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Twelve widely believed forex myths

  • #101
  • Feb 22, 2016 8:14am Feb 22, 2016 8:14am
Quoting bagman
Everything is worth as much as the buyer wants to pay for it, or is desperate enough to pay for it.
A brash but correct way of putting it.

The landscape of fundamental factors is always in flux.
  • #102
  • Feb 22, 2016 8:19am Feb 22, 2016 8:19am
Quoting Atokys
{quote} A brash but correct way of putting it. The landscape of fundamental factors is always in flux.
I did not mean to be cynical. If I had left out the desperate part it would not be real. Because in many situations in life people are pressured into a possibly bad deal because there is no other choice or no better choice. Examples being high gasoline prices or low wage jobs.
Price-Action Extremist
  • #103
  • Feb 22, 2016 8:25am Feb 22, 2016 8:25am
Quoting bagman
{quote} I did not mean to be cynical. If I had left out the desperate part it would not be real. Because in many situations in life people are pressured into a possibly bad deal because there is no other choice or no better choice. Examples being high gasoline prices or low wage jobs.
I didn't find that statement cynical. It happens naturally and all the time. Panic and desperation are running themes especially among the crowd that likes shorting the high.
  • #104
  • Feb 22, 2016 8:54am Feb 22, 2016 8:54am
To me it's about balance. A markets balance (imbalance) or a traders balance (imbalance) are what we trade. When some idea of how each functions then we become capable traders. What tools to use to see imbalances is what each trader must learn. Some need many tools, others one or two and others can just look at bars. None are wrong, none are right, except to you. You see even my reply in this thread is balanced.
As an experiment for yourselves try putting a MA on a chart based on 1 on the HL of the bar. Put it on the chart as a very light line or maybe a dash on the bar. Watch how price is always testing the balance of the bigger bars. Just a thought and something I do in my attempt to know who is in control, the buyer or the sellers.
  • #105
  • Jan 16, 2017 6:47pm Jan 16, 2017 6:47pm
Trading myths were exposed by the ADVANCED ALIEN CIVILIZATION a long time ago.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #106
  • Edited 7:23pm Jan 16, 2017 7:13pm | Edited 7:23pm
Holding a buy and a sell in the same pair is a valid strategy. Lets say you want to sell a market and due to lack of movement you have not entered into profit by the weekend. You can close the trade and take a loss. Or you can hedge it, in effect locking in your profit or loss. Markets have a tendency to gap over the weekend, so this can be a far safer option than using a stop which can be gapped through.

You can also trade in the same pair if you want to hold a long term trade but also want to trader the counter trend moves. Day trades can and will retrace on 400 to 900 points on a market like the SP500. So I can see no reason to keep closing out my existing trade when I can simply take a trade in the opposite direction. In effect it appears I am flat but I am looking to close out and leave my existing position alone.

Lastly, hedging out can allow you breathing room. Instead of allowing a trade to fry your capital or hit a stop, you can freeze it and re-evaluate your entry. By then stepping back from the trade you can trade at the boundary's adding or subtracting from the trade to reduce the size of the hedge. Due to the fact markets range, you can whittle down a loss to a fraction of its original size.

Just saw a bit about the markets and random walk, this is so wrong, utterly wrong it make my blood boil to see it. Markets are not random, price can be predicted, you will never know 100% if it will work but you can narrow it down. Markets repeat and function in a non random fashion because the players in the market are not acting randomly. Big players have an agenda, learn how their trading works and you can see not only their patterns in the market but also what they are doing. Takes a while though.
  • #107
  • Jan 16, 2017 8:07pm Jan 16, 2017 8:07pm
Inserted Video
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #108
  • Jan 17, 2017 12:08am Jan 17, 2017 12:08am
Quoting Hurst
Holding a buy and a sell in the same pair is a valid strategy......... you can whittle down a loss to a fraction of its original size.
Everything you've stated has all been discussed many times before (same pair hedging was a hot topic when the NFA legislated against it). Please feel welcome to check out the links to the explanations and math-based proofs in the posts here and here.
  • #109
  • Jan 17, 2017 12:36am Jan 17, 2017 12:36am
Quoting Hurst
Holding a buy and a sell in the same pair is a valid strategy.....
you can see not only their patterns in the market but also what they are doing. Takes a while though.
 
A great post.!! 
Thanks. 
Hedging is great if you know what u are doing. And don't stay in front of the charts.
 
I don't see what Hanover etc. are complaining and writing volumes about.
Beware of robber banks (RB), bad advisors.
  • #110
  • Feb 8, 2017 4:20pm Feb 8, 2017 4:20pm
Quoting tashkent
22. High Win Ratio is the strongest indicator of a profitable trader
Agree.

Another myth is that you have to use Take Profit and Stop Loss. No one has proven to me that you need TP and SL to be profitable. Amateurs go broke by taking huge losses and Pros go broke by taking small profits.
You came here for the truth and let me unveil it for you
  • #111
  • Feb 8, 2017 4:30pm Feb 8, 2017 4:30pm
Quoting flotsom
{quote} Hanover, you are one of the only people on this forum I have any interest in listening to, as you are always intelligent, logical and from what I can see, correct. However in this instance I have to disagree or at least question the meaning (hopefully in a constructive way). I am a firm believer that it is impossible to forecast price direction. To do so would mean the ability to know the thoughts, feelings and beliefs of every participant and waiting participant, and also know how those thoughts, feelings and beliefs will make those individuals...
In the short term prices can be predictable due to momentum however in the long run prices are blurred and unpredictable on a consistent basis.
Trade management if you mean money management is not an edge.
You came here for the truth and let me unveil it for you
  • #112
  • Aug 22, 2017 9:21am Aug 22, 2017 9:21am
Hey buddy Hanover

This is one of the threads I like to read over and over again whenever I see another kind of Martingale/Hedging/Basket "Method", this way I don't waste my time.
------------

My contribution is the following:

I'm not sure if this is "myth" or rather a misconception but when I first started learning about forex I found two different opinions about automated trading:

1. Frauds telling you they have the 100% Holy Grail EA

2. Skeptics telling you no EA will work = Trading with EAs is always a losing strategy.

As the first one was pretty obvious to me, I went to believe the second one, and during my my first 2 years of trading I was "afraid" of trading with EAs.
Nevertheless I started reading member emmanuel7788 posts about not using an EA to fully automatize your strategy but rather using it only to manage your trades (Trade Manager) = Select your Bias then the EA will take care of your trades.

And it really changed my mind, this year I started learning about the basics of mql4 and it surprised how simple it can be for someone with zero knowledge about coding like me to create his own EAs for MT4 (Then I looked at mql5: Not so simple).

While trying to code by my own with the help of google/FF/mql4.com, I really found good benefits about this process, back-testing and forward-testing my so-called EAs, it was easier to find the pitfalls of my strategy, its pros and cons, and thanks to this I was able to improve a lot.

I really wish I had started "coding" long before.

In short, I'd like to add:

That trading with an EA is supposedly always a losing strategy.
  • #113
  • Dec 9, 2017 5:36pm Dec 9, 2017 5:36pm
Quoting hanover
Twenty-six widely believed forex myths I would have saved myself a significant amount of time and money if I'd understood the following, when I first started out...
This post should be pinned to the FF front page. Thank you so much.
--I'm a demo newbie, please be cautious.
  • #114
  • May 2, 2018 8:38am May 2, 2018 8:38am
Quoting hanover
Myth # 8. That 'casino based' MM doesn't apply to trading. MM (bet/position sizing) is pure math, and applies to any speculative activity that generates a distribution of wins and losses. As indeed trading does. MM can not provide an edge, unless you can establish serial correlation (i.e. the outcomes of consecutive trades are causally dependent), or otherwise find a way of getting the larger positions to coincide with winning trades. See myth #2. The edge can come only...

if you are not quite consistent with your trading, just trade a very small account, that way you can get the recognition of being a trader for a small fee. If you love the excitement of having money at risk, you should try gambling. Gamblers are honest. They risk their money, and they recognize the inherent risk in their occupation, they are up front about it.

This is the difference between a trader and a gambler: A gambler has no risk management, and a gambler is willing to lose large amounts of money quickly. A trader treats each trade as a calculated risk and manages each trade according to his system rules. Gamblers can lose all the money at once, and traders lose only as much money as their system will allow. The distinguishing factor is that a gambler does not follow risk management rules, whereas a trader follows strict risk management controls.

Expert traders do more than simply follow strict risk management controls; they also concentrate on one trading technique. This is the real secret of expert traders: They focus on one market, one trading system, one edge, and they use this edge in their trading repeatedly. Profitable trading is boring. Profitable traders are experts, and these expert traders do one thing over and over again.
  • #115
  • Jun 19, 2018 7:33am Jun 19, 2018 7:33am
Quoting hanover
Twenty-six widely believed forex myths I would have saved myself a significant amount of time and money if I'd understood the following, when I first started out: w.
......
I 'll print it , and I 'll read it every time.
Thank you for sharing your experience to us.
There is Light at the End of the Tunnel.
  • #116
  • Jun 19, 2018 9:33am Jun 19, 2018 9:33am
Quoting RondaRousey
{quote} Agree. Another myth is that you have to use Take Profit and Stop Loss. No one has proven to me that you need TP and SL to be profitable. Amateurs go broke by taking huge losses and Pros go broke by taking small profits.
Yeah I think using stop loss and take profits is a lot of bullshit. It implies that one is able to forecast and predict the market with fine accuracy. Both need to be flexible to allow for randomness. My stop loss and take profit are discretionary, I found it works better that way. Even when you are right the trade May move a little further against you before going your way, you can be right and still lose money.
When you see it, BET big.
  • #117
  • Jun 19, 2018 9:52am Jun 19, 2018 9:52am
This is an endless list. Hanover adjusted his to 26, but is there a limit to the list? Here's one: Indicator 'X' is very powerful. In real terms, no indicator is powerful. Its potency depends on the user.

KP
Do your homework, follow the footprints of smart money
  • #118
  • Jun 19, 2018 10:06am Jun 19, 2018 10:06am
Quoting KeenPips
This is an endless list. Hanover adjusted his to 26, but is there a limit to the list? Here's one: Indicator 'X' is very powerful. In real terms, no indicator is powerful. Its potency depends on the user. KP
That's why I always tell people you can't trade like a robot. That's why many fail, the desire to systematize stuff and do no work. Trading involves a lot of active thinking, every trading method should be used with alot of discretion. This comes through 10 of thousands of hours watching the charts.
When you see it, BET big.
  • #119
  • Jun 19, 2018 11:31am Jun 19, 2018 11:31am
Quoting Rennaissance
{quote} That's why I always tell people you can't trade like a robot. That's why many fail, the desire to systematize stuff and do no work. Trading involves a lot of active thinking, every trading method should be used with alot of discretion. This comes through 10 of thousands of hours watching the charts.
Yeah it comes from experience. Basically, the person which tries to trade during booms will unintentionally fit his strategy for the bull market (find its working during this cycle) and this adaption will play a bad trick during adverse events. That's why sorting out factors which are a kind of independent of time are what the trading model should be based on.
  • #120
  • Jan 8, 2019 4:29am Jan 8, 2019 4:29am
Quoting ReverseFlash
I really found good benefits about this process, back-testing and forward-testing my so-called EAs, it was easier to find the pitfalls of my strategy, its pros and cons, and thanks to this I was able to improve a lot. I really wish I had started "coding" long before. In short, I'd like to add: That trading with an EA is supposedly always a losing strategy.
Why would trading with an EA be a losing strategy?
TA-wise: one would trade on the looks of a graph (price-action, MACD, MA, etc.). Why would it be unprofitable to let a computer check the graph, and report back to the trader? No bias in my opinion, so a better strategy.

Please explain.
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