Trading Myths and Some Forex Math | Page 7 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Twelve widely believed forex myths 121 replies

Forex Myths 29 replies

Ridiculous Trading Myths 323 replies

Dispelling Some Myths on Trading Practices 23 replies

Trading Myths 35 replies

Attachments: Trading Myths and Some Forex Math
Exit Attachments

Trading Myths and Some Forex Math

  • #121
  • Aug 29, 2018 3:37pm Aug 29, 2018 3:37pm
you will not get anywhere until come to a common agreement what the "randomness" in financial market is.
there is no point of further discussing this when everybody has his own definition of the concept. this is like talking to each other in different languages and explaining something.
As Above, So Below
  • #122
  • Aug 29, 2018 3:43pm Aug 29, 2018 3:43pm
Quoting jmn5611
{quote} If you read well, there are many studies, done by many people, over many years. The odds of every trade are the same, 50:50. If it were not this way, and it could be statistically proven as such, no one would take the other side of your trade. Who would take the other side of a trade that was statistically proven to win? This would seem to be common sense, but maybe it is not.
What if all the people that made those studies are...complete idiots? Would that be a possibility? What if the market is 100% solved, only it requires so much experience and time that it can't be solved in a lifetime? Would that be possible? If you go on youtube there are people, alot of them, that still think the earth is flat!

Also, i've never said that the market is random or not, unlike some people here. Even if you show your last 100 trades and they're all winners...that proves nothing. Who knows how many trades it takes to prove that it's not random? However, when someone says or assumes the markets are random, they are making a statement and i'm expecting them to prove it. You cannot debunk myths based on assumptions.
  • #123
  • Aug 29, 2018 3:47pm Aug 29, 2018 3:47pm
http://finance.martinsewell.com/styl...Kinlay1988.pdf

https://arxiv.org/ftp/arxiv/papers/1608/1608.07752.pdf
Price itself it's an indicator
  • #124
  • Aug 29, 2018 3:50pm Aug 29, 2018 3:50pm
Quoting VEEFX
{quote} And yet there is ZERO evidence that Mr. BlueSteele even trades or his performance track record or any proof that "trading is simple". I have repeatedly asked him to show his most recent trade... just ONE trade, this week, last week, last month...nada. Not even a demo trade screenshot lol EDIT-He's got only two screenshot of charts from 2009. Go Figure.
Ohh Mr VEE.. Im going to give you some good advice. Do with it what you will. Keep pounding on your chest.
The truth is no matter what i wold show you you would cry fake. its a mute point..

and NOW for your lesson VEE and mostly for others. I couldnt say this better myself.

"What puzzles me is why so many traders don't take note of evidence. When you find and study the group of traders with the best long term track records you can learn all you need to learn. Instead they all seem intent on listening to the retail crowd when we know that they make up the majority of the losing traders. What do the traders who have beaten the markets for 20,30 years have in common, what message do they give when asked how to be profitable, you find their messages are all very similar and very often at odds with the techniques and tools of the retail crowd. Who are you going to believe?
We know there must be edges to exploit, not 100% but there are a lot of traders who have consistently made very large returns. Listen to them and more importantly take onboard their advice - don't try and short-cut it with the ideas of the inexperienced."

"Learn from people like Nick Radge, forget learning from retail traders (I include myself in that.)

The vast majority trade very simply with good risk control and most importantly they are patient and accept they have losing periods.
....and you never once hear them banging on about predicting or reading the market."
Master your Mind,,,Master the Market
  • #125
  • Aug 29, 2018 3:54pm Aug 29, 2018 3:54pm
Of course there is news (economic, political, weather etc) and other fundamental factors that cause the market to move this way and that.

I think most of us can agree price often moves during days without any of the above taking place? Or it moves counter to what those factors would "normally" indicate would be expected.

Good news for a currency would have some expecting it appreciate but hmmm it doesn't. They would say that is random. While others understand the news was already factored in. Traders sold on the news to buy back lower "after the dust settles."

Like I said previously, random except when it isn't.

Also another thing forex noobs fail to realize is when trading a currency (say most popular EURUSD) they have to understand the interaction of EUR pairs with USD pairs and the other majors YEN and GBP plus sometimes CHF, CAD, AUD, NZD.
  • #126
  • Aug 29, 2018 3:59pm Aug 29, 2018 3:59pm
What utter crap.

When you make a profit, you profit. When you lose, you lose.

That's all there is to it.
  • #127
  • Aug 29, 2018 4:01pm Aug 29, 2018 4:01pm
Quoting SunTrader
Like I said previously, random except when it isn't.
Well, that's what I call pseudo-random.
  • #128
  • Aug 29, 2018 4:01pm Aug 29, 2018 4:01pm
Quoting Stillearnin
{quote} What if all the people that made those studies are...complete idiots? Would that be a possibility? What if the market is 100% solved, only it requires so much experience and time that it can't be solved in a lifetime? Would that be possible? If you go on youtube there are people, alot of them, that still think the earth is flat! Also, i've never said that the market is random or not, unlike some people here. Even if you show your last 100 trades and they're all winners...that proves nothing. Who knows how many...
It's possible, but not probable. This is the same argument that the flat earth society uses. Markets cannot be "solved", otherwise there would be no market. All you would get for a chart is a straight line, as there would be no need for price discovery. There is no magic to this market. It is nothing other than buyers and sellers trying to agree on price. You never did answer why anyone would take the other side of a guaranteed winning trade? This is what you are implying when you say that the FX market is not random.

Quoting tashkent
you will not get anywhere until come to a common agreement what the "randomness" in financial market is. there is no point of further discussing this when everybody has his own definition of the concept. this is like talking to each other in different languages and explaining something.
Hey tash,

I would say the definition of random is the inability to determine where price will be on the next tick or intraday bar.

Quoting EcoTrader
There is a natural element of randomness with all transactions spanning countries requiring exchange. That's were the randomness ends however. The directional bias on a daily basis is driven by sentiment that's is affected by economical and political news. Longer term directional bias is driven by an economy's fundamental strength and specifically the future direction of central bank policy. Technical based trading strategies are highly random because they attempt to predict future price based on historical price. This is the biggest trap that causes...
All this is true. There are macro economic price drivers in play with any currency. But at that point we are no longer trading, we are investing. That is an entirely different animal.
If you are good at something, never do it for free--Joker
  • #129
  • Aug 29, 2018 4:12pm Aug 29, 2018 4:12pm
Quoting raklian
What utter crap. When you make a profit, you profit. When you lose, you lose. That's all there is to it.

i add a new one.
follow trend you profit, reverse it you lose.
Profit growth tells you the trader ability.
  • #130
  • Aug 29, 2018 4:18pm Aug 29, 2018 4:18pm
Quoting jmn5611
{quote} You never did answer why anyone would take the other side of a guaranteed winning trade? This is what you are implying when you say that the FX market is not random.
What's a guaranteed winning trade? Guaranteed and not random are very different things. If i were a market maker and in a guaranteed trade as you put it, that say has a stop loss of 30 pips, and i would see that there are 10.000 people selling (for example) at the same level as me, i would mark up the price 20 pips for instance. Why? The inexperienced traders may get out with a stop loss, some of the other may start buying but overall, i would win more if less people are in the trade. Psychology. The same reason why big down moves often have up moves before them. I have no idea if this is the correct answer though, or if it satisfies you, maybe i am completely wrong but that is what i would do.
  • #131
  • Aug 29, 2018 4:20pm Aug 29, 2018 4:20pm
Quoting SunTrader
Of course there is news (economic, political, weather etc) and other fundamental factors that cause the market to move this way and that. I think most of us can agree price often moves during days without any of the above taking place? Or it moves counter to what those factors would "normally" indicate would be expected. Good news for a currency would have some expecting it appreciate but hmmm it doesn't. They would say that is random. While others understand the news was already factored in. Traders sold on the news to buy back lower "after the...
I don't think I am personally an FX newbie, but I do not follow what other currencies are doing when I place trades. All I want to know is whether or not the bulls or the bears are dominating when I take a position. Because I am aware that this can change on a tick, I position size accordingly.
If you are good at something, never do it for free--Joker
  • #132
  • Aug 29, 2018 4:29pm Aug 29, 2018 4:29pm
Quoting jmn5611
{quote} I don't think I am personally an FX newbie, but I do not follow what other currencies are doing when I place trades.
This is it
we dont take one pair movement as other pair based movement.
one pair for its own.
Profit growth tells you the trader ability.
  • #133
  • Aug 29, 2018 4:33pm Aug 29, 2018 4:33pm
Quoting Stillearnin
{quote} What's a guaranteed winning trade? Guaranteed and not random are very different things. If i were a market maker and in a guaranteed trade as you put it, that say has a stop loss of 30 pips, and i would see that there are 10.000 people selling (for example) at the same level as me, i would mark up the price 20 pips for instance. Why? The inexperienced traders may get out with a stop loss, some of the other may start buying but overall, i would win more if less people are in the trade. Psychology. The same reason why big down moves often...
Anytime anyone says that the market is not random, they are saying that there is a greater than 50% chance they will win that trade. If such a pattern existed, computer algos would pick it up very quickly and market makers would not fill you, at any price. This is a binary equation. Random or Not-Random. If the market is not random it could not be a market. If you knew you had a trade that you knew could not fail, why not bet the farm, mortgage your house and sell the wife? No need for a stop loss. But again, who would take the other side of such a situation? It is also a fallacy that you would win more if less people are in the trade. You win whatever you set your TP at regardless of who else in the trade. All that matters for you is if you got filled and how much slippage you took.

Still, btw, this is not a right or wrong thing. This is an exercise in understanding how markets work and why they work the way they do. An up move comes before a down move because it has to. Bulls are trying to find out how high they can push things. If they see the tell tale signs of failure, they will stop buying, the bears will see this also and they will start selling for any reason. Then the bulls will give up, start selling also and viola, your big down move. That's all it is.
If you are good at something, never do it for free--Joker
  • #134
  • Edited Aug 30, 2018 2:03am Aug 29, 2018 4:39pm | Edited Aug 30, 2018 2:03am
Quoting bluesteele
{quote} Ohh Mr VEE.. Im going to give you some good advice. Do with it what you will. Keep pounding on your chest. The truth is no matter what i wold show you you would cry fake. its a mute point.. and NOW for your lesson VEE and mostly for others. I couldnt say this better myself. "What puzzles me is why so many traders don't take note of evidence. When you find and study the group of traders with the best long term track records you can learn all you need to learn. Instead they all seem intent on listening to the retail crowd when we know that...
You and others continue to point towards successful industry professionals which is NOT applicable to any of my posts.

I am binge-watching "BILLIONS" on Showtime. I highly recommend it... especially the professional performance (enhancing) coach/shrink these hedge firms use!

All my posts have "Retail Spot FX", "Retail Traders working from Home", "There is no evidence of fulltime Retail "work from home" trader"... I stand by every word what I have written (even my deleted posts!) until I see just one concrete verifiable independently audited evidence.

Thanks to Google >>>> Nick Radge has been trading and investing since 1985, and has worked for global investment banks in Sydney, London and Singapore. He is an ex-Director at Macquarie Bank and ran his own hedge fund

I have mentioned this over and over and over.... All my research via bookmarked posts from my profile is applicable only to Retail Spot FX Trading where you are NOT trading against other retail traders on a level playing field. We have ZERO transparency outside of a price quote and tick volume. I have also pointed out many ex-institutional traders who have not succeeded or will not touch Retail Spot FX due to lack of transparency and conflicts of interest! Still waiting for someone to prove me wrong!

I have also mentioned my "disclaimer" several times that all my research is based on OHLC (M1+ charts) and not tick charts because I am not a believer of ticks in retail spot fx. I have also not research VSA/AMT/Market profile or any tick/volume based strategies in system threads section of the factory.

I knew one day I would be compared to the likes of Mingary that is why I have chosen the path of sharing EVERY bit of my research and my own trading strategy and my beliefs.... instead of running around without substance crying out loud. Mingary is right ! There is NO evidence of any successful fulltime retail spot fx trader generating full time income from trading. Period!

VeeFX Criteria of a successful Hobby/Part Time Retail Spot FX Trader:

  1. Minimum 6 months of consistent track record
  2. Atleast 3-5 trader per week for manual trading or atleast 500 trades for automated trading
  3. Trade without 1:1 leverage - with 1:1 you become an investor and not a trader
  4. Average $ or pip win vs Average $ or pip loss must be greater than 1
  5. Return of Max EQUITY Drawdown must be greater than 2
  6. Trade currency pairs only and not CFDs, stock market indices, metals etc

VeeFX Criteria of a successful Retail Spot FX Trader Generating Fulltime income:

  1. Minimum 24-36 months of consistent track record (I prefer 36 months for a very specific reason from full time traders)
  2. Atleast 3-5 trader per week for manual trading or atleast 1000 trades/year for automated trading
  3. Trade without 1:1 leverage - with 1:1 you become an investor and not a trader
  4. Average $ or pip win vs Average $ or pip loss must be greater than 1
  5. Return of Max EQUITY Drawdown must be greater than 3
  6. Annual Returns must be atleast 3 times SnP benchmark returns to justify the risk of capital that exists in Retail Spot FX
  7. Trade currency pairs only and not CFDs, stock market indices, metals etc

Staying in my lane...
  • #135
  • Aug 29, 2018 4:42pm Aug 29, 2018 4:42pm
Quoting jmn5611
{quote} Anytime anyone says that the market is not random, they are saying that there is a greater than 50% chance they will win that trade. If such a pattern existed, computer algos would pick it up very quickly and market makers would not fill you, at any price. This is a binary equation. Random or Not-Random. If the market is not random it could not be a market. If you knew you had a trade that you knew could not fail, why not bet the farm, mortgage your house and sell the wife? No need for a stop loss. But again, who would take the other side...
All you need to do to win money in a poker game is find one player out of 9 that has no idea what he's doing. Are you telling me that if 1% of the entities that trade the forex market have the game solved, that means automatically that 100% have the game solved? This is not child's play here, computer algos are limited by their programmers, only an AI can probably figure this out. And i am talking some Alpha Zero adapted to Forex kind of AI. And i think i've answered you already on the 'guaranteed' winning trade. If a trade can go no more than 30 pips up before going 1000 pips down and there are 10.000 people selling with you, why not fuck with them and send the price up 20 pips? That will at least keep them on their toes if not reconsider entirely.
  • #136
  • Aug 29, 2018 4:43pm Aug 29, 2018 4:43pm
Listen traders......please stop all this speculisting on whether price is random or not....It's really sad to see you all struggle so I'm gonna do a rare thing, and post here on ff...Listen up and listen well...the reason many of you are yet to be profitable is not so much about discipline(because in my experience when u develope a good trading strategy/methodology, discipline comes naturally because you TRUST your method..indiscipline has its roots in distrust, remember this) it's not that much about randomness or whether it's zero sum, because these theories cannot be quantified in forex because there is no central exchange, thus they cannot be proven true or false, it's because the conventional knowledge that has been disseminated throughout the forex world was not created for forex...there is not one credible or popular theory or market concept that was created by a forex trader that trades exclusively forex...every concept or theory in forex was borrowed from either a stock or commodities or futures trader...ONE OF IF NOT THE BIGGEST MYTH IN FOREX IS THAT THESE THEORIES AND CONCEPTS CAN BE USED ENTIRELY, UNMODIFIED, TO TRADE FOREX...A CARPENTER CANNOT USE A BLOWTORCH TO DO HIS WORK SO FOREX TRADERS SHOULD STOP USING OLD MARKET THEORIES AND CONCEPTS TO TRADE A MODERN FOREX MARKET.....NEXT MYTH IS THAT: it's all about price....this is a fallacy....TIME IS THE MOST IMPORTANT VARIABLE ON THE CHARTS...PRICE IS NOT EVEN A CLOSE SECOND PLACE...MARKETS MOVE PRICES....PRICES DO NOT MOVE MARKETS...STOP LOOKING AT THE Y AXIS AND START PAYING ATTENTION TO THE X AXIS...BIBLE TELLS US THAT THERE IS A TIME FOR EVERYTHING, THAT INCLUDES: a time to trend and a time to range...HINT: in Christmas time if you ppl wearing Halloween costumes you will begin to be suspicious....why because it's not the TIME FOR that type of dressing....ITS THE SAME WITH FOREX, TO CONQUER FOREX YOU HAVE TO FIND OUT WHEN IS THE TIME FOR RANGE OR TREND BY STUDYING THE CYCLES OF THE DIFFERENT PAIRS...EACH PAIR IS SLIGHTLY DIFFERENT...GET OFF FF FOR A SECOND AND STOP LOOKING FOR FREE LUNCHES...OPEN A CHART AND WATCH IT FOR DAYS WITH PEN AND PAPER IN HAND AND, TAKE NOTES TRACKING THE TIME CYCLE, WHEN IT TRENDS AND WHEN IT RANGES MOSTLY...THERE YOU WILL BEGIN TO FIND THE ANSWERS, ITS NOT HERE ON FF...
  • #137
  • Aug 29, 2018 4:44pm Aug 29, 2018 4:44pm
Quoting jmn5611
All this is true. There are macro economic price drivers in play with any currency. But at that point we are no longer trading, we are investing. That is an entirely different animal.
Not entirely true, it's a common misconceptions that fundamental trading is looking at the long term macro picture. Truth is I trade fundamentals intraday. The news drives the market sentiment daily. Take today for example. Brexit news of a partnership with the eu drove sterling higher. That's an intraday political driver with economic impact on the UK. Its part of trading fundamentals and has absolutely zero relationship with investing.
  • #138
  • Aug 29, 2018 4:45pm Aug 29, 2018 4:45pm
And whether market is random or not... I am NOT done with my research yet to put a bookmark out here but I am getting VERY close. I don't write just to throw shit out here so hang tight until then :-
Staying in my lane...
  • #139
  • Aug 29, 2018 4:47pm Aug 29, 2018 4:47pm
Quoting EcoTrader
{quote} Not entirely true, it's a common misconceptions that fundamental trading is looking at the long term macro picture. Truth is I trade fundamentals intraday. The news drives the market sentiment daily. Take today for example. Brexit news of a partnership with the eu drove sterling higher. That's an intraday political driver with economic impact on the UK. Its part of trading fundamentals and has absolutely zero relationship with investing.
Well said. Many don't even understand the F in Fundamental trading and WHY currency markets actually move or trend.
Staying in my lane...
  • #140
  • Aug 29, 2018 4:49pm Aug 29, 2018 4:49pm
Listen traders......please stop all this speculisting on whether price is random or not....It's really sad to see you all struggle so I'm gonna do a rare thing, and post here on ff...Listen up and listen well...the reason many of you are yet to be profitable is not so much about discipline(because in my experience when u develope a good trading strategy/methodology, discipline comes naturally because you TRUST your method..indiscipline has its roots in distrust, remember this) it's not that much about randomness or whether it's zero sum, because these theories cannot be quantified in forex because there is no central exchange, thus they cannot be proven true or false, it's because the conventional knowledge that has been disseminated throughout the forex world was not created for forex...there is not one credible or popular theory or market concept that was created by a forex trader that trades exclusively forex...every concept or theory in forex was borrowed from either a stock or commodities or futures trader...ONE OF IF NOT THE BIGGEST MYTH IN FOREX IS THAT THESE THEORIES AND CONCEPTS CAN BE USED ENTIRELY, UNMODIFIED, TO TRADE FOREX...A CARPENTER CANNOT USE A BLOWTORCH TO DO HIS WORK SO FOREX TRADERS SHOULD STOP USING OLD MARKET THEORIES AND CONCEPTS TO TRADE A MODERN FOREX MARKET.....NEXT MYTH IS THAT: it's all about price....this is a fallacy....TIME IS THE MOST IMPORTANT VARIABLE ON THE CHARTS...PRICE IS NOT EVEN A CLOSE SECOND PLACE...MARKETS MOVE PRICES....PRICES DO NOT MOVE MARKETS...STOP LOOKING AT THE Y AXIS AND START PAYING ATTENTION TO THE X AXIS...BIBLE TELLS US THAT THERE IS A TIME FOR EVERYTHING, THAT INCLUDES: a time to trend and a time to range...HINT: in Christmas time if you ppl wearing Halloween costumes you will begin to be suspicious....why because it's not the TIME FOR that type of dressing....ITS THE SAME WITH FOREX, TO CONQUER FOREX YOU HAVE TO FIND OUT WHEN IS THE TIME FOR RANGE OR TREND BY STUDYING THE CYCLES OF THE DIFFERENT PAIRS...EACH PAIR IS SLIGHTLY DIFFERENT...GET OFF FF FOR A SECOND AND STOP LOOKING FOR FREE LUNCHES...OPEN A CHART AND WATCH IT FOR DAYS WITH PEN AND PAPER IN HAND AND, TAKE NOTES TRACKING THE TIME CYCLE, WHEN IT TRENDS AND WHEN IT RANGES MOSTLY...THERE YOU WILL BEGIN TO FIND THE ANSWERS, ITS NOT HERE ON FF...
0 traders viewing now