How can an "edge" wear off - Shouldn't it be the opposite? | Forex Factory

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How can an "edge" wear off - Shouldn't it be the opposite?

  • #1
  • First Post: Sep 6, 2020 2:31am Sep 6, 2020 2:31am
I don't understand how releasing a working strategy to the public can make it stop working
If a lot of people trade at the same time in the same direction, price will go in the right direction strongly.
The only problem can be a diminution of liquidity, but I don't understand how it could affect the edge ?
It should enhance it at best, no?
please enlighten me

thanks

Jeff
  • #2
  • Sep 6, 2020 9:26am Sep 6, 2020 9:26am
Quoting ionone
I don't understand how releasing a working strategy to the public can make it stop working If a lot of people trade at the same time in the same direction, price will go in the right direction strongly. The only problem can be a diminution of liquidity, but I don't understand how it could affect the edge ? It should enhance it at best, no? please enlighten me thanks Jeff
If the USA gives away their defense secrets to the rest of the world what do you think will happen? Will it make their defense better? What about Google giving away their search algorithm?
When you see it, BET big.
  • #3
  • Sep 6, 2020 9:38am Sep 6, 2020 9:38am
Quoting Rennaissance
{quote} If the USA gives away their defense secrets to the rest of the world what do you think will happen? Will it make their defense better? What about Google giving away their search algorithm?
not the same thing.

do you think scientists sharing their discoveries will improve science ? YES it will
  • #4
  • Sep 7, 2020 12:06am Sep 7, 2020 12:06am
Quoting ionone
{quote} not the same thing. do you think scientists sharing their discoveries will improve science ? YES it will
So far as the area the discovery is made is not competitive. Yes! Scientists involved in competitive fields dont publish their findings. Not everything we know of as a specie is in textbooks. From my experience real, tangible and pertinent information is not found in textbooks.
When you see it, BET big.
  • #5
  • Sep 7, 2020 12:44am Sep 7, 2020 12:44am
Quoting Rennaissance
{quote} So far as the area the discovery is made is not competitive. Yes! Scientists involved in competitive fields dont publish their findings. Not everything we know of as a specie is in textbooks. From my experience real, tangible and pertinent information is not found in textbooks.
can you explain with detail how the edge woul wear off in case of trading only?
  • #6
  • Sep 7, 2020 1:31am Sep 7, 2020 1:31am
Quoting ionone
{quote} can you explain with detail how the edge woul wear off in case of trading only?
You will be competing at your entry price. Lets say you want to buy at 10, you believe the price is going to 15. If alot of traders come to know of that information, everyone places buy stops at 10. Because there are too many buyers at 10, price will jump to 13 or 15 instanly. So instead of getting filled at 10, you might only be filled at 13 or 14. Wiping away all your profit potential.

Second, even if the market is liquid enough to were you can all get filled at 10; who will be left to bid the price to 15. You need others to buy after you and bid the price to 15 to make a profit. Result, price starts moving in the opposite direction and take away all your stop losses ( we say the market is bought out).

Third, if you want to buy at 10; someone has to sell at 10. Trading being a zero sum game. If the people who are bearish get to know that they will get swindled at 10, they will not be willing to take the other side of your trade. Result, price stays at 10. These are the ranges you see on your charts. A range is simply a phase of the market when buyers and sellers don't want to do business with each other. Everyone suspecting the other side has some information or advantage on them.

These things happen on a micro level which then translates to a macro level. The price is simply the sum total of these descisions made by traders. Cheers
When you see it, BET big.
  • #7
  • Edited 9:28am Sep 7, 2020 8:03am | Edited 9:28am
when you set a slippage value in the OrderSend function, if price jumps to 13 or 15, won't the order be canceled if you set a slippage value small enough ?
i'm not sure about it.
  • #8
  • Sep 20, 2020 10:00am Sep 20, 2020 10:00am
In my opinion, it looks strange because I don't see a pattern that profit depends on the number of people who trade in one direction or another. Then what's the point of forums if we can't share information and observations here, because that's what helps us to find some new ways and learn something new. I don't think it's good not to share information with other traders. But in general, it's probably a personal matter of everyone, probably, there are traders who are convinced that they should keep silent about everything and enjoy all the benefits only by themselves. I don't know, it's a difficult question... Probably, I should think about it in more detail.
  • #9
  • Sep 20, 2020 10:06am Sep 20, 2020 10:06am
Quoting Cogra
In my opinion, it looks strange because I don't see a pattern that profit depends on the number of people who trade in one direction or another. Then what's the point of forums if we can't share information and observations here, because that's what helps us to find some new ways and learn something new. I don't think it's good not to share information with other traders. But in general, it's probably a personal matter of everyone, probably, there are traders who are convinced that they should keep silent about everything and enjoy all the benefits...
Yeah you should. Find a gold mine and go tell the whole world about it huh ..
When you see it, BET big.
  • #10
  • Sep 20, 2020 10:50am Sep 20, 2020 10:50am
Quoting Rennaissance
{quote} Yeah you should. Find a gold mine and go tell the whole world about it huh ..
It depends on the gold mine. Not All gold mines are the same. There is gold almost everywhere, but the concentrations are low and most of it is not cost effective for mining. The spending required for investment and energy cost cannot be covered by the profit from the extracted gold. In other words the return on investment ROI is below 1 and so you have negative expectancy. Forex trading is exactly the same. Most of the easy/high RR gold is depleted. Now you have to dig deeper in harder places. Most cases you are lucky if break even.
  • #11
  • Sep 20, 2020 10:51am Sep 20, 2020 10:51am
Hi Guys,
An edge wears off for a trend trader when markets start ranging. For a range trader, an edge wears off when the markets start trending. Strike a balance between both and you could be onto something. Layman's term answer.
There never ever will be an agreement with price and this keeps the market ticking. There never ever will be an appropriate answer to all these questions.
Just my .02 cents.

Cheers.
Trade to trade another day
  • #12
  • Edited 11:40am Sep 20, 2020 11:01am | Edited 11:40am
Except on extremely rare occasions (and never caused by small retail traders alone), its an illusion. So in our case, and I know this goes against what many here believe, but its not the edge that wears off, Its the strategy. All strategies wear off, as the market is forever changing. The successful traders adapt or drop their strategy as the market changes constantly and forever will. Creating a successful strategy is the easy part, as pompous as that sounds ....

Sometimes we just dont want to share our hard work for many other reasons but rather repeat the common answer and lie (sometime to ourselves), than tell the truth.

Last time I shared one of my strats, the person I thought was goodhearted put it up for sale....
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #13
  • Sep 20, 2020 12:32pm Sep 20, 2020 12:32pm
Quoting Rennaissance
{quote} You will be competing at your entry price...... . Cheers
This pretty much says it all...and in any event, why would anyone with a proven edge want to? (I'm not saying you do and understand you are probably asking just an academic question.) Going off to a tangent a bit from the original question but related to it - Trading is s competitive business..we should see other market participants or potential market participants as our competitors. To this extent you would not reveal the mechanics behind your usp/competitive edge to competitors in any other commercial field, and it follows then that you would not in trading.
Trader with an Edge.
  • #14
  • Sep 20, 2020 12:38pm Sep 20, 2020 12:38pm
Quoting Headland
{quote} This pretty much says it all...and in any event, why would anyone with a proven edge want to? Going off to a tangent a bit from the original question but related to it - Trading is s competitive business..we should see other market participants or potential market participants as our competitors. To this extent you would not reveal the mechanics behind your usp/competitive edge to competitors in any other commercial field, and it follows then that you would not in trading.

I 100% agree with you, for a group of million$ market moving traders. But all that reasoning does not apply, and far from it, to us. The little-medium traders are not in competition with each other at all, but I get your point.
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #15
  • Sep 20, 2020 12:49pm Sep 20, 2020 12:49pm
Quoting ionone
I don't understand how releasing a working strategy to the public can make it stop working If a lot of people trade at the same time in the same direction, price will go in the right direction strongly. The only problem can be a diminution of liquidity, but I don't understand how it could affect the edge ? It should enhance it at best, no? please enlighten me thanks Jeff
The market makers move in the opposite direction of retail traders, so if retail traders are doing the same the MM's will move it in the opposite direction.. as simple as that.. I suggest you to lookup 'IG Market sentiment'
  • #16
  • Sep 20, 2020 1:01pm Sep 20, 2020 1:01pm
Quoting mtruefx
{quote} The market makers move in the opposite direction of retail traders, so if retail traders are doing the same the MM's will move it in the opposite direction.. as simple as that.. I suggest you to lookup 'IG Market sentiment'

Exactly ! But if ENOUGH retail traders are doing the same. Forex forums will not make the difference, and far from it.
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #17
  • Sep 20, 2020 1:21pm Sep 20, 2020 1:21pm
Retail traders aren't going to change the price. They account for less than 5%.
Love to talk on Discord: DividendGamer#1324
  • #18
  • Sep 20, 2020 1:24pm Sep 20, 2020 1:24pm
Quoting mtruefx
{quote} Definately, the most successfull traders are going under the radar.. not going to forex forums, selling signals or mentoring
Very true, but that doesnt mean their strategy 's success will last any longer than if they shared it. But I get why one would need to believe that.
If I don't mention SL and/or TP = longer-term setup possibly in the works!
  • #19
  • Sep 20, 2020 2:36pm Sep 20, 2020 2:36pm
First of all, it is controversial, as most, if not all trend strategies, if traded on the annual trend ONLY, do have an edge, nobody or nothing can wipe it out... Annual trend only, with just fewer trades in use.

Now the controversial part. There are NONE, zero, nil, public strategies, offering an egde, in anything below the annual trend.

There are successful private strategies. Probably their number is not so low, my uneducated guess is, likely, they will never go public.

And we can see? The annual trend? It is successful, but nobody cares... As the account is not doubled every day/week/month and 1,000%, 4,400%, 10,000% or higher %s never get reached with that...

How is that, there is not any edge around, or the edge just wears off?!?
Maadik Hugiis. IQ 69.
  • #20
  • Sep 21, 2020 3:14am Sep 21, 2020 3:14am
Quoting mtruefx
{quote} The market makers move in the opposite direction of retail traders, so if retail traders are doing the same the MM's will move it in the opposite direction.. as simple as that.. I suggest you to lookup 'IG Market sentiment'
market makers don't move the markets, they just provide liquidity and make money on the spread
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