is especially crucial in forex trading.

63. Timing is everything in forex trading. Determining the correct direction of the market only solves a portion of the trading problem. If the timing of the entry point is off by a day, or sometimes even minutes, it can mean the difference between a winner or a loser.

64. A "buy and hold" strategy doesn't apply in forex trading.

65. When you open an account with a broker, don't just decide on the amount of money, decide on the length of time you should trade. This approach helps you conserve your equity, and helps avoid the Las Vegas approach of "Well, I'll trade till my stake runs out:' Experience shows that many who have been at it over a long period of time end up making money.

66. Carry a notebook with you, and jot down interesting market information. Write down the market openings, price ranges, your fills, stop orders, and your own personal observations. Re-read your notes from time to time; use them to help analyze your performance.

67. Don't count profits in your first 20 trades. Keep track of the percentage of wins. Once you know you can pick direction, profits can be increased with multi-plot trading and variations in using your stops. In other words, now is the time to get serious about money management.

68."Rome was not built in a day;' and no real movement of importance takes place in one day.

69. Do not over trade.

70. Have two accounts. One real account and the other a demo account. Learning doesn't stop when trading real dollars begins. Keep the demo account and use it to test alternative trades, alternative stops, etc.

71. Patience is important not only in waiting for the right trades, but also in staying with trades that are working.

72. You are superstitious; don't trade if something bothers you.

73. Technical analysis is the study of market action through the use of charts, for the purpose of forecasting future price trends.

74. The charts reflect the bullish or bearish psychology of the marketplace.

75. The whole purpose of charting the price action of a market is to identify trends in early stages of their development for the purpose of trading in the direction of those trends.

76. The fundamentalist studies the cause of market movement, while the technician studies the effect.

77. Rising commodity prices generally hint at a stronger economy and rising inflationary pressure. Falling commodity prices usually warn that the economy is slowing along with inflation.

78. The longer the period of time that priced trade in a support or resistance area, the more significant that area becomes.

79. There are three decisions confronting the trader -whether- to go long, go short or do nothing. When a market is rising, the best strategy is preferable. When the market is falling, the second approach would be correct. However, when the market is moving sideways, the third choice -to stay out of the market- is usually the wisest.

80. Channel lines have measuring implications. Once a breakout occurs from an existing price channel, prices usually travel a distance equal to the width of the channel. Therefore, the trader has to simply measure the width of the channel and then project that amount from the point at which either trendline is broken.

81. The larger the Pattern, the Great the potential. When we use the term "larger", we are referring to the height and the width of the price pattern. The height measure the volatility of the pattern. The width is the amount of time required to build and complete the pattern. The greater the size of the pattern-that is ,the wider the price swings within the pattern (the volatility ) and the longer it takes to build -the more important the pattern becomes and the greater the potential for the ensuing price move.

82. The breaking of important trendlines. The first sign of an impending trend reversal is often the breaking of an important trendline. Remember however, that the violation of a major trendline does not necessarily signal a trend reversal. The breaking of a major up trendline might signal the beginning of a sideways price pattern, which later would be identified as either the reversal or consolidation type. Sometimes the breaking of the major trendline coincides with the completion of the price pattern.

83. The minimum requirement for a triangle is four reversal points. Remember that it always takes two points to draw a trendline.

84. The moving average is a follower, not a leader. It never anticipates; it only reacts. The moving average follows a market and tells us that a trend has begun, but only after the fact.

85. Shorter term averages are more sensitive to the price action, whereas longer range averages are less sensitive. In certain types of markets, it is more advantageous to use a shorter average and, at other times, a longer and less sensitive average proves more useful.

86. When the closing price moves above the moving average, a buy signal is generated. A sell signal is given when prices move below the moving average.

87. A buying signal on a two-moving average combination occurs when the shorter term of two consecutive averages intersects the longer one upward. A selling signal occurs when the reverse happens, and the longer of two consecutive averages intersects the shorter one downward.

88. Do not overtrade (again).

89. Shorter average generates more false signals, it has the advantage of giving trend signals earlier in the move. The trick is to find the average that is sensitive enough to generate early signals, but insensitive enough to avoid most of the random "noise".

90. Cutting losses is painful for every trader. The ability to cut one's losses in time is the sign of a seasoned trader.

91. A channel breakout suggests a target for the currency price equal to the width of the channel.

92. Long term charts provide important information regarding long-terms or cycles. The trader can get a correct perspective regarding the real direction of the market in the long run, the strength or direction of the current trend occurring within that trend, or the possibility of a breakout from the long-term trend.

93. Common Points All Of Reversal Patterns:
A) The first signal of an impending trend reversal is often the breaking of an important trendline.
B) The larger the pattern, the greater the subsequent move.
C) Topping patterns are usually shorter in duration and more volatile than bottoms.
D) Bottoms usually have smaller price ranges and take longer to build.

94. The head-and-shoulders formation is confirmed only when the completion of the three rallies and their reversals is followed by a breach of the neckline. The failure of the price to break through the neckline on closing prices basis puts on hold or negates the validity of the formation.

95. The double-top formation is confirmed only when the full completion of the two rallies and their respective reversals is followed by a breach of the neckline (the closing price is outside the neckline). The failure of the price to break through the neckline puts on hold or negates the validity of the formation.

96. The flag formation is a reliable chart pattern that provides two vital signals: direction and price objective. This formation consists of a brief consolidation period within a solid and steep upward trend or downward trend. The consolidation itself tends to be sloped in the opposite direction from the slope of the original trend, or simply flat.

97. A Breakaway gap provides the direction of the market.

98. The runaway or measurement gap provides the direction of the market. This gap confirms the health and velocity of the trend.

99. The runaway or measurement gap is the only type of gap that provides a price objective. The price objective is the previous length of the trend, measured from the runaway gap, in the same direction as the original trend.

100. The exhaustion gap provides the direction of the market.
Quoted from: https://forex-station.com/viewtopic.php?f=578271&t=8472880

My opinion:
6. Trying to pick tops and bottoms is another common Fx trading mistake. If you're going to trade tops and bottoms, at least wait until the price action actually confirms that a top or a bottom has been formed before you take a position in the market. Trying to pin-point tops and bottoms in the foreign exchange market is very risky, but exercising a little patience and waiting for a proven top or bottom to form can increase your odds of profiting and somewhat reduce your risk.
--> I agree, so I suggest to buy in an uptrend as long as there is no bearish swing. Agreed?

7. There are at least three types of markets: up trending, range bound, and down. Have different trading strategies for each.
--> In my opinion the best trading strategy is a system suitable for many different conditions. Incasu, I suggest to use either a system that profits from both uptrend and ranged, or downtrend and ranged. If you are going for breakout, then I suggest a system utilizing downtrend and uptrend.

8. Standing aside is a position.
--> Yes and no. Yes, assuming it's not a missed opportunity. No, because there are systems to trade in all market conditions and therefore always have a trade open. No, because I suggest to open a buy trade if the trend is long or flat, and sell if the trend is short.

10. In a Bull market, never sell a dull market, in Bear market, never buy a dull market.
--> I suggest to apply your trading pattern. Check if the pattern is bearish or bullish. Then go that direction.

13. Let profits run, cut losses short.
--> This is a myth, it's popular. But: are you considering we should only trade breakouts? Because 70% of the time the market is ranged which means cut profits short. Agreed? (you can argue that you are in a trend, but what if it's just the beginning of a big range being at the top/bottom of the ranged market)

19. Analyze your losses. Learn from your losses. They're expensive lessons; you paid for them. Most traders don't learn from their mistakes because they don't like to think about them.
--> Yes, I suggest to improve.

38. Trading systems that work in an up market may not work in a down market.
--> Can anyone elaborate please?

42. The place to start your market analysis is always by determining the general trend of the market.
--> I suggest to open more (lotsize) in the direction of the main trend.

44. When pyramiding (adding positions), follow these guidelines:
a. Each successive layer should be smaller than before.
--> I agree, this is one of the assignments in this thread. Could anyone answer the assignments: https://www.forexfactory.com/showthread.php?t=812805

b. Add only to winning positions.
--> Idem, please do the assignment.

66. Carry a notebook with you, and jot down interesting market information. Write down the market openings, price ranges, your fills, stop orders, and your own personal observations. Re-read your notes from time to time; use them to help analyze your performance.
--> Anyone open to share his or her notes that he can't do without? Attached are notes of active traders.

73. Technical analysis is the study of market action through the use of charts, for the purpose of forecasting future price trends.
-- indicators don't predict the future but there are exceptions: TL (trendline) indi's, pitchfork, market profile.

76. The fundamentalist studies the cause of market movement, while the technician studies the effect.
--> As far as I know the word news is used too freely.
If you refer to the day to day news.
It has no effect on long-term trading or higher timeframe positions.
However forecast based on economic policies of major currencies do have medium or long term impact . These I would not want to classify into the normal news pool since economic policies and regulatory adjustment are done due to economic data which in itself is not news but is obtained after the activities of demand and supply.
All to often the issue of sentiment comes into play.
So as I said what can be considered news may be true news (which should not impact over medium or long term)
Were then do we classify local markets adjustment in form of regulatory policies and ratings since even without formal announcements they still have a long-term or medium term impact.
Also I have been opportune to personally meet traders who do not factor news into trading decisions but make good from every situation.
They simply stick to structure analysis knowing the market behavior will give them a clear direction.

77. Rising commodity prices generally hint at a stronger economy and rising inflationary pressure. Falling commodity prices usually warn that the economy is slowing along with inflation.
--> In your opinion, do you consider it a higher probability for reverse, if price has gone up for a long time on itself? Yes or no, and why?

78. The longer the period of time that priced trade in a support or resistance area, the more significant that area becomes.
--> Has it been researched and confirmed that levels of SR matches mean-reversal?

80. Channel lines have measuring implications. Once a breakout occurs from an existing price channel, prices usually travel a distance equal to the width of the channel. Therefore, the trader has to simply measure the width of the channel and then project that amount from the point at which either trendline is broken.
--> Mark Boucher states that 70% of the time the market moves 20%. I suggest to consider a channel width this 20% and calculate over the 70% move of the prediction. Agreed?

85. Shorter term averages are more sensitive to the price action, whereas longer range averages are less sensitive. In certain types of markets, it is more advantageous to use a shorter average and, at other times, a longer and less sensitive average proves more useful.
--> Could anyone elaborate please? The certain types are trend and ranged markets?

89. Shorter average generates more false signals, it has the advantage of giving trend signals earlier in the move. The trick is to find the average that is sensitive enough to generate early signals, but insensitive enough to avoid most of the random "noise".
--> I assume you are suggesting to optimize (curve-fitting)? If not, can someone please elaborate?

List of edges in the forex market:
- The more candles a specific pattern contains, the more reliable it usually is
- Clear pattern over unclear pattern
- Small pattern used in mean-reversal
- use inflection points. Google it if you don't know it yet. Everyone should know it

The whole year can be divided in thirds, starting with the three terrible months of Summer, the four best months of Autumn, and the four decent months of
Winter-Spring.
Thee THREE worst months (Summer): June, July, and particularly, August.
The FOUR best months (Autumn): September, October, November, and December.
The FIVE good Months (Winter-Spring): January, February, March, April, and May

What Is The Reason For This Divide?

Any vacation period represents drying up trading volume, and the months following these vacations represent a refreshing return to trading, like rain after a drought.

The Big Drought: The Summer Vacation Months Of June, July And August

Research data from the S&P indicates that the summer months provide weak returns for most financial markets for many countries in Europe. The old adage traditionally used across London trading floors ‘Sell in May and go away’ still holds its own, according to an analysis by S&P Indices. It is the last four months of the year that contribute most to full year returns. The theory behind this maxim is that the summer months are characterized by sluggish performance or a loss. By selling out your holdings in May, and reinvesting them only when the summer is over, you protect your portfolio and potentially achieve better returns. By analyzing the monthly performance of sixteen European markets in the S&P Global Broad Market Index over the ten year period from January 2000 to December 2009, S&P has shown that this trading strategy still holds good across Europe.

For most European countries, and also for the US, the June-August period averages out to be slightly negative. The preceding Jan-May period averages out to be 3%, with the bulk of the gains falling in last four months of the year (Sept-Jan). The last four months remain the most important for contributing to full year returns, meaning that even after experiencing a poorly performing summer there is still the chance to improve returns.

August Is The Worst Summer Month

Incidentally, August is the worst month of the summer season:
August 2011 was miserable for the S&P 500, falling 10%.
August 2010 was also miserable for the S&P, falling 4.5%.
August 2008 was deceptively good for the S&P, rising 1% before it nose-dived.
The summer, especially August, is the worst period to trade with many institutional traders in Europe on vacation and North America on holidays as well. That leads to less trading and big price swings. The best strategy many suggest is to simply go on vacation and resume trading when September comes around.

I have often traded during the summer and regretted it. The currency markets become very erratic and unpredictable.

If you have to trade during the summer, be ready for the sideways action. Trade a range based system (also called trend fading strategy). Sell a currency at the top of its range, buy at its bottom, rinse and repeat. Or zoom into smaller time frames (M5 or M15) to trade the mini trends.

Sooner or later the sideways trend breaks, and that is usually right after the Labor Day holiday in the US, everyone takes a break and summer is unofficially over after that.

Post-Summer Months (September To December) Offer Up The Best Trading Period, As Markets Rebounds From Summer Drought

The reason why the best months to trade occur just after summer, from September to December, is because these months represent a surge of trading activity after the summer holiday lull. If one were to choose just a few months to trade, these would be it.

Second Vacation Spot: Second Half Of December

There is a "Winter Month" for slow trading. The second half of December has the same low volumes as August. The weeks around and past Christmas are as slow as August and the beginning of January is not that great as well.

Winter-Spring Action Still Good

Just after the second holiday period in December, there is a pick of trading activity that lasts from January to May, 2011. It may not be as powerful a trading period as the one in Autumn, but it does provide many months of excellent opportunity.
Quoted from: https://www.cashbackforex.com/en-us/school/tabid/426/ID/436818/best-hours-days-and-months-to-trade


Conclusion:
During vacation months - counter trend and range strategies. during active trading months trend strategies in the most cases

Assignment: hurst indicators

1. Open the chart with the hurst indicators (any chart) (hurstexponent: lookback = 300 or less depending on your RAM)
2. fine-tune the waves with hurst
3. take 8 hours today only checking waves line by line with the hurst cycle and look for edges. (all Timeframes, pairs)(checking wave patterns, swing patterns, hurst patterns)

In your opinion, is hurst trading an edge? Yes or no, and why?

What do you say to someone who wants to find out about something and they study it for more than 6 months minimum- 1 topic...at some point or another something has to start working either the brain or that thing they are studying.

So here it Is you start researching:

1. You read and watch everything on the topic,
2. start making notes,
3. start testing on a live cent account,
4. you review the settings at the end of a trading period. This review teaches and identifies important information rather than just changing and not remember particularly important details which 1 minor detail can change your life.
5. Networking with people who do the same thing.
6. Be happy to make mistakes etc. Take the losses those should be the important lessons learnt...not the winners.

Question what if you had a strategy that no matter what you keep losing what would you do...? By the way this is actually a good thing... Would journaling help?

The mistake a lot of potentially good traders do is to keep switching from strategy to the next, not spending enough time to get intimate and personal with it. If you want to spend the rest of your life with a person you gotta get to know them right rather than just seeing a random person and go live together just like that. When a person study to be a professional like a chef, a doctor, accountant, architect, it takes time to learn theory then they need to get practical experience, what separates every one in those classes of how many doctors, for those who came first in the class versus performing in last place is how they apply themselves to what they are doing. Can you imagine a doctor walking around with their class performance on the I.D. card stating that they came last in the passing grade and they are about to do surgery on you, you would think twice Right, well it's the same with money, money should think twice in some traders hand.

How can one become a professional if they don't apply themselves, a couple months can't certify one to be trusted with a couple thousand in invested funds.

Be professional as though you have to make a report about your performance and you will see the complete difference. Review your trades inside out, review the method of entry, exit, maintenance, risk and goal of the system. Without a plan you are doomed to self distruct. Any distraction should be the volume of withdrawals taking place not donation to the market place.

Price Structure Part 1

Price needs to behave in a certain to retain it's "Randomness" and fractal structure. Statistically, this can be described by measuring the High-Low and Absolute Open-Close price ranges and how these vary through increasing time-scales. If you do this, you will find the following:

1. Every 4x increase in time doubles the price range..
2. The open-close absolute range is almost exactly half the high-low range..

This is of course when averaged across many bars and will fluctuate wildly in the short term. I believe this is also called Fractional Brownian Motion.

From this you can draw the following conclusions:

1. Price expands at the square root of time.
2. Price retraces 50% on average on all time scales.

This also explains why Market Profile shapes form, as well as the the Elliot Wave Principle. It also explains why price is heavily recurrent and why not all time frames are equal. It also gives a rationale for Gann Fan Lines. This goes much deeper, but you will have to think out of the box to really appreciate this.

This phenomena has also been discovered by Jim Sloman and he created several indicators based on this principle. See chapter 3 of the attached Ocean Theory document.

This thread is also worth reading: https://www.forexfactory.com/showthread.php?t=743125

Obviously, this is meaningless without an application. How do price have to propagate to maintain this structure? I believe the Goodman Wave Theory by Michael Duane Archer describes price propagation very well. It is surprising that this topic is almost not existent on FF. IMO it is one of the simplest and most effective ways to trade. I am not going to discuss the theory here, but I have attached an intro document describing the basic Goodman Wave. Have fun.

Hope someone finds this interesting or even useful..

Thank you.

For everyone reading, first starting from Jim Sloman's Ocean theory based "natural moving average" Nma. Here you can find some readings.
Mntiwana created a thread on Ocean theory. Thank you very much for all the hard work! Here you can find the theory and indicators. https://forex-station.com/viewtopic....8480&t=8412468

Attached you can find Ocean theory by Sloman.

Thank you so much. You stated:
- Prce expands at the square root of time.
- Price retraces 50% on average on all time scales.

That's an interesting mindset! I'm curious to know.
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1. Does Mark Boucher's viewpoint fit in this mindset that you stated?
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Boucher says:
The #1 money manager ranked by “Nelson’s World’s Best Money Managers”, about 70% of the moves in a given market occur 20% of the time.

More info:
- https://www.desiretotrade.com/the-70...ple-of-trading
- http://tradingmarkets.com/recent/mar...er-669791.html

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2. Does this fit said mindset:
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A market structure consists 80% of the time of trends with 20 degrees and many small retraces of 45 degrees?

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3. Does this mindset debunk MA crossovers and oscillator divergences on itself?
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I would argue that one could curve-fit crossovers and divergences, but not fit the market structure mindset. Is this correct?

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4. Can we consider that an edge has to fit only the following 2 conditions?
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a) Price expands at the square root of time.
b) Price retraces 50% on average on all time scales.
c) ?

Or which other conditions should be met, in your opinion? If any odd or edge does not fit above conditions, then should we consider the trading results as pure luck?

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5. Does said mindset or its conditions correlate with:
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- timing of (start, mid or end) of breakout/ranged market?
- choosing channel or wave entry/exit?
- 90% of the time price reverses, if price reaches 61 to 100 fib quickly?

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6. Does said mindset go into
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- Let profits run, cut losses short? This contradicts with your statement: "It also explains why price is heavily recurrent." Furthermore I could also argue that 80% of the time the market is ranged in which case one should cut profits short to have an edge. Is that correct?

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7. Could 4c (the third condition) perhaps be:
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- this or that (something) could be considered as SR level? Is there something considered a support resistance level?

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8. One could argue:
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- "Shorter average generates more false signals, it has the advantage of giving trend signals earlier in the move. The trick is to find the average that is sensitive enough to generate early signals, but insensitive enough to avoid most of the random "noise".
Is this correct? I consider this curve-fitting, because it doesn't meet the condition of 50% retracement and price expands at square root of time.

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9. The conditions are 50% retracement and price expands at square root of time. These conditions are fixed and don't expire. Does this debunk:
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- "edges expire on short term (in 2 years)"?




These are my questions. I'm awaiting your wisdom. Thank you in advance!

That's a lot of questions.. I will try to answer, though I am definitely not the ultimate authority.


Sounds about right. Price moves in such a way that most traders lose.


I am not sure about this one. What do you mean by degrees?


It does not debunk it, but it depends on the implementation. MA crossovers and Oscillator divergences only work under certain market conditions. The Trading System Developer needs to find ways to incorporate it. Multi-Time Frame analysis is key.


These are not edges in itself, but rather characteristics of the market that can be used to find an edge. The Goodman Wave Theory would be an edge, but it also depends on how it is implemented. Nothing works all of the time. The real edge is in knowing when to use what.


It depends on the type of system you are trying to develop. Mean reverting, trend following or a combo. It depends on the time frame and the number of pips you are trying to make. You need to be able to detect momentum if you want to let profits run. You need to have confidence that your entry is at the right place. You need to be able to detect when a possible reversal is forming.

Also, even though price is heavily recurrent, it could move many pips before coming back.


The problem with SR levels is that they are highly subjective. Yet, it is useful to see how price reacts around such a level. SR levels definitely have it's uses.



You are asking difficult questions with no clear-cut answers. Most of the time, trying to get early signals will generate losses. It depends on what you are averaging. It also depends on how you use the average to generate signals. You could be trading towards a moving average or away from it. Again, you need a way to determine the probability that your entry will succeed.


These conditions are only true on average and I don't think it will ever change. I would however say that any trading system or edge needs to be continually refined. Again, no clear cut answer. The market has to remain "Random". If your system can exploit this through all market phases, it will be robust.

Hope this helps..

Thank you so much. It's always interesting to hear your side and I'm overjoyed by your answer.

You stated: What do you mean by degrees?
--> I meant slope degrees

"These are not edges in itself, but rather characteristics of the market that can be used to find an edge. "
--> With the same enthusiasm I tried to keep my optimism as I googled for the other 99 characteristics in the market. A bear came by and lowered the bar, so to speak, here is what I found:
- http://www.businessmanagementideas.c...nagement/17189
- http://www.tjfengcai.com/characteris...the-forex.html
- https://ecmtrader.com/en/characteristics-of-fx-market/
- https://www.investopedia.com/terms/f...ge-markets.asp
- http://www.forex.pk/forex-market-characteristics.htm
- https://www.streetdirectory.com/trav...ex_market.html

It didn't give me a sufficient answer.

"Goodman Wave Theory would be an edge"
--> I will read his work.

" If your system can exploit this through all market phases, it will be robust."
--> One could opt for many trades with individual stoplosses. I argue a system will be more robust if no stoploss is used (only net sl) with 0.5 lotsize TP for an uptrend, 0.5 lotsize TP for range and a risk of 1 lotsize for a downtrend.

I wonder if I can find out whether something is an edge or curve-fitted, basically pure luck, and whether I need to know more characteristics to be able to compare edge against curve-fitting. Will you make a part 2?

Slope degree has to be scaled to time units per pip and is thus subjective. Yet, this ties in with the principles outlined and ties in with Gann fan-lines.


There are many, many ways to trade and to manage risk. The question is: What are you trying to achieve? Manual/automated/semi-automated/scalping/medium term or long term? Or are you simply doing research to see what is possible? Remember that there is a difference between an edge and a trading system. A proper trading system typically employs many edges. Beware against a too academic approach. A good system, I would say, uses more common sense than math. There may be other approaches of course.

I will do part 2 when I have time. The topic will be: Deltas and Sub-Sequences.

Cheers for now.

TY for the kind reply wanderer. Interesting stuff there. will read up some.

Thank you for your reply! I look forward to part 2.

For everyone who is reading this thread, open this pdf and read from page 5 about the characteristics of the market to find a forex edge.

It is guaranteed that the smallest data is M1 chart. A EUR/USD template over general.

Howdy all ,,,,
After so many years and well over 20,000 hours of screen time This is what i have come to conclusion ,,,,, and it is totally in my humble opinion .
I am not a swing trader ,, although it is of no difference to intrade trading which is what i do ,, cause chart analysis are all the same irrelevant of time frame .
=== The No edge in my opinion have to be "" understanding price action ""
The market does not do a Sunday afternoon park stroll ,, and it moves up and down for a reason ,, which is profit based .
=== The other edge we have is the following ,,,
it is 100% manipulated ,, which is a blessing in many ways ,, cause it is driven by a human element /habit ,,, which means habits do repeat .
I personally trade 1 pair ,, simply because i wanted to master the nature of the beast ,,, called the market . and also one does not need more than pair to make all the money they will need .
There is absolutely no use tracking many pairs when one have not established a full understanding of price action ,, and what i mean by that is ,,,
One needs to look at 100% plain chart ,,, fully naked ,, and if they can not understand why the price is moving ,,, where it is going to ,,, where it will be stopping and most most importantly WHY it will stop there ,, then keep studying price action OR talk to someone who has an understanding of it ,,, talk to them ,,, keep at it until u understand it .
This is why we read in forums so many traders struggling with their trading consistency ,,, cause their energies are not concentrated and focused on whats important ,, before u know it they are tracking 4 or 6 pairs ,,, their minds are like washing machines
When u have done that ,,, u need to have the following ,,,,,
One must achieve consistency in all aspects of ur approach or call it trading strategy. theory ,,, chart analysis ,, trade entries ect ect ,,, and yes it is achievable to do so . Personally i am not happy till i get over 90% .
I shall leave it at that peeps .
thank u for the opportunity to be able to add my suggestions here .
Cheers,
George

Interesting thoughts and I share them beside you. I agree, understanding price action is essential as to find the 'habits', or you can call it market structure. This market template, what essentially is a structure of returning elements are properties of swings, retracement rules and timing aspects. A default template opts for multipair trading, as such the EUR/USD template focuses on one specific news direction

Let's get deeper in the time element to find an edge. There is a LO and Asian timezone, and in itself may be an advantage. It's my assertion that the Asian timezone has a higher probability for a ranged market. Now, this does not mean all the time the Asian time period is in a ranged market condition but generally, I voice for yes. Do you agree, that a direction will be more clear at volatile time periods, namely around news time and London time?

Do we consider the London Open a higher probability for a trend market?

Furthermore, I agree that dozens of hours on a naked chart will make you realize certain habits. Although, maybe uncommon, I am certain one is able to backtest NMC indicators (the latest downloads), analyse from 2016 til 2018 to find many a time properties in this template.

Howdy Michael .
I quote whats u said above ,,,,
"" It's my assertion that the Asian timezone has a higher probability for a ranged market. ""
I simply love the setups that happen during the Asia session around Tokyo open for the GJ .
I will agree that often London time will put in a trend continuation/reversal ,,, or a good move .
Often also it will put in a great setup also ,,, and im sure u know what i mean without going into details here .
Cheers