Higher Edge within a Single Candlestick

Like I said, I'm leaving.
Just tying up loose ends.

k

If CrucialPoint leaves I leave. he's the only enteraining guy left on this forum.

You are seduced by gamblers fallacy.

A bit like the devious allure of perpetual motion machines.

The concept is always provided but the verifiable proof is ALWAYS absent.

give to caesar what's caesar's

he discovered TRENDS

I agree. you go first. dont forget entry tp and sl. talk is cheap indeed

so who is this former goldman sachs trader, you forgot to mention it or at least his thread.

thanks but no thanks. i was specifically asking this to strbac because of the chart he posted, since i do something a lil similar.. If you do trade the same as he( which i doubt), please post the chart with entry and exit. Not really interested in how many pips are made really as everybody could post some daily profit, im more interested with the logic behind those trades

Because 1-2-3 and HOLO are winning systems, too. My response was to their question regarding the use of range.

Can you give a few tips on what to study please ?
No mater how subjective it is, just anything...

you can place a SL by your broker, when you have a good broker, who is not interested in stopout your orders. or use api connected SL, so all is in your frontend, but a backup SL in broker site (spread saved ofcourse) is always a good way. you dont have to close the order with the SL, sometime years this SL will not hit one time, but is good feeling to have one for many possible cases.

What is interesting about randomness and is still puzzling mathematicians today is the following:
1. There is no 'true' randomness present in any classical system be it coin tossing, roulette wheels, price action of price which is a binary variable. Even random number generators in our classical world all require a 'seed' to generate differences with each run of the program. All classical systems are fundamentally deterministic.
2. True 'fundamental' randomness can only be evidenced in quantum systems which are 'fundamentally' indeterminate.

If you like a heavy read on the distinction between classical versus quantum randomness to explore the differences then be my quest.

If you have a fundamentally indeterminate system, any derivative output of randomness by definition must be random (eg. an equity curve) associated with trading a 'truly' random price action pattern.

Provided we have this understanding as a base to our discussions we then avoid the heated random versus non-random argument. The markets are fundamentally classical given that a tick is a binary outcome of 'yes/no' as opposed to a quantum superposition of states.

At the deepest level where we can extend our classical assumptions, the *permitted* Eigenstates of a superposition guarantee that a classical outcome is 'always predictive' and hence why physicists can use a Schrodinger or Dirac equation to predict a classical outcome from a quantum state.

On this assumption, markets (given that they are complex semi-open systems which are non-stationary [dynamic] and exhibit transitional emergent symptoms) can exhibit states that look like a random outcome or states that are the antithesis of this outcome. Markets can be therefore said to be 'pseudo-random' and there lies the big difference that allows you to find the exploitable edge.

By definition a 'truly' random market is 'truly non-predictive' and you cannot exploit them but a non-random deterministic system is 'always exploitable'. The question is whether the method of exploitation is worth the candle (the effort). Thorpe and Shannon demonstrated how any roulette wheel is exploitable from these principles.

Tom Basso and Van Tharpe exhibited that with a random entry and a random exit with fixed money management can be used to exploit an edge from a real market (for a decade in the late 90's). That is because the real market was 'pseudo random'. Using the same approach today is a bit more difficult as the characteristics of the 'pseudo random' market have become even more efficient....meaning that the defined exploitable edge using the applied system is less than it was.

Casinos are very aware of the distinction between the theory and the reality and hence add additional variables into the equation such as table limits, house numbers etc. and shuffle the odds further in their favour to extract the alpha available in this 'pseudo randomness present in the classical reality'. It still means that for those pundits out there who like a flutter or for those quants who like a theory, the opportunity for edge exploitation will always be there in a classical system.

There is a distinct difference between intractability and impossibility. Technology with applied mathematics can overcome the former whereas the mathematics demonstrates that irrespective of the applied technology, you simply cannot overcome the latter. It is only in the quantum domain that you meet impossibility head on. In the classical domain and that is where you and I like to reside....'nothing is impossible'. :-)

An excellent a priori 'classical' basis to adopt in how you should seek to exploit a 'real' 'pseudo-random' market is in adopting the assumption that the market is characterized by processes of random walk and levy drift. This allows for both random and non-random outcomes to be present where your method of exploitation attacks the 'drift'. In other words you can sit on the fence and say that neither the 'random camp' nor the 'non-random camp' are wrong. They are both right but just incomplete. What you want to worry about are those out there who in Wolfgang Pauli's terms are 'Not even wrong'. :-)

I always wondered if it was a certainty that any play had no edge why then does casinos place limitations,restrictions and obstructions of various kinds in our path. This is music to the ears that I might not be that crazy after all.

Never say never S. You certainly aren't crazy :-)

The casinos are shifty blighters and cunningly devious in the barriers they deploy to remove forms of exploitation. In the late 80's I used to play a Martingale progression with a mate of mine in our lunchtimes on Roulette. I would play red and he would play black both with a Martingale progression and then we would split the proceeds after lunch. We would have gone a bit further if there had been no table limits as this would force you to the high roller room if you wanted to continue the progression....and this was beyond our humble means. We understood the ultimate weakness of the Martingale but were able to extract a few thousand from the Treasury casino in Brisbane (Brisvegas) for our lunchtime efforts before we called it a day.....thank goodness.

If I wanted a long stint playing at the roulette table for a night out in town I would always play Trioplay which was an excellent progression system to apply where your death was by a thousand cuts over a lifetime.....however my other mate was booted from Jupiter's casino on the Gold Coast for applying this strategy over a period of time. Unfortunately the house always has the call in who stays and who goes.

FXCM's Trade Station II. I really miss their awesome charting platform. I can no longer trade with them in the USA :-(

Hi Veefx, you might can try doing what I did. I opened a FXCM UK demo account so that I could still use the Trade Station II platform. I use another broker to place actual trades but use TS 2 for trade decisions. I will place a trade on the demo account every now and then just so it want get cut off.

Hello, ladies and gentlemen,

It's been quite sometime, I'm glad to see that this community is still going strong, and a bit saddened as some of my old discussion pals have disappeared, I wish them all the best.

I thought I'd stop by to share my two cents on this Thread. After reading through it, unfortunately I see that not everyone is taking Crucial Point's posts seriously, in other words they're not investigating his statements thoroughly enough (do note, I say this in regards to a handful of traders on this thread and not everyone).

There are several statistical facts that have been shared by CP and by a few other users here that shouldn't be over looked by those of you who are aspiring traders. Even the few that have mentioned good statistical facts, are unaware of what to do next with them. I would suggest this is where you put conventional thinking aside, and think outside of the box. Below I will mention a simple fact followed by it's relevance to trading, and finish off with another simple phenomenon followed by it's relevance to trading.


In regards to the game of chance being discussed earlier here are my two cents, I'm sure all of you know that:
In Roulette there is a 50/50 chance of the ball landing on black or red (we will ignore the house edge "00" for now.)

If a number of casino patrons walked into a casino, placed their bets, and then left after sometime (time here is negligible) it can be said that approximately half of them would have lost, or made money.
Now consider this:
With a Random system an individual CAN make money. That is a guarantee.
With a Random system an individual CAN lose money. That is also a guarantee.
The chance of making money or losing money is of course 50/50.
Would you want to live off of this type of chance, definitely not.

Now the casino, having needs of their own, add in the house edge, the famous "00"
This guarantee's that regardless of how many people enter their casino to play Roulette, or how long they stay, the casino will always be making money given enough time.

So how can we relate the above simple facts to Trading the Markets? (Forex, or Stocks, any product really...)

The Markets are NOT Random. If an individual can make money in a game of Roulette with it's 50/50 chance, then they can definitely make money trading the Markets which are Not Random, they are mostly Heavy Tailed, some products are even Thin Tailed. (for those of you who are unfamiliar, simply search up "Heavy Tailed Distribution in the Markets" to educate yourself).

You can't make a living off of Random Data once the house edge is factored in, be it the casino's "00," or your trading broker's spread+commission.
But as I mentioned before the Markets are not Random and thus can be profited from even after the spread and commission have been factored in.

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So lets make things a bit more interesting, how many of you will get this right...

So here's something to ponder, it may seem off-topic, but bear with me:
If it is raining for one unit of time, the probability of it becoming sunny over the next unit of time is:
A. Greater than the likelihood of it continuing to rain?
B. equal to the likelihood of it continuing to rain?
C. Less than the likelihood of it continuing to rain?
D. other.



Take a moment to answer the above, remember your answer then continue reading below:


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The answer: Precipitation has Heavy Tails (feel free to google this)
So the probability of it continuing to rain is greater than it becoming sunny (Simple Answer was C.)
So how many of you got C?
BUT here's where it gets interesting depending on the time period used to analyze the previous statement you would end up with different results, in other words the answer to the above is dependent on the period of time used, time changes the answer! The actual answer is "D. Other"

Example:
While looking at if it will continue to rain over the next period of time:
- using 1 second as the period, it is very likely that it will continue to rain over the next second, and over the second following that, and so on.
- using a larger period such as 6 hours and this heavy tailed phenomenon becomes less apparent, waiting just 2 units of time:
(2 units of time multiplied by 6 hours = 12 Hours) and the chances of it having continued to rain is almost random, but still not quite so.
- How about 1 week, if it's raining right now, will it be raining with great likelihood 1 week from now, or would it be closer to 50/50? It would be of course closer to 50/50
- How about 3 Years from now, this is surely random no?

(You can take into account seasonal bias that may exist, but that does not change the relationship of the period used relative to the tails being observed)

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In conclusion

I hope my two cents can be an eye opener for some of you that are willing to think a bit outside of the box. Notice how the period used to analyze an event can change the observable characteristics of that event, now if you were making bets (trading) the outcome of an event (ex. will it continue to rain?), would it not be crucial to take into account the period of time used to observe such an event, or perhaps omit time out of the equation completely?
We went from rain being almost guaranteed to continue (when looking at it from a 1 second point of view), to being nearly random when looking at it on a longer basis.

Time, is something I don't use in trading anymore. But time has a massive effect on the perception of the individual when used to analyze just about any type of data, be it data from the Markets or from the weather. Time analysis was something that helped define my trading, it was of great importance when I first began developing my now successful trading methods.

Unfortunately most people have a cognitive bias when it comes to these types of things, the word "Random" is thrown about too easily. I'm betting that just about everyone (asides from a handful) would have selected answers other than "D." in the question mentioned above.
The simple answer was C. that rain is heavy tailed and most likely going to continue, however, the actual answer was "D. Other." this was explained earlier.

Most assume that the Markets are Random or very close to random, try isolating the non-Randomness of the Market and define the actual characteristics of the Market's before attempting to trade, because for all you know based off of how you are "looking" at the market you may just be trading data that is so close to random once trading costs are factored in, you are losing. For those of you that will try to scalp smaller time frames I will save you some time/research: Once you factor in the costs of trading smaller time frames and/or smaller targets (example 1 pip take profit) the non-randomness of these smaller values is not enough to overcome the costs of trading which are now massive relative to the take profits.

You will have to do a lot of digging on your own to understand how one can use the two above examples about Roulette (Randomness) and Rain (Heavy Tails in relation to one's own Perception) effectively when it comes to Trading.

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I do care a lot about this community, there have been many meaningful discussions, and very good people here, this community gave me a foothold for when I was aspiring to trade and really struggling.
I share this information with those aspiring to trade, so please do take the following into account:
I have mentioned previously making a stable income from trading requires a ridiculous amount of work, much more than working a Day job or even multiple Day jobs. There is no shortcut.
You will have to sacrifice a lot to become a successful trader, you must do the work to reap the benefits. If you do not do enough work you will fall short and have less than what you began with, so either commit fully or quit early, and you're smart either way.
However, do not go about trading and research half-assed, not only will you not become successful, and you will have less than what you started off with (wasted time, and lost money).
If you have doubts, if you have lost money, or are stressed, it's okay, life goes on, simply move onto something else or clear your head and come back with greater focus. That is the smart and best thing to do for yourself and for those around you. I say this because the majority of people are not successful over the long term when it comes to trading.
Please do not trade if you are not profitable instead do research instead and demo trade! Trading and saying your chart experience will make you better is not true IMO (this may offend some people, however this is just my opinion) there are many traders who have been trading for several years some trading for even decades, with hardly any improvement, in many cases no improvement whatsoever, chart time is wasted time when spent trading for money when one has no research to prove profitability. Research, research, research, and think outside of the box!

For those of you asking for a trade explorer that will happen January 1st 2018. Do note, my proof of profitability (or anyone else's TE) will not increase your profitability so don't waste your time judging other people's TE's instead spend your time researching!

Best of luck to you all, I hope what I have shared today may be beneficial to anyone that reads it weather they decide to leave trading or continue,
lots of love as always! Godbless you all!

Rparm


Ps. (for those of you aspiring to trade, read the following link, it is a little insight into: what I expected vs. what the reality was, when I was working towards becoming successful trader: https://www.forexfactory.com/showthr...49#post9081649)

Luv the post Rparm. You nailed it :-)

This suggestion that the longer the time the more it approaches random runs counter to advocates of trading the longer tf, no?

Possibly both sides are equally steeped in cognitive bias of some form of dependency based on the individuals beliefs ?