Trading Myths and Some Forex Math

You could have found your match if you inverse all my calls. I have a very special talent for being wrong.
2:1 R:R? Mehhh make it 5:1! Heck, bet your life savings and use 999x leverage and you'll be buying your tenth house in no time.

Ok, last attempt to give you the hard fact of any market.

A market that can be manipulated cannot be random.

If you stick around the trading game long enough, you will find that the movers leave traces of their next "random"or "pseudo-random" move. It's easy to see once you find it.

Peace! Out!

Yes I agree but unfortunately your understandings on inverse trading is also flawed becos you are never totally wrong on all your trades but mostly you are less than 50% correct and your RRR is less than 1:1 which will create a new set of problems. Who said Forex is easy...

Hehe
PS if u decide to change your mind on that live calls I am sure you know who to call..

What is all this fascination about Forex being random or manipulated or predictable etc.? Who cares? Your job as a trader is to exploit the market. Is it random? Great, go make money from it. Not? Go suck every penny it has got. Maybe sometimes? Maybe not? You know what to do.

Hahaha.. You are my kind of trader. Oh by the way how did they allow you back so fast??

Enough manipulation conspiracy theories.

Forex market is manipulated by supply and demand; by order flow.

Market participants; including retail traders; affect the price; and leave their traces on the price movements.

Our job as traders; is to front run supply and demand.

Bit of a crude example but anyway. Take two traders both risking the same. First trader is trading 100:1RR, second trader 1:1. The price moves in their favour 100R. The first trader has made one trade. The second has made one hundred. Who's made the most profit?

Establish Risk and Reward Levels
The first thing a trader should do in his trading strategy setup is to calculate the risk that is bold to bear so that the trading results are realistic.
When calculating risk and reward, traders often make the mistake of determining the reward first or setting the stop loss level that is too close to the entry level, thus causing the strategy to not work properly.

Hi there. Hope you are doing well. Per your request:

VeeFX: Binary Nature of Currency Markets

Efficient/Balanced Ranging Basket for Ranging Market
Efficient/Balanced Trending Basket for Trending Market

Markets are efficient.
There is no Edge in just Price vs time series
There is no way to pinpoint when Range turns into a Trend or Trend turns into a Range
Ignore Market Movements
Ignore Market Conditions
Ignore Price Action Analysis
And
Figure out a way to consider Market as Neutral.

So How to create a market neutral strategy/portfolio?
How to do both... generate income and grow capital from a market neutral portfolio?

Possible solution:
By trading BOTH Trending Following Strategy and Mean-Reversion Strategies in the same or different accounts.
But how because we don't know "when" !
Here's how to determine "when" to invoke which strategy:
Long-Only Divergent and Mean-Reversion in one account >> Trending Following and Pullback/Reversal Trading
Short-Only Divergent and Mean-Reversion in second account >> Trend Following and Pullback/Reversal Trading

For Income:
Inverse RR or fixed RR for Mean Reversion

For Growth/Capital Appreciation:
Big RR for Divergent

We fail because we do not know how to predict price
We fail because we determine risk based on Price Alone
We fail because we measure price distance or relative distance or correlations or strength to determine risk versus reward
Remove Price from the equation and just randomly pick divergent and mean-reversion based on some simple rule because outcome of every rule applied to the market will ALWAYS remain a 50:50 probability outcome before trading costs.

WTF - why 50:50?
Because:
Price is binary (bid/ask)
One Pair is also binary represented in single price..... This is the biggest reason why no one is able to assign a tangible absolute VALUE a currency pair (Hint: How can we determine market valuation if we don't have the absolute price of a stock/pair/currency/economy?)
Direction is binary (up/down)
trade is binary (long/short)
Market condition is binary (range/trend)
Trade outcome is binary (profit/loss)
Price behavior is also binary > Price is either diverging from mean or reverting to mean

With so many binary parameters driving a strategy, the outcome of any strategy will ALSO ALWAYS remain a 50:50 outcome. Why?

Here's my challenge for those who say they have found an edge in "price action" >>
Prove your profitable strategy can work with ANY position sizing/MM strategy. It MUST work at all times if there is a secret edge to be found in the market. As long as that edge exists, a strategy must ALWAYS be profitable regardless of trade frequency, trade mgmt, position mgmt, money mgmt, By definition, an edge in price must warrant a higher Risk to reward.

Am I right ? No f*cking clue but this is what my tiny logical mind is telling me via my research. What I do know for sure is... the word "Simple" has no place in any System Trading Thread.

See first post.

Although price movement appears manipulated (and it most likely is at critical points) chaos theory explains the way markets move thereby explaining why they actually are random. Price like anything else random will provide results in "clumps" or consecutive decisions.

If theres some losers, often theres more to come and vice versa.

I believe the life forms around this forum call it a trend.

Actually it's the opposite.

Thank you very much! Yes, I'm well. Seems like you're very well, too I'm very happy for your progresses.

CrucialPoint mentioned an idea; that is worthy of investigation:

Since we know for sure that a currency pair (such as GBPUSD) have a daily range of at least 50 pips; surely you can take home some of that daily range movements.

It is a certainly that the above statement is correct 99.9% of the time.

There is plenty of edge right there.

theoretical 50:50 is not quite accurate if you consider the spread.

Yes, obvious. I just forgot to mention it. In the beginning of my research I was quite amazed how hard it is to overcome the spread effect ...

You mean like this Forums are here for discussions. If you knew how to trade from your very first second, then congratulation. If not then please remember how you struggled in the beginning.

Best to ignore know it all Nurse Betty.

I have read many trading books and trading forums; and tested various strategies.

Most if not all the profitable strategies I trade; came from forums; and not from books.

The trading forums (including ForexFactory) are great source of trading ideas; and are worth a lot; much more than all books combined.

Take CrucialPoint thread for example; you will never find that quality posts in any book; and you will not find it with any forex educator either.

spread effect can be minimized either by trading higher tfs with bigger tp and sl, because smaller tp and sl equates higher trading cost in the form of spread or trade on commission based platforms of which the negative side is more you trade, more you end up paying commission in total.