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Your own HOLY Grail (and how you know you've found it) 19 replies

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What was your "holy grail"?

  • #161
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  • Oct 2, 2017 10:13pm Oct 2, 2017 10:13pm
Quoting HedgePro
To b frank , till now i've came across many systems in my 5 yrs of trading journey. and i have found that only Price action trading with Candlestick patterns works well One should use only Daily or H4 time frame and strictly no over trading. I had a month where i made 2.5x growth of my balance and still i was trading. finally i lost all the profits in the same month due to over trading.. I learned a lesson. Once the growth reaches 30% to 40% in a month, we should stop trading for that month. Thats my experience. there is no Holy grail .. Its a game...
Hi, HedgePro. How do you trade with "correlation hedge strategy" ? Thanks.
  • #162
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  • Jan 11, 2018 2:41am Jan 11, 2018 2:41am
Quoting lghr
{quote} Hi, HedgePro. How do you trade with "correlation hedge strategy" ? Thanks.
Think of it like daisy-chaining trades in opposite directions.
"The fun is in the hunt. Not the kill."
  • #163
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  • Jan 11, 2018 3:03am Jan 11, 2018 3:03am
Hi Guys would just like to know something, see the AUD retail sales m/m was 3 times more than expected, is it because of the christmas shopping ?? as USD retail sales m/m is coming out on friday and im hoping to make some nice dinero if its the christmas case
  • #164
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  • Jan 11, 2018 3:33am Jan 11, 2018 3:33am
Quoting 4for4
I think, this is one of the reasons why so many traders fail. They called themselves traders, yet they operate with an "investor" mindset ... The forex market is not a place to apply the exotic strategies such as diversification, average-down, double-up, ... When we trade the forex market, we should simply get in @ Planned-EP and get out as quickly as we can @ Planned TP-or-SL (by "quick", it's "days" in my case) ... Always have the bullets ready as the market is never short of opportunities ... And another thing is that we don't have to play all...
There is a strategy for every market. Having said that if you apply the same strategy on different market type you will get different outcomes and thus your equity curve stays flat.

I'm strongly into diversity. Even Ray Dalio had his hands in different pots.

I've been trading for 10 years and the only thing that makes sense is diversification.
You're going to pay a price for every bloody thing you do and don't do
  • #165
  • Quote
  • Jan 11, 2018 7:47am Jan 11, 2018 7:47am
Quoting newbietofx
{quote} There is a strategy for every market. Having said that if you apply the same strategy on different market type you will get different outcomes and thus your equity curve stays flat. I'm strongly into diversity. Even Ray Dalio had his hands in different pots. I've been trading for 10 years and the only thing that makes sense is diversification.
Good for you because you didn’t put all your eggs in one basket ...
In a sense, I also do some kind of diversification of my assets ... and one of them is my forex trading account ...
IMO, diversification only works on long-term investments, but not when trading the short-term forex market ...
Market is not random but unpredictable
  • #166
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  • Jan 11, 2018 11:15am Jan 11, 2018 11:15am
The problem with diversification is, I think, that it takes time to study different instruments. Trading currency pairs is not exactly like trading indices, which is not exactly like trading commodities.
  • #167
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  • Edited 1:55pm Jan 11, 2018 11:25am | Edited 1:55pm
Quoting 4for4
{quote} Good for you because you didn’t put all your eggs in one basket ... In a sense, I also do some kind of diversification of my assets ... and one of them is my forex trading account ... IMO, diversification only works on long-term investments, but not when trading the short-term forex market ...

Hey there guys it's been a while since I've been on ForexFactory but I saw these notifications in my email and decided to contribute.
My idea of "diversification" is the 30-40 pairs I scan through everyday... I then pick the HIGHEST PROBABILITY opportunity. Why would I trade a currency pair that doesn't show me its hand? Why would I stare at the same currency pair all day, every day? You'll end up missing a lot of great opportunities in other markets. Diversification doesn't necessarily mean you have to invest in the foreign exchange market, stocks, crypto, indexes, etc. etc. even though you COULD. But diversification has many interpretations. Or maybe you have several strategies up your sleeve?
  • #168
  • Quote
  • Edited 8:30pm Jan 11, 2018 6:51pm | Edited 8:30pm
Quoting Ganative
{quote} My idea of "diversification" is the 30-40 pairs I scan through everyday...
Hi there, Ganative ... yes, it’s been a while since you went into a “hibernation” period ...

If the idea of diversification is having several different pairs in the playlist, then I agree and have been doing it ...

But if the idea of diversification is of “separating risk” into several different instruments at the same time when we have an idea, say the USD is going to get stronger, then that methodology won’t work in this volatile forex market ...

just my two-cents ... (edited)
Market is not random but unpredictable
  • #169
  • Quote
  • Edited 8:25pm Jan 11, 2018 8:11pm | Edited 8:25pm
Quoting 4for4
{quote} Hi there, Ganative ... yes, it’s been a while since you went into a “hibernation” period ... If the idea of diversification is having several different pairs in the playlist, then I agree and have been doing it ... But if the idea of diversification is of “separating risk” into several different instruments at the same time, then that methodology won’t work in this volatile forex market ... just my two-cents ...
I have found that diversification even within the forex asset class segment alone produces far higher risk weighted returns than a single instrument in isolation.

I have stripped out the forex instruments in this test result below between 1 Jan 2010 to 30 Nov 2017. The results are quite compelling in relation to the improved risk weighted metrics produced by diversification.

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Individual contributions of each forex instrument are graphically portrayed below reflecting considerable correlation offsets.

Attached Image (click to enlarge)
Click to Enlarge Name: Capture3.JPG Size: 89 KB
  • #170
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  • Jan 11, 2018 8:12pm Jan 11, 2018 8:12pm
What is my Holy Grail !

Disciplined Price Action spliced with a quality system
IMPROVISE ADAPT OVERCOME
  • #171
  • Quote
  • Edited 4:17pm Jan 12, 2018 12:18am | Edited 4:17pm
Quoting 4for4
{quote} Hi there, Ganative ... yes, it’s been a while since you went into a “hibernation” period ... If the idea of diversification is having several different pairs in the playlist, then I agree and have been doing it ... But if the idea of diversification is of “separating risk” into several different instruments at the same time when we have an idea, say the USD is going to get stronger, then that methodology won’t work in this volatile forex market ... just my two-cents ... (edited)
Yeah man, it's been a while. It's just after a certain amount of time allocated towards the foreign exchange market... you really begin to develop a level of self-awareness where you understand what needs to be done and what needs to be worked on. You take a step back and ask yourself, "why do I suck ass at this so much? what areas need to be worked on?" The self-evaluation process with trading is gruesome. You have to be 100% completely honest with yourself. Lying to yourself does you no good but waste time, and time is money... literally. I think I have mentioned this previously before in the thread? You really don't need to take in anymore new information, other wise it's just meandering and time-consuming. And I think this is the reason why I stopped using this forum, I just didn't think it was time efficient.
But, in my free time, I think I may start using this forum again while I wait for my levels to be hit, and really connect with other traders in the world... after all, I don’t talk to many people about this in my personal life, because not many people possess the specific intellect to dive into an endeavor like this being honest.

Anyways, moving on from that, yes that idea of diversification by spreading risks into several different currency instruments won't work IMO. You plan your trade by determining your exit and entry point, solely and 100% focused on that one currency pair. You are not helping yourself at all by flipping back and forth from different currency pairs. But, who knows maybe there are people out there who actually profit by spreading risks into different instruments.
  • #172
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  • Edited 10:44pm Jan 12, 2018 12:22am | Edited 10:44pm
A little confused about something.
You hear people say that the more the mass is exposed to a certain strategy, pattern, or whatever, then the more obsolete it will be in the near future.

But there are other people who say that these same patterns and strategies will always work, basic human behavior will always manifest itself onto the charts (this is what I personally agree with). History will repeat itself, again and again. We all know this. Think about it. What YOU see on the charts, MILLIONS of other people are looking at the same thing. When those MILLIONS of traders on the globe decide on a bias (short or long) the order flow will move more quickly to its checkpoint. So... why would it be obsolete if the mass is exposed to it? That doesn't even make any sense. Wouldn't that just mean that price action will move with increased certainty and conviction? ... Ya, made you think huh?

But the thing is, even if that was the case, this point will never ever be reached. The mass will always continue to be the dumb money. Why?
The majority will always be misinformed, or will never be educated enough about the foreign exchange market in general. But the thing is, there's so much free GOOD information out there, people just don't know how to apply that information correctly. Or, they don't know how to pick apart the bad information from the good, so from the start they could be already going down the wrong path. Essentially, that means there will always be more losers than winners in ANY market. But this... is doable. I personally don't believe in the 95% losers 5% winners bullshit. It just isn't true, because it doesn’t make sense. That's just something you hear when you first start trading and is a stigma that just gets repeated... it's said like that loosely to scare you. It's like this... the 95% of "losers" are individuals who are not even real traders. When they first start out, of course they're not going to be profitable, so therefore they fail. If you try to perform your own kidney transplant, and end up dying, does that mean 95% of all surgeons are failures? Just because your dumbass decided to perform self-surgery? No, absolutely not. I can't stand hearing people reiterating the same "95% of forex traders are losers" crap ... well that's because they aren't traders to even begin with. Maybe 95% of retail traders are losers.
And interestingly enough, I've noticed those same 95% of retail losers spreading around shitty information and only repeating what "red flags" and "gold flags" seniors are blabbering about too. Lol, do you realize that some of these people with red/gold flags next to their names have probably been here since... forever and most likely have no idea what they are talking about. They haven’t figured it out yet themselves, because they suck ass at trading. So they use ForexFactory to maybe find some closure for their bad trading by reading the same BAD information that just cycles around this forum while hoping, just maybe, they'll make money this time. You are digging yourself a hole that is extremely difficult to climb out of because you are making yourself believe that the losers around you are feeding you reliable information. It's sorta pathetic.
This is probably why you are terrible at trading because you are listening to these "seniors" with their fancy gold/red flag next to their names, telling you what you should do lol. (Not saying everybody with a red/gold flag next to their name is stupid, if it doesn't apply to you then you know it doesn't apply to you).

Got slightly a bit off track there, but my whole entire point is that people repeat pretty stupid myths like this over and over again, "the more the mass is exposed to a certain strategy/pattern then the more obsolete it will be in the near future" is so false it's ridiculous. People hear crap like this coming from other people on this forum, and they don't even know if it's true but yet they still shove it in everybody's faces. But oh wait, that's nothing new. The majority of people will immediately believe any garbage they hear, and instead of sitting back and thinking about it, they blurt it out and spread it around like wildfire so now it's stuck.
  • #173
  • Quote
  • Edited 9:50pm Jan 12, 2018 1:06am | Edited 9:50pm
Quoting Ganative
... why would it be obsolete if the mass is exposed to it? That doesn't even make any sense. Wouldn't that just mean that price action will move with increased certainty and conviction? ...
I guess it should be theoretically ... but in this vast market with millions of participants, different opinions will arise every time the price moves ... unless the market is following only one “leader” ...

But the good thing about trading is that there are unlimited ways to make money out of the market ... all we have to do is learn how to make a trading plan using our favorite methodologies, then learn how to trade the plan ...
Market is not random but unpredictable
  • #174
  • Quote
  • Jan 12, 2018 1:39am Jan 12, 2018 1:39am
Quoting 4for4
{quote} Good for you because you didn’t put all your eggs in one basket ... In a sense, I also do some kind of diversification of my assets ... and one of them is my forex trading account ... IMO, diversification only works on long-term investments, but not when trading the short-term forex market ...
Unfortunately I did. I put all my money in forex trading. Just divide them into different strategies. You will never see me piggy bag in signals because I couldn't control the outcome.
You're going to pay a price for every bloody thing you do and don't do
  • #175
  • Quote
  • Jan 12, 2018 2:24am Jan 12, 2018 2:24am
Quoting 4for4
{quote} I guess it should be theoretically ... but in this vast market with millions of participants, different opinions will arise every time the price moves ... unless the market is following only one “leader” ... But the good thing about trading is that there are unlimited ways to make money out of the market ... all we have to do is learn how to make a trading plan using our favorite methodologies, then learn how to trade the plan ... (just my two-cents) ...

I saw an article once which caused me to start my "holy grail" journey. However, what we fail to realize that our bais or the system we use is exactly the dynamics that goes against price action. I would think the grail would start with the lower tme frames then working your way up being as the market trades the same way no matter the time frame you follow.
The Earth is flat!
  • #176
  • Quote
  • Jan 12, 2018 2:35am Jan 12, 2018 2:35am
Quoting Copernicus
{quote} I have found that diversification even within the forex asset class segment alone produces far higher risk weighted returns than a single instrument in isolation. I have stripped out the forex instruments in this test result below between 1 Jan 2010 to 30 Nov 2017. The results are quite compelling in relation to the improved risk weighted metrics produced by diversification. {image} {image} Individual contributions of each forex instrument are graphically portrayed below reflecting considerable correlation offsets. {image}
Would you please define risk rate? I ask because the word risk seems to be used loosely and almost like a boogieman to scare people away from taking a position.
The Earth is flat!
  • #177
  • Quote
  • Edited 9:11am Jan 12, 2018 2:48am | Edited 9:11am
Quoting Tfh
{quote} Would you please define risk rate? I ask because the word risk seems to be used loosely and almost like a boogieman to scare people away from taking a position.
Risk rate? I was referring to risk weighted return or risk-adjusted return. This relates to the level of return generated relative to the amount of risk taken over a given period of time. Many use the Sharpe ratio or Sortino ratio as a measure of this metric. My preferred ratio is the MAR ratio (CAGR/Max Draw) which represents the Compound Annual Growth rate of returns generated divided by the maximum drawdown over the period.

If you look at the MAR ratio in the data provided in my prior post you will see how a diversified portfolio in Forex alone produces a significantly higher MAR ratio than what can be achieved by an individual instrument. What this means is that you can play with far higher position sizing in a portfolio than what can be achieved for the same level of risk for an individual instrument. The reason for this benefit or 'free lunch' is simply due to trading many return streams that produce correlation offsets to reduce overall risk exposure.
  • #178
  • Quote
  • Edited 9:50pm Jan 12, 2018 3:19am | Edited 9:50pm
Quoting Tfh
{quote} I saw an article once which caused me to start my "holy grail" journey. However, what we fail to realize that our bais or the system we use is exactly the dynamics that goes against price action. I would think the grail would start with the lower tme frames then working your way up being as the market trades the same way no matter the time frame you follow.
Well, if the “bottom-up” approach works for you, so be it ...

I approach the market using a “top-down” strategy on the D1 chart in line-mode and a simple moving average (my big picture) ... When the market gives a trade-opportunity, I will then start following it closely in candlestick-mode for an entry-opportunity ...
Market is not random but unpredictable
  • #179
  • Quote
  • Edited 9:49pm Jan 12, 2018 6:54am | Edited 9:49pm
Quoting newbietofx
{quote} Unfortunately I did. I put all my money in forex trading. Just divide them into different strategies. You will never see me piggy bag in signals because I couldn't control the outcome.
Ok, that’s a valid definition of diversification ... allocating the resource into several different methodologies ...

I hope those different methodologies never give opposing signals ... (just pass the trades if they happen) ...
Market is not random but unpredictable
  • #180
  • Quote
  • Jan 12, 2018 7:50am Jan 12, 2018 7:50am
Quoting Copernicus
{quote} Risk rate? I was referring to risk weighted return or risk-adjusted return. This relates to the level of return generated relative to the amount of risk taken over a given period of time. Many use the Sharpe ratio or Sortino ration as a measure of this metric. My preferred ratio is the MAR ratio (CAGR/Max Draw) which represents the Compound Annual Growth rate of returns generated divided by the maximum drawdown over the period. If you look at the MAR ratio in the data provided in my prior post you will see how a diversified portfolio in...
Thank you very much for your explaination.
The Earth is flat!
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