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Statistical proof of the 90% rule

  • #41
  • Jul 30, 2017 5:50am Jul 30, 2017 5:50am
Quoting MoneyZilla
Yes, you are quite right about that. The problem comes from knowing the direction, cause a simple reverse, simply does not work, too. Timing is crucial. When they will hold it? For how long, exactly? When is the next moment of movement? It looks like chaos, but it is not a chaos. Not at all. The rate movement is based on obvious, ingeniously smart and intelligent mathematical system and at the end (might be some day, week, month or a year), everything comes down to zero... Catch that timing and what you have suggested will work exactly as...
When you talk about timing, and an "ingeniously smart and intelligent mathematical system", I suspect that what you could mean is a system that somehow (and possibly inadvertently) finds areas of unusually low (or high) liquidity, as this is an underlying cause of bias.
  • #42
  • Jul 30, 2017 6:37am Jul 30, 2017 6:37am
Quoting hanover
{quote} Conclusion: varying the RR of your trades has no effect on overall expectancy.
Very scientific explanation! Bravo! I wish i could explain things so well...

All comes down to zero. Buys equal sells and sells equal buys. It is one big zero at the end. Therefore following the rate at every curve will always be very risky business... which will have (almost) same results.

My cousin, being hundred times better mathematicial, named the rate system as 'cubic'. My original definition was a 'square'. But because I am weak at mathematics I accepted the 'cubic' definition. Now I start thinking, maybe my description (a square) to a be better name instead?

A year ago, I have started to count the candles. Buy and sell candles, on all time frames (TF), were always equal as number, and almost identical as size. No matter what the TF is.

Shortly after I have started counting buy/sell orders. Something almost identical as counting thicks, yet not exactly the same thing. My cousing created a very complex system for sorting the data output out properly. I still do not understand this system... It was not a helpful system for any of us. Buy and sell orders were equal there, too. They (buy and sell orders opened) came down to a zero, as a final result!

A year before I decided candles and orders to be unrealiable source of information, although both came down to zero, which was very fishy! I examined the squares, which killed all my grid based eas. Later I found out the same squares killed my candle based strategies, as well. And not only! I even had strategies based on Moving Averages (what a shame, honestly!) and Trend Lines...

Few months before, when the first results pop out, my squared also came down to zero... My whole world was sinking. Very fast.

Although, it is quite visible how they kill you, there is no an automatic solution. At least I cant see one. All comes down to zero!

In trend times, limit strategies are in a heavy DD. At range times stop strategies are in a heavy DD.

It really does not matter what one will trade. Stop or limit? Same shit is about to happen. Meanwhile, there are no time patters.

So, hanover's explanation is super good! It is confirmed by my three systems. Of which, only the 'cubic' one (or the 'square' one) offers an edge, without multipliers in use. In between the 'squares' or 'cubes', there are dry stones one can step on and this is how one can cross the fast traders killing river, by jumping from stone to stone.

As a side effect, the next direction movement (very short term) is announced quite early and a simple zig zag indicator on m1/m5 will tell you exactly where the price it is heading to, maybe up to 100 pips max. I am speculating about the pips value, cause not really good at charts. My charts are set with black candles on a black background, so I cant see anything on the chart, really... except the 'squares' I am only interested at.

Sorry for the long post. I just wanted to use the scientific explanation made by hanover to confirm everything he said is 100% so... Hope you will forgive me... :-)
Maadik Hugiis. IQ 69.
  • #43
  • Jul 30, 2017 6:55am Jul 30, 2017 6:55am
Quoting hanover
{quote} When you talk about timing, and an "ingeniously smart and intelligent mathematical system", I suspect that what you could mean is a system that somehow (and possibly inadvertently) finds areas of unusually low (or high) liquidity, as this is an underlying cause of bias.
I am 100% honest right now. I do not understand a thing about the liquidity. A German pro-trader I used to communicate with, once told me, the pros are using limit orders. They call the rate with fat limit orders. It is as simple as that.

The stepping stones I use are all located at the edges of a movement and at the last line, formed by the final movement. It is a very simple method. The simple one I have ever created. All complex methods got killed, eventually. So, honestly, I just do not know how to explain it. A square or a cube is the only thing that crosses my otherwise empty head.

I see how exactly they are doing it, except the timing part. This I cannot see. Only if i could see this, every next move and each movement pip size can be easily predicted.

For example, I see the rate is to travel 300 pips from the most heavy SL level. This very same SL level has ~300 pips in accumulated SLs. And this thing repeats and every next range. In between two ranges. The harmonica pips in a range equals the size of the next movement, in between two ranges or consolidation you call it here at FF...

Still, i can bet my life on this: nothing has ever changed for the last 8 years! Nothing! Except speeds. And it is natural to have different dayly distances due to different prices? Right? 1.40 and 1.04 cannot provide the similar daily pips distances. This is the only 'change' and it is not a change, at all. It is just different speed...
Maadik Hugiis. IQ 69.
  • #44
  • Jul 30, 2017 7:14am Jul 30, 2017 7:14am
Quoting MoneyZilla
{quote} the cubic system decreases the forward movement by 50%. tp10 / sl10 ~ 50% / 50% tp20 / sl10 ~ 25% / 75% tp30 / sl10 ~ 13% / 87% tp40 / sl10 ~ 7% / 93% tp50 / sl10 ~ 4% / 96% tp60 / sl10 ~ 2% / 98% tp70 / sl10 ~ 1% / 99% i am sorry to disappoint you, but i have scanned 25 pairs for the last 8 years and they all show similar data. it does not matter how big the cube is. everything is proportional. the base cube size really does not matter... EDIT: also, the pair does not matter. everything is the same on all pairs. many will disagree with...
if this is true, then trade reverse n for each 100 trades u will have
99 * 10 pips = 990 pips profit
1 * 70 pips = 70 pips loss
Net : 990-70 = 920 pips - trading costs [spread+comission]

right?
WaBaS Where are Buyers and Sellers
  • #45
  • Jul 30, 2017 8:04am Jul 30, 2017 8:04am
Quoting hanover
{quote} Good link. I reached the same conclusion some years ago, as follows: First, ASSUME that (everything else being equal), price has an equal probability of rising 1 tick, or falling 1 tick. Then you can simulate this by flipping a coin, where heads represents a 1 tick rise, or a win on a buy trade; and tails a 1 tick fall. Now, suppose you set a TP of 1 tick, and SL of 1 tick (a 1:1 trade). Then, to win, all you need to do is flip one head, for which the probability is 50%. Flip tails first, and price hits your SL (you lose). Now, suppose you...
"At 2:1 it is (33% x 2) / (67% x 1) = 1.
At 3:1 it is (25% x 3) / (75% x 1) = 1.
At 4:1 it is (20% x 4) / (80% x 1) = 1.
And so on."

If market would move random it could be correct. however its not.
Trending markets are not random. randomness is in d noise not in d main moves.
WaBaS Where are Buyers and Sellers
  • #46
  • Jul 30, 2017 10:45am Jul 30, 2017 10:45am
Quoting Ted1983
When faced with all those posts, "90% of traders fail", you start to think it can't be true. Afterall, "a coin toss can be right 50% of the time" (the second most popular cliche on these boards). But I have found evidence of the truth behind this statement, on Oandas website! Here is a graph showing the ratio of longs to shorts on USD/CAD from around May 19th. http://fxlabs.oanda.com/cgi/fxlabs.pl?id=8 It shows that their customers have been long this pair over 80% of the time consistently! absolutely amazing!
In Forex is well known rule: 90 90 90, it means 90 percent of retail traders will loose 90 percent of their capitel in 90 days. I have been in forex broker business since 2010 and its reality. And the reason, why lot of brokers are making much more than spread, they can bet against their clients, because they know, that most of them will loose, its simple math.

Main problems of most retail traders, which i see is luck of education, bad money management and they dont have any rules.
My blog: forex-scalping.com | Exponencial money management is the key!
  • #47
  • Jul 30, 2017 10:51am Jul 30, 2017 10:51am
Quoting mr.brown
{quote} if this is true, then trade reverse n for each 100 trades u will have 99 * 10 pips = 990 pips profit 1 * 70 pips = 70 pips loss Net : 990-70 = 920 pips - trading costs [spread+comission] right?
money management 10% chances to win
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  • #48
  • Jul 30, 2017 2:51pm Jul 30, 2017 2:51pm
Quoting mr.brown
If market would move random it could be correct. however its not. Trending markets are not random. randomness is in d noise not in d main moves.
You're correct (apparently you didn't read proviso #2 in my earlier post). I agree that markets are not a completely random walk, I gave some potential symptoms of non-randomness in myth #22 here.

Quoting MoneyZilla
I do not understand a thing about the liquidity.
Many thanks for your comprehensive reply.

A while ago there was a member who presented what he called the 'similarity' system. He claimed he could predict whether price could reach a certain level with X% certainty before a specified future time (which I believe is impossible, because just for starters, any number of orders can be added or deleted in the interim), but he did succeed in using a complex math-based formula to identify zones of imbalance (I didn't follow his work that closely, but I think they got called TZs or RZs). Given the way that markets operate, I suspect that this had a lot to do with vagaries in liquidity.

Would like to comment more, but I have a really busy week.
  • #49
  • Jul 30, 2017 3:48pm Jul 30, 2017 3:48pm
Quoting mr.brown
{quote} if this is true, then trade reverse n for each 100 trades u will have 99 * 10 pips = 990 pips profit 1 * 70 pips = 70 pips loss Net : 990-70 = 920 pips - trading costs [spread+comission] right?
That is incorrect math. This would work, if you know the direction. Since you do not know the direction the rate is going to, I suppose, you will never get closer to the suggested values by you.

And NO, even if you knew it, it won't happen as described. Tomorrow I will show you a screenshot of a live market scan. The situation is even more desperate, I would describe it... :-)
Maadik Hugiis. IQ 69.
  • #50
  • Jul 30, 2017 4:10pm Jul 30, 2017 4:10pm
Quoting MoneyZilla
{quote} That is incorrect math. This would work, if you know the direction. Since you do not know the direction the rate is going to, I suppose, you will never get closer to the suggested values by you. And NO, even if you knew it, it won't happen as described. Tomorrow I will show you a screenshot of a live market scan. The situation is even more desperate, I would describe it... :-)
"but i have scanned 25 pairs for the last 8 years and they all show similar data. "

I dont give a f*ck if its cubic or shperical, u gave d numbers
WaBaS Where are Buyers and Sellers
  • #51
  • Jul 30, 2017 4:21pm Jul 30, 2017 4:21pm
Quoting mr.brown
{quote} "but i have scanned 25 pairs for the last 8 years and they all show similar data. " I dont give a f*ck if its cubic or shperical, u gave d numbers
That is so, but you should think a little, before making your "calculations". Thinking is supposed to come before acting, regardless whether you give a fuk or not... Thinking should go first, mate! Fuking follows... thinking!:-)))
Maadik Hugiis. IQ 69.
  • #52
  • Edited 4:55pm Jul 30, 2017 4:43pm | Edited 4:55pm
Quoting MoneyZilla
{quote} That is so, but you should think a little, before making your "calculations". Thinking is supposed to come before acting, regardless whether you give a fuk or not... Thinking should go first, mate! Fuking follows... thinking!:-)))
u have no single clue about what u r talking
probably not a trader too
WaBaS Where are Buyers and Sellers
  • #53
  • Jul 31, 2017 5:25pm Jul 31, 2017 5:25pm
You know how to kill the mood !
Good Trading
  • #54
  • Aug 1, 2017 4:58pm Aug 1, 2017 4:58pm
I took this screenshot about 4 years ago from TradeStation's disclaimers, a US broker. About 30% of forex traders won while about 60% lost. They stopped offering forex a year later. The US government has shunned spot forex for retail traders. Pitty. Biggest market worldwide.
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  • #55
  • Jun 3, 2025 6:12pm Jun 3, 2025 6:12pm
.
  • #56
  • Edited 6:59pm Jun 3, 2025 6:17pm | Edited 6:59pm
Quoting AlexC
I took this screenshot about 4 years ago from TradeStation's disclaimers, a US broker. About 30% of forex traders won while about 60% lost. They stopped offering forex a year later. The US government has shunned spot forex for retail traders. Pitty. Biggest market worldwide. {image}
in the market 80% of traders rely more on expectation rather than on reality,
they trade own hopes, meanwhile Market Maker trades their money ... (in his pocket)

The Market Wisdom is quite simple
- those who are in majority (in their money bets) are to share with those who are in minority

It is an axiom to preserve the market from bankruptcy
otherwise an exchange will be in dept to majority

the most of the traders do not realise this simple true
the price ALWAYS goes against the crowd ... but crown
  • #57
  • Jun 3, 2025 6:32pm Jun 3, 2025 6:32pm
it is wise to follow train rather
than hope that it will reverse or
trying to stop it by marting-ape (coz it runs against one's expectations)
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  • #58
  • Jun 3, 2025 6:49pm Jun 3, 2025 6:49pm
Rely on what you see
not what you want to be

Market is based on money not on a moving average

The nature to be comanded must be obeyed
Francis Bacon
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  • #59
  • Jun 3, 2025 7:11pm Jun 3, 2025 7:11pm
Quoting mr.brown
{quote} "but i have scanned 25 pairs for the last 8 years and they all show similar data. " I dont give a f*ck if its cubic or shperical, u gave d numbers
the world financial system is grounded on $$$
the whole foreighn exchange is a pure mechanical structure
in which $$$ is presented on one side of the scale
the other side is held by the rest of the world currencies
all 28 pairs work as One
a screen proof will not to be posted /// it is too killing from the point of Math view
  • #60
  • Jun 3, 2025 7:27pm Jun 3, 2025 7:27pm
Quoting yawyz
{quote} in the market 80% of traders rely more on expectation rather than on reality, they trade own hopes, meanwhile Market Maker trades their money ... (in his pocket) The Market Wisdom is quite simple - those who are in majority (in their money bets) are to share with those who are in minority It is an axiom to preserve the market from bankruptcy otherwise an exchange will be in dept to majority the most of the traders do not realise this simple true the price ALWAYS goes against the crowd ... but crown
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