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Higher Edge within a Single Candlestick

  • #621
  • Sep 27, 2017 5:20pm Sep 27, 2017 5:20pm
Quoting hanover
{quote} Thorp is a genius. His book Beat The Dealer was one of many that I read when I was tinkering with blackjack during the 1990s. There's an interesting article about Thorp and his buddy Claude Shannon here, which among other things states that they "also considered building a computer for blackjack, but Thorp says he could already count so well that it didn't seem...

goodday mr over, from my view i sense that u are an experience coder with forex knowledge. i would like us to work together permit me to use that word WORK bcos i have abt 3 systems to code into ea, i need ur help to code at least one for me . when i forward test that i will show u result then to do the others

Thank u
  • #622
  • Sep 27, 2017 5:30pm Sep 27, 2017 5:30pm
Quoting RondaRousey
{quote} You can find an edge in events, occurrences, black swans that you cannot control. Noobs think you need to control something to be profitable. Not necessarily. The more out of control something is, the more profitable. Believe it or not
Events, occurrencies etc are opportunities, edge is something different which allows you to make profits with consistency
  • #623
  • Edited 7:22pm Sep 27, 2017 5:41pm | Edited 7:22pm
Quoting RondaRousey
{quote} You can find an edge in events, occurrences, black swans that you cannot control. Noobs think you need to control something to be profitable. Not necessarily. The more out of control something is, the more profitable. Believe it or not
I reckon this may be a subtle point but having control over risk virtually guarantees that under a non Gaussian distribution with fat tails...that armed with the Law of Large numbers, your chances of profit increase provided you let your profits run.

I see where you are coming from with your reference to Black Swans...but to exploit them...you need to be coming from the correct side of them as by definition they are unpredictable with a magnitude that is not quantifiable during the event.

To be coming at them from the right side....you always need your risk management in place. An open ended profit condition on the other side however means you can exploit the positive aspects of the event that might come your way.

Your risk is constrained but your profit potential is undefined....hence the reason for the variability of return distributions from applying the same strategy at different times.
  • #624
  • Sep 28, 2017 12:41am Sep 28, 2017 12:41am
Quoting Copernicus
{quote} Hehehe. Science is still working today. We still only have models of reality and no 'real' truth statements. What were supposed 'truth statements' in Newtons day turned out to be simply a narrow bounded condition of a broader more encompassing model that was applicable to a wider domain (namely the theories of special and general relativity)...and now they might even be supplanted with a more encompassing theory that merges the domains of quantum theory and relativity. Not wrong....but simply insufficient in their application to a wider...
All models are essentially wrong, but some are useful.
-- George Box
No greed. No fear. Just maths.
  • #625
  • Sep 28, 2017 6:30am Sep 28, 2017 6:30am
Question for CP and others: Why should I let a trade go against me at all?

Okay so a little context. I scalp or more to the truth I want to scalp successfully because I cannot see a more potentially profitable and low risk method. Logically it makes the most sense to me and that is with the prerequisite that you have an edge. That's a really big if but we must accept that if you don't have an edge you should not even be trading. You should be working on getting one. So you cannot predict the future but you can control your entry point and respond to every single tick you receive after entry to manage the trade(decide to hold or close). I have done a two week scalping test on a real account because I didn't want some bogus no slippage results etc. and I was very profitable. More profitable that I ever have been before.

I did that test a month ago and have since been constantly thinking about two things. One is why should I let a trade go against me at all? The main goal was to minimize risk so you can't give a trade a bunch of room and hope it comes your way. Because sometimes it doesn't and sometimes it does. But even when it does that is a bad trade. There was no reasoning beyond "well maybe it will. Price chops and changes all the time" to hold it. During the two week test I traded with a more moderate stop like 50-100 points and with an extreme stop of as little as 15 points. Anyone who says that's idiotic etc just relax because I was slightly more profitable with a tight stop but I had far less "bad trades" trades where I started hoping. Though a very tight stop is not really the practicle answer to mitigating risk. Obviously it's very easy to just get whipped out and then watch it go your way. There are a few things that I have not really learnt from trading with a tight stop but have confirmed what I already thought through this test that I won't go into here since it's related to entry.

I constantly kept getting into this conundrum: A trade would be against me not so much maybe 20 points + commission and my stop would be 50 - 100 points from entry and I couldn't come up with a good reason not to just close it out. And most of the time I would. The probabilities at that point of it breaking even or going into a greater loss are not favorable. If you have a 65% chance of hitting you stop and losing for example 50$ and a 35% chance of making $0. You would never take that bet. So why not close?

People will say something like price action etc. "feel it out" I'm sorry but this is not an edge even if you did make money. You need a read edge, some method or way to be right enough that you end up net positive and also know that it is true and real. It is important to very honest with yourself to know if you actually have an edge. I have traded profitably for a couple years now. I NEVER HAVE HAD NOR DO I NOW HAVE AN EDGE. And when I say profitable I'm not talking about not losing money I'm actually talking about enough to live of. I am still within the range of results you would expect from people who have no edge.

I've rambled a bit but is there any logical reason not to cut losses super quickly while allowing for present volatility?
  • #626
  • Sep 28, 2017 6:44am Sep 28, 2017 6:44am
Quoting VincentGallo
Question for CP and others: Why should I let a trade go against me at all?
I think you are spot on V for certain types of edge exploitation such as scalping. I also apply the same principle to swing trades under momentum in that I define a future 'narrow' trajectory based on defining the strength and other characteristics of current momentum and therefore force an outcome of profit if that same momentum signature is maintained for a period of time into the future...or a very small loss (always smaller than my initial stop) if the characteristics of momentum become less favourable. The edge I am exploiting in my particular strategy is simply breakout momentum trades and not the principles of say trend trading that need different constraints to price trajectory to capitalise on the underlying assumptions of trend following.

For example, if I was trend trading, I can be a bit more lenient in my applied constraints to future direction as an edge in trend following relates to the assumption that auto-correlation exists in a time series at non-predictable but separated time intervals. Under this assumption you therefore need to relax your constraints and let the trade breathe to an extent otherwise you will not be in a position to take advantage of trades that matter....namely those big winners that pay for all those small losers.

.....what I think we might find is that your method of edge exploitation needs to be tailored for the type of strategy you deploy......and hence the need for rigorous back-testing to at least be in a position to accept or reject the hypothesis embedded in the strategy. :-)
  • #627
  • Edited 7:00am Sep 28, 2017 6:45am | Edited 7:00am
Quoting VincentGallo
I've rambled a bit but is there any logical reason not to cut losses super quickly while allowing for present volatility?
many do trading "wrong" or much more complicated then necessary. you have to take a look at the equqity and in your trade as it is open from this moment you look at it (depends from trading system). you decide each moment will the trade has more chance to go in correct direction or against. all the loss and win the trade has is already calculated inside the equity. so when you look at the trade as a trade you open at this moment (without the fees of spread and half turn commission, because its open already and fees already calculated in) you simple decide will you hold your trade at this moment or not. and when you decide this, you simple can answer your question, will you close the trade more early or not.

at the beginning in trading, people think in definitions like a trade has a SL and TP and let in run to one of this, later you start closing it manuelly between this points. on the end of the road you see the trade in any time as new opened trade and you decide what to do with it. ofcourse your trading systems should bring results so you can decide what to do, if you can decide any new hour (because you trade in hour chart with candlestick informations) then you dont decide any minute what to do with the trade, yout do it any hour with your new informations. so your trading system tells you when you decide what to do with because of the new information and whould you open now a order (with costs of halfturn commissision) , then the order should be let open - or you should open no order, then close the order - or you should open opposite direction, then you need to close the order and recalculate for fullspread and commission if this opposite trade is still good.

ofcourse a trading systems should be always added by fundamental news and unexpected news event, so it can react to this all the time with same question, would i open trade in this direction at this moment or not.

trading can be so easy, many try to make it so complicated for whatever reason.
  • #628
  • Sep 28, 2017 8:16am Sep 28, 2017 8:16am
Do you really think that professional traders make all those complicated calculations while they are trading?
How much time have you already spent studing TA, indicators, algorithms, momentum, candlestick patterns and so on, and what results did you get?
If you want different results you have to do different things.
Trading is simple, your mind is not, this is the big issue; but once you learn to "think different" you finally will see the edge, that is right under your nose.
Time ago i've read an article written by a former Goldman Sack's trader, now retired after a 25 years career: he said losing in Forex is that difficult.........

BTW Hello Copernicus, nice to read you again; I hope everything is ok with you
  • #629
  • Sep 28, 2017 8:25am Sep 28, 2017 8:25am
Quoting strongtrader
Do you really think that professional traders make all those complicated calculations while they are trading? How much time have you already spent studing TA, indicators, algorithms, momentum, candlestick patterns and so on, and what results did you get? If you want different results you have to do different things. Trading is simple, your mind is not, this is the big issue; but once you learn to "think different" you finally will see the edge, that is right under your nose. Time ago i've read an article written by a former Goldman Sack's trader,...
yes, you make many complicated calculations, but most of time you program it one time in a table board so you have all you are interested in in 1 place. extrem time saving.
  • #630
  • Sep 28, 2017 8:43am Sep 28, 2017 8:43am
Quoting hanover
{quote} {quote} But wasn't it Einstein who said that the only way to beat a roulette table was to steal from it? ...
I didn't make any statements about whether it's possible or not.
(Even if it would be, I prefer to focus on the music rather than on the noise in fx/commodities...)
I reacted because it was painful to watch people who argued with opponents entirely constructed out of straw.

Cheers,
k
  • #631
  • Sep 28, 2017 8:45am Sep 28, 2017 8:45am
Quoting dukas_trader
{quote} yes, you make many complicated calculations, but most of time you program it one time in a table board so you have all you are interested in in 1 place. extrem time saving.
Nope, you have to avoid all that is complicated because trading is simple.
Do you know the basic rule? K.I.S.S......Keep It Simple and Stupid
  • #632
  • Sep 28, 2017 8:49am Sep 28, 2017 8:49am
Quoting strongtrader
Time ago i've read an article written by a former Goldman Sack's trader, now retired after a 25 years career: he said losing in Forex is that difficult.....
Just out of curiosity...Can you find the interview or do you remember his name?
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
  • #633
  • Sep 28, 2017 8:58am Sep 28, 2017 8:58am
Quoting michisuperfr
{quote} Just out of curiosity...Can you find the interview or do you remember his name?
This is a smart question.......I can tell you something better: he is here in FF with a detailed thread.......
  • #634
  • Sep 28, 2017 9:10am Sep 28, 2017 9:10am
Quoting strongtrader
{quote} Nope, you have to avoid all that is complicated because trading is simple. Do you know the basic rule? K.I.S.S......Keep It Simple and Stupid
:-).
but why i should not have big wins with some complicted double target calculations?
why i should not calculate until i start to change the charts and my own signals? try this both calculations simple, you will have no chance. and this are only 2 examples.

i dont know, maybe when you start you are correct, but i like to calculate all and will not be surprised against kiss. or it will kiss my ass on the end ;-).
most is simple math in market.

but after programming most in tables its extrem simple, starting to get the important information is time investing, but later simple as your kiss, just take a look at a table for all informations. i have not seen many not using such trading style, but i know only maybe 200 people directly from my 20 years, so its no extrem big amount of people. many wakes can find to rom, but i like the easy one with lowest risk and biggest win for this.
  • #635
  • Sep 28, 2017 9:13am Sep 28, 2017 9:13am
Quoting michisuperfr
{quote} Just out of curiosity...Can you find the interview or do you remember his name?
i would see this too, because losing is simple, just open and close many trades in the day very often without any trading system. you will get killed by the spread so fast. but this should he normally know, so maybe it was only wrong written. for 95% of people in forex this sentence , that losing is so difficult, would be pure irony.
  • #636
  • Sep 28, 2017 9:18am Sep 28, 2017 9:18am
Quoting dukas_trader
{quote} :-). but why i should not have big wins with some complicted double target calculations? why i should not calculate until i start to change the charts and my own signals? try this both calculations simple, you will have no chance. and this are only 2 examples. i dont know, maybe when you start you are correct, but i like to calculate all and will not be surprised against kiss. or it will kiss my ass on the end ;-). most is simple math in market. but after programming most in tables its extrem simple, starting to get the important information...
Sorry, i'm having some difficulties to understand what you wrote; can you please try to be clearer? thks
  • #637
  • Sep 28, 2017 9:19am Sep 28, 2017 9:19am
Quoting strongtrader
{quote} Sorry, i'm having some difficulties to understand what you wrote; can you please try to be clearer? thks
ok, can you tell me more in detail about what topic i shall write it more clearer? was every part not possible to understand?
  • #638
  • Sep 28, 2017 9:45am Sep 28, 2017 9:45am
Quoting dukas_trader
{quote} ok, can you tell me more in detail about what topic i shall write it more clearer? was every part not possible to understand?
If you don't mind I'll do the opposite, it is simpler.
"i dont know, maybe when you start you are correct, but i like to calculate all and will not be surprised against kiss. or it will kiss my ass on the end ;-).
most is simple math in market."
This is clear
  • #639
  • Sep 28, 2017 9:53am Sep 28, 2017 9:53am
Quoting dukas_trader
{quote} i would see this too, because losing is simple, just open and close many trades in the day very often without any trading system. you will get killed by the spread so fast. but this should he normally know, so maybe it was only wrong written. for 95% of people in forex this sentence , that losing is so difficult, would be pure irony.
No, for the majority that sentence is UNREAL, NOT COMPREHENSIBLE, but this is the crude truth.
So, this is a clear example of what does it mean to "think different", open your mind to whatever is out of your comprehension and try to conceive what appears to be unconceivable, because over there lies the truth and the doors to a successful trading will open to you.
  • #640
  • Sep 28, 2017 9:56am Sep 28, 2017 9:56am
Quoting strongtrader
{quote} If you don't mind I'll do the opposite, it is simpler. "i dont know, maybe when you start you are correct, but i like to calculate all and will not be surprised against kiss. or it will kiss my ass on the end ;-). most is simple math in market." This is clear
last part was about even complicated things can be simple, when you let calculate it by computer and presented the results in a table (in what ever trading platform or own program).

first part was about, there are important calculation (like this 2 examples), that are not easy done, but why i should not do this important stuff that improves trading extrem, only because its complicated calculated? most you do one time programming, then its simple, because all complicated is inside the program part.

now possible to understand?
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