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

Thank you I agree, volatility tend to give clearer setups as opposed to Asian timezone. In the indicator thread I posted a few FD (frequency distribution) indicators that count the amount of bars and show statistics.

Also, I've come across this interim report, forex insights and report of investment committee. Attached are some very informative reports that were recently published and would fit this thread.

You get an edge by using CATT tools. These can provide a customized heads-up-display to do a lot of the repetitive calculations for you, ultimately freeing you up to focus on geo-political and socio-economic events, and visually recognizing the types of patterns that only a human can understand. (Quantitative, Algorithmic, Machine, Strong-Weak Analysis, Pending entries and exits using all Alveo Chart Objects, Cone of Probability, Sloping Parabola of Probability, Decision Trees, MT4, MT5, Scripting, Back-Testing, Optimizing, Genetic Algorithms, Expert Advisor, Black-Box, Grey-Box, Proform Robot, Automated Trading, Neural Networks, Adaptive Strategies, Cyborg Finance)

If you are a beginner, then there are several different ways to categorize forex strategies. According to Blush the MT4 User's Manual lists just 2 main categories, while others will list 5 or 6, and Investopedia and Wikipedia list more than 10 categories in total, with some crossing over to multiple categories. It is ultimately ideal to forge a consensus on how to identify them, and to prioritize them into a specific order of operations, and to work towards a flowchart and flight-plan-checklist unique to each trader. This will tell us what to look for first, and what to do next at every step, so as to avoid pitfalls, and to keep nice relaxed emotions.
1) NEWS & EVENTS: First, take a look at the forex news and the trading calendars, and be aware of any events that might pop up, because they will affect every other strategy. If an event is coming, you can add it on the chart as a vertical line, and you will need to decide if you are going to do it, or avoid it. If you do it, you will use a specifically targeted tactic designed for that event. (Fundamental Analysis, Economic Indicators, Morning Open, Bankers Close, Economic Reports, Scheduled speeches by European and Japanese Finance Ministers & US Federal Reserve Board Members to groups of Market-Makers)
2) TREND-FOLLOWING: Next, trends are the easiest to jump on, either by eye, or by a quantitative trigger. (Technical Analysis, ADX, Alignment, SMA, SSMA, EMA, HMA, LWMA, OSMA, PPO, The SAR Method, Momentum Indicator, Force, Accelerator Indicator (AC), Relative Vigor Index (RVI), Alligator Indicator, The Breakout Method)
3) METHODS ADAPTIVE TO EITHER TREND OR REVERSION: Some systems are very adaptive to various conditions, or can be used in multiple ways. (MACD, Bollinger Bands, Donchian Channels, Keltner Channels, Envelopes, SD, RSI, Stochastic, Forex Fanatics Method, CCI, CHV, CMF, Fractals, MFI, BWMFI, PVT, OBV, Volume Indicator, Accumulation-Distribution Indicator (AD), Williams %Range (WPR), Awesome Oscillator (AO), Gator Oscillator, Ichimoku Kinko Hyo Method)
4) MEAN-REVERSION: If there is no trend, then you can approach it with a strategy that looks for a reversal pattern. (Three-Bar-Reversal, Apiary Pivots, Support & Resistance, Fibonacci, Aroon, DPO, Bears Power, Bulls Power, Price-Cycle, Time-Cycle)
5) SCALPING: This is best done in a fairly quiet and predictable market. Be on guard for surprise events! (Shawn's scalping Method, Sneak Thief Method)
6) ARBITRAGE: This is a sophisticated method that can take advantage of small and fleeting opportunities that only appear when comparing tiny asymmetries between multiple charts. Be on guard against slippage and latency issues! (Statistical Arbitrage, Behavioral Arbitrage)
7) MARKET MAKERS: Additionally, there are a number of tactics that are unique to major Market Makers. Most of them have been used widely ever since the 1980s, and they are more computerized nowadays. It's fascinating to read about them on Investopedia or Wikipedia. (High-Frequency Trading (HFT), Depth-of-Market Analysis, Spoofing, Iceberging, Dark Pools, etc.)

In regards to Ocean theory, I would like to take this opportunity to add suitable Ocean indicators to this thread, as they seem to fit the topic.

More Ocean indicators + theory please refer to mql5 page
https://www.mql5.com/en/forum/179737/page44

Building blocks for an edge:
- Develop a method with a statistical “edge”, using information largely unknown

- Method must fit personal financial & psychological profile

- Apply good money management

- Follow the rules you’ve established


On page 14 the forex magazine discusses Ocean Theory.

Indicators and strategies:
--> "The market indicators and strategies
that you may have relied upon in
non-volatile scenarios often become
irrelevant." - page 9

Price drivers:
--> “The lack of economic price drivers
is a real problem for anyone coming
into this market from traditional FX
where one can use numerous macro
indicators to assess pricing and make
trade decisions,” says Cathryn Lyall. - page 14

2018 view:
"Merging market currencies
are hitting record levels amid
rising optimism on global
growth, but risks remain
including potential fallout from rate
rises in developed economies.
Buoyed by rising commodity prices,
the MSCI Emerging Currency index
has hit its highest level since the eurozone
crisis sparked a selloff in 2011.
The rise comes despite interest rates
PETER GARNHAM increases in the US, which have traditionally
pulled investment away from
the developing world and in the past
have triggered huge emerging market
currency crashes, such as Asia in 1998
and Mexico in 1994.
Indeed, even as recently as 2014,
when the US Federal Reserve started
hinting at raising rates, the so-called
“fragile five” of the emerging market
world — Brazil, India, Indonesia,
South Africa and Turkey — saw their
currencies tumble against the dollar
amid concerns over their massive current
account deficits.
This time, however, it is different.
For a start, rate rises in the US haven’t
boosted the dollar as investors have
focussed on political concerns and
structural problems in the US, rather
than yield differentials.
Furthermore structural imbalances
in many emerging market countries
have been addressed, particularly in
the case of Asian countries, which
have built up their currency reserves
and refocused their economies since
the 1998 crisis.
Indeed, Adam Cole, head of FX strategy
at RBC Capital Markets, notes
that many Asian economies are have
been fundamentally restructured
the crisis, enjoying current account
surpluses and more stability in their
domestic property markets.
“A lot of the structural factors underlying
the Asian crisis have been corrected
in enormous ways,” he says.
Moreover, even the fragile five are in
better shape than in 2014, with current
account deficits now around 1%
to 2% of GDP, compared to around 4%
to 5% four years ago.
For RBC’s Mr Cole, the reaction of
emerging market currencies to rising
US interest rates will depend on how
other risky assets react - in particular
to how equities are affected by movements
in the US bond market.
“If the Fed is perceived to be moving
at a measured pace and that is sufficient
to keep bond yields under control,
and we don’t have a really brutal
sell-off in US bonds, then the implications
for broader markets are similarly
limited,” he says.
“In that environment broader risk
appetite, and with it emerging market
currencies, will hold up reasonably well.”
“My greatest fear for emerging markets
is that at some point we have a
real bloodbath in the US bond market
and that takes everything else with
it,” says Mr Cole, adding that the risk
at present appears to be limited rather
than imminent.
Analysts point to three pillars necessary
for continued gains in emerging
markets. First, there is predictability
in Fed monetary policy. Second,
growth in China needs to remain stable,
with its leaders reacting calmly
to the trade threats from the Trump
administration, calming fears over a
potential disruption to global trade.
And third, commodity prices, crucial
to the stability of many emerging market
currencies, need to hold up.
Furthermore, as the dollar falls and
emerging market currencies rally, it
is giving policymakers in emerging
market countries such a South Africa
and Brazil the chance to cut interest
rates — a further boon to owners of
emerging market fixed income.
That said, risks remain in emerging
market currencies as the Fed moves
to tighten monetary policy. Neil Mellor,
senior currency strategist at BNY
Mellon, acknowledges that structural
change, especially in Asia, means
that current account deficits are not
the issue they once were for emerging
market currencies.
“That issue may have receded, but
emerging market currencies are still
illiquid markets,” he says.
Mr Mellor points to risks such as the
rise in three-month dollar lending
rates and the fact that the Bank for
International Settlements estimates
there is $4 trillion of dollar-denominated
debt spread across the globe.
“It does demonstrate the pressure on
emerging market countries because
there is so much dollar-denominated
debt across the world. There is
Peter Garnham is a journalist and
consultant writing on economics, finance,
business and technology. Formerly
the currencies correspondent at the
Financial Times, he was editor at trade
specialist FX-MM magazine and covered
the currency markets for Euromoney.
constant re-pricing of that debt, and
emerging markets are the areas that
are the most sensitive to that re-pricing,”
he says.
“So far emerging market currencies
have absorbed the pressure of higher
dollar lending rates, but that pressure
is unrelenting. If the Fed is going to
raise rates, those rates will keep on rising,
raising the prospect of a snapback
in emerging market currencies.”
As Mr Mellor notes, these markets
can be brutal: “The exit doors always
seem a little narrower for investors
when the change in sentiment comes
in emerging market currencies.” - last page.

Random or predictable?
"Look at the whole issue of non-arbitrariness, that is for elements or aspects of market analyses which may not depend upon the particular biases of the person observing the market."

System with an edge:
In every system or approach to markets which I have come across I have noticed that at some point the user of that approach has to supply some relatively arbitrary number or constant or trendline or whatever, and that this input radically determines how the market looks to that observer.

Read his theory from page 15.

Do trendlines work?
"When using trendlines, people tend to draw lines on short-term, mid-short-term and long-term. It becomes unclear which of the many trendlines to consider." - Sloman, page 18 (Jim Sloman - Ocean Theory.pdf)

My opinion:
I agree with Sloman. IMHO, I suggest to not connect all high-lows of swings. But instead look at swings that already retraced 50% (template RULE). Consider this a real swing and connect the HiLo's.

Conclusion:
Don't trade trendlines, but rather horizontal lines (as I stated in previous comments in older threads). Only use this to confirm trend. If you agree or share a different view, please share it with us.

Is there really a holy grail or system with an edge?
All forex methods, strategies and systems may work in ideal circumstances. But one Elliot wave-expert may interpret his view differently than others, whether it's a 5th wave or an extension of the third wave. The result is clear in the aftermath, but not specifically in the process. Although, all current approaches of all forex systems are subject to this problem of arbitrary input. This strokes with other systems, namely Gann, Wykoff to Dow." Sloman - Ocean theory

My opinion:
I agree with Sloman, as I've tested the same principles thoroughly. It's not just systems. Also simple rules, as simple as:
- follow the main trend, is considered an edge. But which trend signal do you follow, in what circumstances?
- buy higher highs, but which breakout signal do you consider the right choice?
- use a consistent system, but how long is your system's back test data? 5 years? 30 years? The latter usually means a conservative system.

"Is there some approach to markets that involves less arbitrariness?" - page 17 - Sloman Ocean Theory
"If you looked at a moving car from your house out of your window, where would the car be likely the next time you see this car (or submarine)?"
- We don't know where the car is going or where it came from. We can't assume it's traveling on a straight line extending out beyond A-to-B.
- If we had to pick C (the future), where would you be most likely to sight this car again? Answer: read page 23.
- Conclusion: professional traders may use specific time/timezones to predict breakout, but rather make use of another time-approach where you link repetitive times with timeseries to calculate C. Example on page 24. This way of approach is called Adam theory.

This technical analysis method was first developed by Welles Wilder & Jim Sloman. They called it "The Adam Theory".

So is the true edge not in having an idea of the probability that any given strategy will work at any given time? In other words, knowing the current market state or phase? How can this be measured? MFE/MAE Analysis is at least one way to obtain an edge by measuring the state of any given strategy.

--> Correct, I agree.

Knowing the 'state' and 'phase' of the market, whether the market is in the start, mid or end of a trend or ranged market, could be deduced by looking at time and a certain amount of pips. By that I'm referring to the Best Seller book The holy grail trading system. They point out buy or sell from 40+ pips from price (of 8AM gmt) (page 91).

In this book the author discusses what a holy grail looks like, advantages and disadvantages of how to deal with drawdown and let's you think how to improve on any system.

"Grail is 100% mechanical that requires no user input
throughout the trading day. To me this is trading nirvana. After more that four years as a trader
you get to a point where it bores the pants off you hour after hour and you start to look for
something that can take away this tedious existence in front of 5 screens all day. To me that is
what grail is.

Grail is not, (nor was it designed to be) a 100% winning trading strategy. To me the holy grail
of trading is a system you don't have to think about or have decisions to make as to when to
close or enter etc.

The trouble is, as many of you will know, that the first ten minutes of any trade is the hardest to
keep your cool, which is where we are at in grail. The first six months is like the first ten
minutes of a daytrade. - [page 29 the holy grail trading system]

Missing parts in any system:
5. How to identify when the market conditions cause the system to fail.
6. What to do when it's failed. -
My advice to you is that when you design a system; make it a system based on a solid market
principle. And don't limit yourself - if it's good it will work on ANY currency pair. [page 86]

What is the edge? What is the grail system? Answer: read page 92.

'In other words, knowing the current market state or phase? How can this be measured? MFE/MAE Analysis is at least one way to obtain an edge by measuring the state of any given strategy."

--> I'm new to MFE/MAE analysis. I found the following:

"MAE marks the lowest price during a long trade and the highest price during a short trade. This helps you to identify what the maximum loss was during a trade. This is also known as maximum drawdown of the position.

MFE marks the highest price during a long trade and the lowest price during a short trade. This shows you what the highest profit was during a trade."

"I have been discovering many ways how to measure potential of trading strategies for last few years and I would like to say there is no a best way. During my discovering I found few methods which are able to quantify potential of trading strategy and I would like to introduce one of them. MAE & MFE is probably one of the simplest methods how to measure potential of trading system. I found this method as a first method and I like this most. MAE & MFE is analysis mostly used by directional algorithmic traders. Beauty of this method is in simplicity.
Maximum Favorable Excursion (MFE)– is a maximal unrealized profit during the period.
Maximum Adverse Excursion (MAE)– is a maximal unrealized loss during the period.
You can find lot of definition of MAE & MFE on the internet. Some of them use term during the open trade. This specification can be right but during the trade means that you already have an and you want to close trade on SL or PT. By hitting one of these closing orders you can get stats but those stats are automatically corrupted and you will never get a potential of the strategy in time scale out of it. If you want to get real and pure stats out of the testing, you need to use time scale analysis.
Timescale analysis

This is an example of one simple entry in time scale analysis. As you can see on the picture above there is a MAE & MFE limit in daily time scale. This is the way how to use quantification of one single signal in trading strategy. Now you have to apply this procedure for each entry generated by the trading strategy.
As you can see in picture below this is really not an easy way how to test a strategy. Method is a simple but is very difficult to make tests with huge sets of data and thousands of entries. You can use open office or excel for few signals as an example but this playground is mostly for algorithmic traders who can run these test in scripts.

Example of MAE & MFE analysis
Now we can specify what you can get out of these tests and what most important is. Take this picture as a demonstration of theoretical model

What you can see on the picture above is result of MAE & MFE analysis in 3 charts. First chart is sum of all bullish signals in trading strategy in 45 days period. Second chart is a sum of all bearish signals in trading strategy in 45 days period and third part is sum of all signals in trading strategy together.
New let’s see charts from a real trading signals

You can see exactly the same stats as previous example just with real trading signals. Now we can try to compare these two examples. Both examples are measured in same time period.

You can see most important thing in these tables in bottom of each table. There is a one row called e ratio and I would like to explain what e ratio is about.
e – ratio
e - ratio is a coefficient which is able to quantify potential of the trading strategy. e - ratio is quantification of sum positive trades (positive potential of the trades in time scale) divided by sum of negative trades (negative potential of the trade in time scale). As you know, one of the most profitable ways in the trading is picking a signals with good risk - reward ratio. MAE and MFE analysis measures the potential not only for one trade but for whole system. This is biggest advantage of this analysis and e – ratio is interpretation of this potential. See charts below.
MFE / MAE = e-ratio (higher number is better,everything over 1 is good result)

As you can see e-ratio in theoretical model is over 1 all the time. Real strategy result shows e-ratio over 1 only in 10-45 days interval, but then is higher than theoretical model. Is it better result or not? No, it is not.
This chart above is saying something important very strictly. Even if potential in real trading strategy in long term is very positive, system has no a good entry points. These stats can be corrupted by the random walk factors (huge bullish or bearish trend, disproportion in Long side and Short side trades and other factors). MAE & MFE analysis is study of potential of strategy in first place and validation of entry points in second. Exits are very important in trading but testing is not about exits in this case. Money management is most important thing in trading but it is completely different step from developing strategy procedure. We cannot mix all this steps together.
MAE & MFE Charts for different trading styles.
I would like to say one important note at the end. MAE & MFE analysis is powerful tool for potential measurement, validation of entries and is also helpful as a first step for simple money management setup. But is not a tool which can solve all problems. You need to be aware this analysis is only mathematical concept and is not very smart to using this without basic logic. You need to make a huge statistical sample. Another thing is that for different trading styles you are looking for a different entry quality and potential. For scalpers is most important thing first few minutes, for swing traders solid distribution in first hours and for investing or long term style traders is most important thing on the right side of the table. There is only one rule you need to follow. You need to have an e-ratio always more than 1. E ratio over 1.5 means that you have a powerful and robust trading strategy. " - https://www.dukascopy.com/fxcomm/fx-...61&language=en

As I'm new to MFE/MAE analyses, I see the advantages in doing so.

 

1. "If the MFE is usually much higher than the profit of the trade it means that you leave too much on the table. You should apply a trailing stop to protect your already earned profits
2. If the MAE is much lower than the loss it means you don’t apply stops.
3. If the MAE is very far from the entry price it means that your risk tolerance maybe too high" - https://www.tradingdiarypro.com/mae-mfe-explained/

You can get an edge with technical and fundamental analysis. Regarding fundamental edges, the public can get the NFP data 3 minutes before they are officially released (if they can find the providers). I once had the link for NFP data 3mins early, but lost the link. As far as i can remember it costs around $300 for a yr.

Obama gets the NFP numbers the night before, so any time after he's seen them, i assume they can be sold to the institutions. Likewise the UK's (trainee) chancellor gets the UK's GDP figures the day before. Possibly the easiest trade i've ever had, was when George Osbourne was interviewed the day before some GDP figures, he smiled (which is very rare for George) - i went long early the next day and the GBP rose 100pips or so. Easiest money ever made, so knowing in advance really does make a difference - but it usually costs, and not sure all are available to most of the public unless one has very deep pockets. There are websites (i think) and certainly traders who specifically cover and trade the news and sell and provide information, although I don't follow them, but Google should be able to find more in depth info and a few sites. The best way i find is to build a strategy for each different news event - and as news is always priced in, then usually it's also in the charts. Today's EUR/USD forecast attached.

Can an AI, artificial intelligence, beat the Forex Market?

Nowadays we have big companies with good AI systems, today there is an algorithm called Alpha Go zero (https://deepmind.com/blog/alphago-zero-learning-scratch), this AI can win basically any game, you just have to tell it the rules, and then he gets better at playing, and in hours, can outmatch any other player. My question is: if forex/ stock market are games, then why Alpha Go, and other AI systems can't return good profit and beating the market?

And in order to do so it doesn't have to predict the future, it can just find the holes in probabilities, where it stands the best chances.
Let's assume a future situation where all market participants will have a private alpha-zero to trade. Then, in that situation, alpha-zero will lose it's edge, and they will all lose money (in average) - at least the spreads+commision (in the best case they will lose only spread and commission - if all somehow manage to break even).

In current situation, given its abilities, I assume it can have an edge over most humans and software currently in the market. But that's changeable. The traders ability may evolve, but the game will always remain a zero sum game - meaning, the losers pay for the winners.

There could be more important factors why money flow in one direction , than oversee-able time trading. Maybe politics and safety and other things are more important than profit when exchanging money to some. I guess the market will always have participants that doesn't care about it, if they lose or win when they exchange money, because they have other interests or business-ideas. So I would not say that forex is an isolated zero sum game where one has to lose and one has to win. It's only those strategies that starts to extract too much profit that will stop to work, and those that tries to trade, but cant read the market that will lose. The winners will be those that adapt to what the sum of the rest is.

If Alphago can beat the market they are keeping it very private, i've found no news about AI's with a good edge on forex-stock market. They are tech guys and they usually try to implement AI in real life situations like self driving cars, scientific research etc. Probably, they never tried or no one thought in that direction yet since as per their explanations the alpha zero algorithm succeeded beyond their expectations so quickly and it is a recent event of a couple of months or years. I am very curious in implementing the alpha zero algo in forex and studying their white paper for a long time, but when it comes to implementing it to MQL5 it is not a one man job. If many programmers will join, then we can create a dedicated thread and work together towards it.
1. What are we doing here: https://www.forexfactory.com/showthread.php?t=785801
2. Collaborating on forex implementation: https://www.forexfactory.com/showthread.php?t=784994

“The goal of a successful trader is to make the best trades. Money is secondary.” – Alexander Elder
--> Trading, like any high-performance endeavor, requires skill, focus, and discipline. Those who are in it for the money alone aren’t likely to focus on the process of being a good trader. Concentrate on being a good trader and the money will follow.

“It is not the strongest or the most intelligent who will survive but those who can best manage change.” – Charles Darwin
--> Like uncertainty, change is also constant in the forex markets. The profitable trading methods and correlations today may not be what gets you pips next week. Profitable traders know how to adapt to any trading environment.

Michael ,, Michael ,, Michael My friend and fellow trader ,,,,,,
Why does this game need to be so complicated ,,, it is a simple game although it is NOT easy .
You and myself spent some time talking about what really goes on in this game ,, and u saw how it is all about price action .
I will share with u and for the benefit of many how accurately one can get his entries BASED on the full understanding of what is happening with PRICE .
Yes we also can use to our advantage some tools ( which must be consistent ,, with atleast 95 to 98% of the time ) to include them in our decision making , and i did show u that in detail .
And this is the visual of what i mean by what i said above ,, EXCEPT ,, i am NOT showing the tools i use ,, but you personally saw what i do .
This is the power of understanding the NATURE OF THE BEAST ( the market we trade ) ,,, we shall let the picture tell the story ,, and you know ,, my entries are NOT based on guessing , but rather highly fine tuned .
Hope this will help many traders out there of what can be done in any business in life .
I am NOT saying what you or anyone does is wrong ,,,,, I simply wanted to add to the hard work you do on this thread for the benefit of it.
You also know i do NOT trade the 1 mnt chart ,, BUT you know why my trades are taken off the 1 mnt chart .
Cheers

Thank you for your detailed answer. Sorry for the late reply.

I want to share a paper to everyone here in this thread.
https://papers.ssrn.com/sol3/papers....act_id=1734836.

Discussing:
- Does Foreign Exchange Intervention Create Trading Rule Profits?
- Do Cognitive Biases Create Trading Rule Profits?

"They find evidence to suggest
that these patterns have predictive ability in some markets. Lo, Mamaysky and Wang (2000) do further work along
these lines and look at the predictive ability of several commonly used price patterns." - page 9

"Data snooping, publication bias and data mining are three related but distinct problems that could tend to
produce the false conclusion that TTRs are successful. In particular, these three issues stem from the fact that it is
always possible to find ex post patterns, such as profitable trading strategies, that exist purely by chance in a specific
data set and will not exist in other samples/data sets. Data snooping is the problem that researchers will choose,
either consciously or unconsciously, to test rules already proven profitable on part or all of the previously tested data
set.8 Data mining is the tendency for each set of researchers to test many rules and to base the overall inference on
the most successful rules: Negative test results are ignored, while positive results are taken to indicate that trading
rule strategies can yield profits." - page 11

"Some researchers argue that one should test only those rules that
are commonly used in practice to reduce the problem of drawing false conclusions from data mining." - page 11

"It is almost impossible to avoid some data snooping, given that data sets and plausible rules are limited." - page 11

"Starting in the mid-1990s, studies began to consider more seriously how to confront the data snooping problem.
One way to minimize this bias is to automate the rule-selection procedure and minimize researcher input.' page 12

"Gençay
(1999) and others have similarly employed neural networks as “black-box” methods for generating trading rules
with positive results." page 12

"Perhaps the most certain solution to data snooping, data mining and publication bias is to analyze the
performance of rules in true out-of-sample tests that occur long after an important study. That is, one can test a
group of rules that were examined in studies conducted sufficiently long ago that one has enough new data to carry
out a true out-of-sample test. Neely, Weller and Ulrich (2009) employ this line of attack. Of course, this technique
has a substantial cost: One must wait years to employ it on past studies." - page 13

"Olson (2004) dynamically reoptimizes MA rule portfolios in successive 5-year periods from
1971 to 2000 and then tests these in successive 5-year out-of-sample periods." page 13

"Pukthuanthong-Le, Levich and Thomas (2007) and Pukthuanthong-Le and Thomas (2008) extend the analysis on
time variation in returns to emerging markets. They find that major currencies no longer trend reliably but markets
in newly trading currencies appear to display some profit opportunities from technical rules. This finding suggests
that traders in major currency markets have arbitraged away technical patterns but those patterns still exist in
emerging markets.' page 13

"Figure 3 illustrates the time variation in the returns to traditional rules. It shows the rolling mean annual return
to a portfolio of the set of traditional rules used in Levich and Thomas (1993): 0.5%, 1%, 2%, 3%, 4%, and 5% filter
rules, as well as MA(1, 5), MA(5, 20), and MA(1, 200) rules. The figure makes clear that the rules were profitable,
on average, during the Levich and Thomas sample, 1976 to 1990, but tended to become much less profitable during
the 1990s and 2000s. The sloping lines, which represent predicted values from a time trend model of trading rule
returns, illustrate the trend decline in profitability over time. This visually confirms that traditional MA and filter
rules had become unprofitable by the early 1990s."

conclusion:
"The authors concluded that relatively simple technical rules were genuinely profitable on major floating exchange rates for an extended period,
at least 15 years, from about 1975 to 1990. As the profitability of those simple rules became widely publicized in
the academic literature, the profitability of the rules disappeared. At the same time, more complex and less wellknown
rules retained substantial profitability." - page 14

"In an intriguing study of a non-traditional source of technical information, Charlebois and Sapp (2007) confirm the
idea that market participants can predict future asset prices. They show that information from open interest on atthe-
money options produces a trading strategy that is more profitable than traditional technical trading rules." page 14

"Similarly, Kozhan and Salmon (2010), using high-frequency data, find that trading rules derived from a genetic
algorithm were profitable in 2003 but that this was no longer true in 2008. They attribute their finding to a dramatic
rise in the volume of algorithmic trading over this period. Consistent with this explanation, Chaboud et al. (2009)
report that from 2003 to 2007 the fraction of trading volume where at least one of the two counterparties was an
algorithmic trader increased from almost nothing to 60% or more for the yen and euro against the dollar.
The examination of time variation in the returns to trading rules makes it clear that genuine returns existed for
many years and probably still exist at lower levels for more complex rules. This raises the question as to the source
of those genuine returns." page 15

"When one removes the returns on intervention days from the
technical trading return series, the mean return to technical trading is no longer statistically significant." page 17

"Intervention does not generate
returns to technical trading, but rather responds to strong trends from which technical traders profit." page 18


Conclusion:
- link order flow to technical trading signals, as one input to a trading model that combines a neural network with a
fuzzy-logic controller and finds that the model has significant predictive power. This is profitable (2010 research).
- intervention has been correlated with periods of high profitability for technical rules.

I want to let traders in the thread know that USD, oil and other instruments are correlated to one another. Please use these two sites for your own benefit:
- single vs single https://www.oanda.com/forex.../analysis/currency-correlation

- pair vs pair https://www.myfxbook.com/en/forex-market/correlation

Trading is simple. No one will believe me but I make money everyday from using 4 indicators with an SR which is a pivot.


1. See trend and SR on 1hr chart
2. See Macd cross over on 30m INTO sr
3. See RSI oversold to buy iverbought to sell on 15m
4. ENTER on 5m Engulfing bar
5. EXIT at 161 fib
to find 161 fib target draw FROM bottom trend line to SR (if shorting) OR FROM top of trend line to SR (if going long)

very simple. do this once a day or month whenever you have time.

You can thank me later.

BUT you must have a macd and WAIT til
it crosses over.

RSI

Very nice. Question, how do you define the trend on the chart exactly?

The MMM ebook is about the Market Maker Method.

- Find stop hunts, M’s W’s, Trend Runs, MYC’s, 200 Bounce, Shark Fin Long/Short on a single pair. If you can’t see it in hindsight, you will never see it in foresight.
- patterns:
1. The beginning of the season (quarterly)
2. The beginning of the week (Sun/Mon)
3. The beginning of the day
4. The beginning of the session
5. The end of the session
6. The end of day
7. The end of the week
8. The end of the season.

Who stop hunts?
The liquidity providers: Goldman.. JP Morgan.. BOA.. BOE.. ECB.. Not your broker.

Strategy:
- the correct thing to do is either have a wider stop or wait for a stop zone to get tested at least once before entering.
- track the DOM and order flows which are the determiners of where price moves to
Manipulation comes in many forms: spoofing, wash trading, pump and dumps... iceberg order manipulation.

The Forex market is comprised of people. Retail traders are manipulated every single day, you don't need an order book to manipulate people, you can do it purely with price. Break out traders.. s/r traders.. news traders.. indicator traders.. they are all willing participants and the dealer's know exactly what they are doing, where their orders are clustered, and they use it to their advantage. For proof, look at the Libor rate fixing scandal.

MMM strategies:
https://www.forexfactory.com/showthread.php?p=1998963
https://www.investopedia.com/article...tophunting.asp
https://www.tradingview.com/chart/EU...-ITS-NOT-SAFE/