Can anyone make a thread about: 'how to make profit' + proof?

Soo much randomness/overthinking/overcomplicating things, trying to make sense of every single thing they see.. thats why people fail; well that and ignoring the basics; its like they forget the actual reason of why are they doing this in the first place !!

1 of the reasons is something almost no one notice:TIME based charts its playing AGAINST you!!! the moment you try to "group" what the price did in periods of time (candlesticks) you get random sized blocks of information and THAT makes it hard to have a constant/repetable aproach, and even harder to find a well defined and reliable point + direction in wich to enter the market (the actual trade)

STOP OVERTHINKING AND OVERCOMPLICATING THIS ACTIVITY !! the so called "you need 10.000 hours" bullshit came from this line of thinking!!!

See below

See below

See below

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Thank you everyone. I try my best to post interesting information here about 'how to make profit'. If by any luck you find good material, please post it here also and we could all integrate this in our daily trading system okay?

Let's make this thread active. What have you guys learnt from forex trading by yourself (in opposed to others like articles, courses, books)?

What I have learnt from trading by myself, that I did not learn from others, is:
- 20-45 degree rule
- wave/pattern analysis (rules for slope, swings and certain combinations apart from the courses that I have finished (EW, Gann, NeoWave, Wolfe wave, K wave, etc)
- I recommend you guys if you are fond of wave/pattern trading, to put your theory into practice and thus follow the daily wave analyses https://www.tradingview.com/ideas/waveanalysis/
- time-day rules (i.e. L.O., summer vacation months tend to reverse and range)

I found a very interesting post which gives me inspiration to the fact that it's possible to make profit. Source: FS site. Read below article:
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Trading is a breeze with the Chaos Visual Averages, QQE, Mrtools' TDI & much more. You just need to see which one works best with your style of trading!

I don't think I can be much of an inspiration to you as I get big drawdowns in my accounts but I trade Forex and Futures for a living and make a steady 100 pips per week or (400 pips per month) and have so for the past five years now. On my large account I compound my earnings (for every additional $1000 profit I bump up my lot size by 0.10).

This is pretty much how I trade:

Technically.

1. Weekly chart trading 8 minor or cross pairs (I only trade Volatile pairs)
2. Draw one or two trendlines on the Weekly chart.
3. Zoom down into the Daily and 4H chart then place trades in anticipation of the Weekly trendline bounces (back into the Weekly trend).
4. I use Mrtools's non-repainting RSI on 14 period (default setting) and as I am in a losing trade I will wait for the RSI to hit the 70 or 30 line on the 4H or Daily and add another position in the direction of the Weekly trend.
5. I keep trades open for 1 to 2 weeks on average.
6. I only open trades during European, London and New York session (cash trade open).

Fundamentally

1. I will check all news events during the day.
2. Listen to Squawk and Bloomberg TV throughout the whole day.
3. Add to positions if data releases are good for a particular pair I'm trading on

It's a boring way of trading but there are always opportunities to trade every single day of the week.

To avoid confusing you, here's an example of how easy it can be to trade technicals successfully. Just start things off simple and use the higher timeframes. Only add indicators of your choice once you get the basics covered:

1. Draw one or two trendlines on the Weekly chart (keep it really simple).
2. Trade the bounces off those trendlines when price gets close to them by opening a trade into the direction of the Weekly trend.
An example on USDCAD. The overall Weekly trend is UP. Draw one simple trendline and open a trade into the direction of the Weekly trend (Buy) once price gets close to that trendline.

(In this screenshot I'm using our Floating Indicator as a TDI in the top right-hand corner but I usually use Mrtools' non-repainting RSI on my charts).

Here are my trading results for the past 6 months myfxbook here using this technique. As I said, I get big drawdowns occassionally but I'm use to it and can manage it well. The reason for my post is to show you that with perseverance and interest you can make a living trading! And by using the great indicators that Mladen, Mrtools, Mntiwana and the other traders that share here you can simplify and improve this process even further

An effective way to make profit is by using inflection points.

Explanation:

Find the major inflection points:
Inflection points are areas that mark the beginning of a fundamentally different behaviour of the price. They are the big spikes indicating rejection of a certain price level, the turning points in the direction of the market. It’s characterised by a big concentration of buyers and/or sellers. It’s where the big moves happen. Inflection points often form a part of your support and resistance as well, and you will see that a lot of those inflection points regularly line up to be at the same price level.
These points (or areas) are important because there will be a lot of buyers and sellers looking at them. Lots of buyers and sellers will have orders close by that will trigger. Stop losses and take profits will be around these levels. It is therefore important that you keep an eye on these levels. But how do you find them?

Let’s look at an example:


Basically, all areas where one of the following happens:

1. A major spike
2. A lot of increased activity
3. A major turning point in price direction

It takes some experience to know what the important inflection points on a chart are, but usually, the larger the spike or the stronger the move, the more important the inflection point will be. These points can line up with other inflection points to form support and resistance zones, which brings us to the next item.

Do you use inflection points in your trading system? Why or why not?

Every year contains 12 months. I will explain which month in the year is the best to trade. Read my post here: https://www.forexfactory.com/showthr...7#post11438717

Then read page 64, where they explain very clear an RSI strategy using channel filters. https://web.wpi.edu/Pubs/E-project/A...pmentFINAL.pdf

Let's make this an interesting and active thread. Can we have more people here interacting, guys. That makes it worthwhile for me, the OP, and for other readers.

Please read the following about which months are best to trade:

Best Time(s) of Day, Week & Month to Trade https://www.investopedia.com/day-tra...h-trade-stocks
Generally, looking at it another way, the worst months tend to be in the northern hemisphere summer (1 August to 15 September) and the end-of-year holiday season (1 December to 15 January). This is thought to be caused by the bigger traders not being as present during those windows because they are at the beaches and resorts or with their families, and therefore not trading.
https://www.quora.com/What-are-the-b...kouts-in-forex
Apparently, Summer, especially August is the worst month to trade with many institutional traders in Europe on vacation and NA on holidays as well. The best strategy many suggest is to simply go on vacation ourselves and resume trading when September comes around.
https://www.forexfactory.com/showthread.php?t=251718
https://www.marketwatch.com/story/th...cks-2018-03-13
Investopedia advises that, “The average return in October is positive historically, despite the record drops of 19.7% and 21.5% in 1929 and 1987.” The so-called January Effect argues for buying in December. The Santa Claus Rally argues for buying in November. As for selling, some say, “Sell in May and go away.” Others believe that August and September are the worst months for stocks.
But:
In the 1990s, December was the best month for the stock market. In the 2000s, April was the best month, and December was a nothing-burger (the sixth-best month). So far, in the 2010s, October has been the best month and April has been seventh-best. These calculations of the best-months in the past are about as useful as calculating the average telephone number.
https://www.marketwatch.com/story/th...cks-2018-03-13

I found that the best time to buy a stock was from August to December and the best time to sell stretched from January to May. The best individual month to buy was September and to sell was March. The results are based on actual trades, not hypothetical ones
http://thepatternsite.com/Seasonality.html
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What do you think? Are certain months bound to be more ranging/trending/volatile than others?

How to make profit? We have discussed about TA, PA, fundamentals, even ML/DM.

But, we have not talked about best youtubers for daily market analysis. If you haven't done this already, do a little research about it. Of course, this thread will help you and offer an average for where you can look firstly.

These are the top lists:
- The YouTube channels for investors to watch now https://www.marketwatch.com/story/th...now-2017-09-20
- Top 100 Trading Youtube Channels for Traders https://blog.feedspot.com/trading_youtube_channels/
- top forex trading youtube channels: https://www.forexfactory.com/showthread.php?t=735426
- top list: https://www.thebalance.com/education...raders-1031234
- best YT traders: https://investingshortcuts.com/tradi...ding-channels/


My tips for specific channels:
- Chat With Traders podcast https://www.youtube.com/channel/UCdn...ATOiDsPhqcg345
- https://www.youtube.com/user/4xTradersLIVE/featured185
- Tradeciety
- TradingWithRayner
- https://www.youtube.com/user/AHGrimes
- Alan Farley
- Marc Rivalland
- Omar Bassal
- Trading 212 David Jones
- ClayTrader (general/unspecific trading content)
- jake paul
- Wayne Mcdonell’s
- Cory Mitchel - Vantage point trading. Former prop trader. Straight forward technical trader
- trading channel with steven: https://www.youtube.com/channel/UCGL...V2z1hoQ/videos (recommended)
- daily fx edu (recommended)
- vantage point trading ( (recommended)
- winners edge trading (recommended) (watch this video)

So far most of you guys have only looked on youtube for forex video tutorials. Who of you have searched for channels of actual traders? Can you tell us about your experience?

These are the most viewed trading analysis youtubers:
- https://www.youtube.com/results?sp=C...forex+analysis
Filtered by channels and most viewed.

Fx empire and daily fx are in the top 10.

Profitable structures in the market:
- inflection points, as we have discussed here: https://www.forexfactory.com/showthr...1#post11556211
- weekly closing

What should you trade if all currencies are bullish ?

Answer: Currencies are traded against each other, so, by definition, they can't all be bullish. The secret is: find the most bullish one. This can be done by checking the sentiment: do your research, see which currency went recently from negative to positive in trader's eyes.

How most traders (maybe you also) make mistakes using the fibonacci: ()
- 8:00 minutes: don't use fib when fundamentals ignored this high-confluence point



- only focus on 38 and 61 fib levels: 3:35 minutes


Sloman:
- 38 fib means continuation, then the next wave will be 61 or higher (reversal)
- 100 fib is likely reversal

What fibonnaci tips do you have?

This is how to anticipate forex. Look at 3:15 minutes in

- random reaction VS anticipation
- anticipate story changing
- anticipation is about being repetetive, consistency
- There are buyers and sellers. Anticipate the loser's side risk level. For example, if buyers are losing, anticipate their SL zone and use that to increase your probability

Paper: Technical Analysis in the Foreign Exchange Market by Neely.

Discussing:
- Does Foreign Exchange Intervention Create Trading Rule Profits?
- Do Cognitive Biases Create Trading Rule Profits?

"They find evidence to suggest
that these patterns have predictive ability in some markets. Lo, Mamaysky and Wang (2000) do further work along
these lines and look at the predictive ability of several commonly used price patterns." - page 9

"Data snooping, publication bias and data mining are three related but distinct problems that could tend to
produce the false conclusion that TTRs are successful. In particular, these three issues stem from the fact that it is
always possible to find ex post patterns, such as profitable trading strategies, that exist purely by chance in a specific
data set and will not exist in other samples/data sets. Data snooping is the problem that researchers will choose,
either consciously or unconsciously, to test rules already proven profitable on part or all of the previously tested data
set.8 Data mining is the tendency for each set of researchers to test many rules and to base the overall inference on
the most successful rules: Negative test results are ignored, while positive results are taken to indicate that trading
rule strategies can yield profits." - page 11

"Some researchers argue that one should test only those rules that
are commonly used in practice to reduce the problem of drawing false conclusions from data mining." - page 11

"It is almost impossible to avoid some data snooping, given that data sets and plausible rules are limited." - page 11

"Starting in the mid-1990s, studies began to consider more seriously how to confront the data snooping problem.
One way to minimize this bias is to automate the rule-selection procedure and minimize researcher input.' page 12

"Gençay
(1999) and others have similarly employed neural networks as “black-box” methods for generating trading rules
with positive results." page 12

"Perhaps the most certain solution to data snooping, data mining and publication bias is to analyze the
performance of rules in true out-of-sample tests that occur long after an important study. That is, one can test a
group of rules that were examined in studies conducted sufficiently long ago that one has enough new data to carry
out a true out-of-sample test. Neely, Weller and Ulrich (2009) employ this line of attack. Of course, this technique
has a substantial cost: One must wait years to employ it on past studies." - page 13

"Olson (2004) dynamically reoptimizes MA rule portfolios in successive 5-year periods from
1971 to 2000 and then tests these in successive 5-year out-of-sample periods." page 13

"Pukthuanthong-Le, Levich and Thomas (2007) and Pukthuanthong-Le and Thomas (2008) extend the analysis on
time variation in returns to emerging markets. They find that major currencies no longer trend reliably but markets
in newly trading currencies appear to display some profit opportunities from technical rules. This finding suggests
that traders in major currency markets have arbitraged away technical patterns but those patterns still exist in
emerging markets.' page 13

"Figure 3 illustrates the time variation in the returns to traditional rules. It shows the rolling mean annual return
to a portfolio of the set of traditional rules used in Levich and Thomas (1993): 0.5%, 1%, 2%, 3%, 4%, and 5% filter
rules, as well as MA(1, 5), MA(5, 20), and MA(1, 200) rules. The figure makes clear that the rules were profitable,
on average, during the Levich and Thomas sample, 1976 to 1990, but tended to become much less profitable during
the 1990s and 2000s. The sloping lines, which represent predicted values from a time trend model of trading rule
returns, illustrate the trend decline in profitability over time. This visually confirms that traditional MA and filter
rules had become unprofitable by the early 1990s."

conclusion:
"The authors concluded that relatively simple technical rules were genuinely profitable on major floating exchange rates for an extended period,
at least 15 years, from about 1975 to 1990. As the profitability of those simple rules became widely publicized in
the academic literature, the profitability of the rules disappeared. At the same time, more complex and less wellknown
rules retained substantial profitability." - page 14

"In an intriguing study of a non-traditional source of technical information, Charlebois and Sapp (2007) confirm the
idea that market participants can predict future asset prices. They show that information from open interest on atthe-
money options produces a trading strategy that is more profitable than traditional technical trading rules." page 14

"Similarly, Kozhan and Salmon (2010), using high-frequency data, find that trading rules derived from a genetic
algorithm were profitable in 2003 but that this was no longer true in 2008. They attribute their finding to a dramatic
rise in the volume of algorithmic trading over this period. Consistent with this explanation, Chaboud et al. (2009)
report that from 2003 to 2007 the fraction of trading volume where at least one of the two counterparties was an
algorithmic trader increased from almost nothing to 60% or more for the yen and euro against the dollar.
The examination of time variation in the returns to trading rules makes it clear that genuine returns existed for
many years and probably still exist at lower levels for more complex rules. This raises the question as to the source
of those genuine returns." page 15

"When one removes the returns on intervention days from the
technical trading return series, the mean return to technical trading is no longer statistically significant." page 17

"Intervention does not generate
returns to technical trading, but rather responds to strong trends from which technical traders profit." page 18


Conclusion:
- link order flow to technical trading signals, as one input to a trading model that combines a neural network with a
fuzzy-logic controller and finds that the model has significant predictive power. This is profitable (2010 research).
- intervention has been correlated with periods of high profitability for technical rules.

What is black box trading?

Answer:
Black-box trading is a rules-based, fully automated method of engaging the financial markets. The term “black-box” alludes to the proprietary nature of the system or strategy that governs functionality. Black-box trading applications are also referred to as “quant,” “automated” or “algorithmic” systems. In addition, they often employ big data analytics and play an integral role in many disciplines including high-frequency trading (HFT).

As technology has evolved, black-box systems have come online to the masses. No longer must one be a large institutional participant to become a practitioner, as individual retail traders also have numerous options readily at their disposal

HOW DO BLACK-BOX TRADING SYSTEMS WORK?
Every black-box system begins with a trading strategy. The strategy is then translated into computer coding language, integrated into a software trading platform and plugged into the market. However, no matter how intricate the code or robust the platform, a black-box system includes functionality local to three standard areas of trading:

-Signal Generation: In accordance to a concrete set of analytical parameters, the black-box scans a selected market or markets for trading opportunities. Upon the defined criteria being met, a market entry point or “signal” is created. Each signal is a prompt for the automated system to enter a specific market. Signals are based on a vast array of methodologies, with a few of the most common being momentum oscillators, market reversal points or trend following protocols.

-Trade Execution: Upon a signal being created, the black-box automatically places orders at market in accordance with defined parameters. In the event an entry order is executed, the newly opened position is managed by the system’s automated framework. Concrete rules govern the location and order type placed upon the market, including stop losses and profit targets. Countless trade management strategies are employed, with a few examples being trailing stops, scalping and scaling.

-Risk Management: Provisions for risk management are regularly included in the makeup of the black-box trading system. Aligning risk to reward on a trade-by-trade or account equity basis is a primary method of controlling levels of market exposure. Portfolio optimisation, position sizing and hedging strategies may then be integrated into trading operations.

References
1. Retrieved 28 March 2018 https://www.ft.com/content/ae935520-...c-9588e51488a0
2. Retrieved 29 March 2018 https://www.cnbc.com/2015/09/25/what...ash-crash.html
3. Retrieved 29 March 2018 https://www.cftc.gov/sites/default/f...ing_update.pdf
4. Retrieved 29 March 2018 https://www.technologyreview.com/s/6...re-threatened/

What I have learnt from a few years of trading is that the entry is the least important part of a trade, it's how you manage the trade and where you exit that give you the edge.
IMHO trading is a probability game, every trade you enter has a probability of reaching your target or getting stopped out and, the controversial point now, technical analysis gives you no real edge in trading or no one has ever shown me that it does!
In my trading I use no analysis at all, but I do try to capture daily trends, I only use a 200 sma for trend direction on the M30 time-frame and that's really it, the rest is purely managing the trade and deciding on the exit

I'll post some more details if anyone wants

That sounds very interesting.

1. You stated that you use a 200SMA on M30 chart. The first question that I'd like to ask is, in your strategy how do you define the start of a trend or ranged market?

I'm using a wave analysis to try predicting the breakouts, for example:
- in my breakout strategy I"m using London Open, crossover of 50EMA, 200EMA and main trend features like whenever a new HH forms,
- when the first wave starts of the Elliot wave theory, I go for a trend strategy.
- using ATR for entry/exit

2. "I only try to capture daily trend. "
--> do you mean your entry/exit is on the M30, but your bigger picture (analysis) is on the D1 chart)?
--> or do you just use intraday trading usually only on the same day?

3. Yes, I'm enthusiastic to see more details.

WARNING...!!! Information overload ...!!!

Hi michaellobry

I'll answer the way you've asked

1. I don't define the start of a trend at all, nor any ranging, I just enter. If above sma, I wait for a reversal (down) bar then enter on the break of the high of the very next up bar, stop at the other end of entry bar. Reverse of course for shorts.

2. Remember I do no analysis whatsoever, so by saying capturing daily trends I just take them as they come along, a trend usually follows ranging! At the moment I'm trading just EUR/JPY

I must say that I didn't come up with this on my own, I own most of the thoughts to 60minuteman, he's a proper 'out of the box thinker'

3. Now I take lots and lots of losses, like a lot of systems, and you have to be prepared for that. I don't believe technical analysis will give you any edge over the long term, so I don't use any. My edge comes in trade management, I measure targets by multiples of risk (stop-loss) not pips! And I tend to move stop to break-even after 3R and mostly target 7R to exit or sometimes trail, depending how market has been moving

All this is very simple to execute, trick comes when you've had ten losses in a row, will you take the eleventh trade?
Trading, in my opinion, is all about probabilities, when will the runners come for my trade to get to 7R? And how many losses I have to take to get one?

Lastly, I ignore all news, even NFP and just enter! And at the moment I don't hold over weekends, but this may change, plus I only enter one trade at a time until TP or get stopped

Saying that TA gives you no real edge over time is controversial I know, but most traders loose and most traders use TA! So.............

Regards

I must say that this is not all my own thinking, most of the thoughts come from 60minuteman, he's a proper 'out of the box' thinker