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The brutal truth of day trading

  • #1,801
  • Jul 11, 2021 8:56am Jul 11, 2021 8:56am
Quoting bilal1947
{quote} My friend, you dont know ICT yet, but i know a bit of wyckoff Follow what you find easy and more relates to you.
bilal, I know ICT free video lesson. I don't purchase his course so your right I don't know ICT completely.
Keep doing what is working for you.
MA provides the market's current direction and strength.
  • #1,802
  • Jul 11, 2021 3:27pm Jul 11, 2021 3:27pm
Quoting riclater211
{quote} Hey BW, I appreciate the way you speak about the market and this master algo theory. It boarders on religious. Which is great. Your beliefs lead you to profits. Amazing. So many different ways to trade the same markets. My story in Forex is over 20 years old but in a nutshell there isn't much I have not tried. I came to the conclusion that, for myself, indicators are not only a crutch, but a waste of time. Many traders put a lot faith in indicators. The only thing on my chart is a SMA 50 and a SMA 200. Why? Because they are psychological...
Hi riclater, its important for the trader to have a objectively quantified method to know whether the future market is rising or dropping. The trader must have done enough research to determine the future direction. It does not matter what tools he use, that's not important. What's important is a consistent objectively quantified approach that he apply the same way everytime. The trader's "secret sauce" so to speak.

You are correct to say that successful traders are crazy, confident, defiant and headstrong. There's no compromise when it comes to making money, earning a living, building asset value. Ofc we all do it our way. Based on our religious belief about the market. Our way has to be the right way to us. We either pay or get paid.

I have shared how I do it. RickM has posted how he does it. Bilal has posted how he does it. We all do it differently. Clear, objective and quantified approach. No guessing. That's the point.
Know what you trade
  • #1,803
  • Edited 5:34pm Jul 11, 2021 5:10pm | Edited 5:34pm
Quoting RickM
{quote} Hi BWilliams I think its wrong to say Buyers or Sellers are strong or weak, the strength of market order or sentiment doesn't decide direction of the market. As an example last night on EURUSD, one hour after London open, I can tell you the Buyers Liquidity entering the chart was double the liquidity of sellers. At its climax of Bids over Asks, I saw a top of 3 buying limit orders over one selling limit order for a 20 minute period. Did price go up - YES Was the strong strength of Buying limited orders a easy way to trade the market - NO...
Certainly not a 'better' trader. I just need to wait until I know when 5% of your trades have become losers and when 25% of your trades have become winners. Your 85-15 is my 86-14. Then aim for .03-.07% on winners and .07-.21% of my equity on losers.

It's never concrete math but the idea gets across. There's no point in winning 29.4% of your winners if I can avoid 33.3% of your losers.
"The fun is in the hunt. Not the kill."
  • #1,804
  • Jul 11, 2021 6:13pm Jul 11, 2021 6:13pm
Quoting scherzi
{quote} With m1 data you can test anything on H1 candles and higher. With tick data you can test anything. No difference to live. You can add spread artificially.
Hey scherzi,

I am sorry to tell you, and no disrespect but you could not be more wrong. There is a mountain of difference between back testing old data and live trading. If you do it you will quickly find out that it is true. This topic has been discussed to death all over the place so I will not go into detail unless I must. Maybe you should do some research first.

Good Luck

- Ric
Be humble or get humbled
  • #1,805
  • Jul 11, 2021 7:06pm Jul 11, 2021 7:06pm
I've been reading through many of the posts here and I had a thought - if everybody traded the same way, wouldn't trading be pretty boring?

I thought it was good for us to have our own view on trading. Like for me at this moment, I am trying to understand how to use one market to trade another. I like day trading and many people here are making some really cool points. But I'm trying to see how volume from one market can benefit another if they are two different markets. After some searching I started reading about correlations. Real interesting info. And I'm trying to learn better.

But I don't see why all of you are fighting and arguing.
I believe simple is best
  • #1,806
  • Jul 11, 2021 7:22pm Jul 11, 2021 7:22pm
Quoting ArnoldPike
I've been reading through many of the posts here and I had a thought - if everybody traded the same way, wouldn't trading be pretty boring? I thought it was good for us to have our own view on trading. Like for me at this moment, I am trying to understand how to use one market to trade another. I like day trading and many people here are making some really cool points. But I'm trying to see how volume from one market can benefit another if they are two different markets. After some searching I started reading about correlations. Real interesting...
Many women would likely hold an identical perspective of football (or soccer... doesn't matter what the game is).

But I do agree... If everybody traded the same way it would make contrarian-trading very boring.
"The fun is in the hunt. Not the kill."
  • #1,807
  • Jul 11, 2021 10:26pm Jul 11, 2021 10:26pm
Quoting ArnoldPike
But I don't see why all of you are fighting and arguing.
When people are uncertain what they do then they argue when others tell "you do wrong" or "I do different".

Traders here are uncertain of their outcome. Therefore arguing.
  • #1,808
  • Jul 12, 2021 12:35am Jul 12, 2021 12:35am
Quoting riclater211
{quote} Hey scherzi, I am sorry to tell you, and no disrespect but you could not be more wrong. There is a mountain of difference between back testing old data and live trading. If you do it you will quickly find out that it is true. This topic has been discussed to death all over the place so I will not go into detail unless I must. Maybe you should do some research first. Good Luck - Ric
I am not going to answer your messages since you have indeed shown a lot of disrespect assuming I am not an expert on this topic and whishing me "luck".

Bye.
  • #1,809
  • Edited 1:54am Jul 12, 2021 1:07am | Edited 1:54am
Quoting ArnoldPike
I've been reading through many of the posts here and I had a thought - if everybody traded the same way, wouldn't trading be pretty boring? I thought it was good for us to have our own view on trading. Like for me at this moment, I am trying to understand how to use one market to trade another. I like day trading and many people here are making some really cool points. But I'm trying to see how volume from one market can benefit another if they are two different markets. After some searching I started reading about correlations. Real interesting...
Regarding the use of one market to trade another.

You may just find convergence and divergence of two dependent markets vs a third one leading these two, but you need more than pure correlation; you need an additional structure that can be mostly based on:

  1. Market structure (patterns you have studied and reflect the state of your chart). Problems expressed with non-continuous functions could also be part of this (for instance, imagine a market that is not allowed to change more than 1% a day and there is a gap between day 1 and day 2 after that day 1 had a variation of 1%, the data beyond day 1 is not reachable on day 2 therefore).
  2. Market directionality within a predefined range. for instance, what will USD markets will do today between 7:30 and 11:00 London time?
  3. Market volatility within a time period. This is more complex. There are algorithms one can study to exploit volatility and also deltas with vanilla options.

Without going into detail, what I want to highlight is that linear relationships are very weak if you study raw market data (as you surely will know, correlation is a linear relationship), so you will usually have to frame your study inside a narrative.

For instance, "the USD index is making higher highs, so I am going to track XXXUSD assets to buy below last day's high and sell at or above last day's high while the index continues going up". That could be your narrative and then is when you will start to dissect your chart and hopefully find a function that optimizes your idea.

Using functions is quite useful because it helps you to reduce your personal bias and because you can use it to backtest your setups reasonably well. Perfection is your enemy in trading more often than not, in my opinion, as overfitting is for any stochastic problem.

However, I think that multiple asset tracking is useful when you trade divergences: "The GBPUSD market is falling and the EURUSD market is going up while they usually show a correlation of 0.87, should I either buy or sell one of those markets while expecting a restoration of the equlibrium?, are pounds being sold to buy us bonds and, maybe, we will see a similar program with euros later this week?, are euros being exchanged by pounds because of the current open interest in the futures markets?". Otherwise you may be confused by occassional natural divergences due to apparently random events.

  • #1,810
  • Jul 12, 2021 2:09am Jul 12, 2021 2:09am
Quoting BWilliam
Out of topic, congrats to Argentina winning the Copa America. England to win the Euros tomorrow morning.
Sorry about the loss.

The quarters, semi-finals and the final were easy to predict this year.

Viva Italia!!!!

Thank you Italy for saving us from the big mouths.
  • #1,811
  • Jul 12, 2021 6:31am Jul 12, 2021 6:31am
Quoting riclater211
{quote} Hey scherzi, I am sorry to tell you, and no disrespect but you could not be more wrong. There is a mountain of difference between back testing old data and live trading. If you do it you will quickly find out that it is true. This topic has been discussed to death all over the place so I will not go into detail unless I must. Maybe you should do some research first. Good Luck - Ric
I have spend countless hours backtesting the various strategies I have used and use now. It's why I dismiss indicators for the most part and rely completely on price action and market structure. Backtesting is just a way that I "practice". I don't backtest to verify that something may or may not be profitable because how one acts live is always different. Backtesting to practice has been and continues to be a mainstay of my overall trading.
  • #1,812
  • Jul 12, 2021 7:33am Jul 12, 2021 7:33am
longterm traders are usually more profitable
  • #1,813
  • Edited 10:36am Jul 12, 2021 8:50am | Edited 10:36am
Quoting BWilliam
{quote} Hi riclater, its important for the trader to have a objectively quantified method to know whether the future market is rising or dropping. The trader must have done enough research to determine the future direction. It does not matter what tools he use, that's not important. What's important is a consistent objectively quantified approach that he apply the same way everytime. The trader's "secret sauce" so to speak. You are correct to say that successful traders are crazy, confident, defiant and headstrong. There's no compromise when it...
Hi BWilliam,
Nice read.
Do your consider time? IHMO time is also important when considering master algo? What do you think about that? Thank you
I think time is more important than price.
For example: Within 8 hours it should make L and within 4 hours it should make H.
Another one: I will sell GU till London open and then buy after London open tomorrow
  • #1,814
  • Jul 12, 2021 8:52am Jul 12, 2021 8:52am
Quoting Hodges
longterm traders are usually more profitable
There was a time when I would agree with you on that. But not in today's market. It appears the scalpers and day traders are the ones who are making real money in the Forex market.
Learn from your mistakes and march on.
  • #1,815
  • Edited 4:09pm Jul 12, 2021 1:18pm | Edited 4:09pm
Quoting Winston Reed
{quote} I have spend countless hours backtesting the various strategies I have used and use now. It's why I dismiss indicators for the most part and rely completely on price action and market structure. Backtesting is just a way that I "practice". I don't backtest to verify that something may or may not be profitable because how one acts live is always different. Backtesting to practice has been and continues to be a mainstay of my overall trading.
Hello Winston Reed,

As I said. You can not rely on back test data to give the same result as live forward testing. Despite you and I saying basically same thing, scherzi took offense to me saying it but he thumbs up your post. Interesting.

- Ric
Be humble or get humbled
  • #1,816
  • Edited 6:36pm Jul 12, 2021 4:46pm | Edited 6:36pm
Quoting riclater211
{quote} Hello Winston Reed, As I said. You can not rely on back test data to give the same result as live forward testing. Despite you and I saying basically same thing, scherzi took offense to me saying it but he thumbs up your post. Interesting. - Ric
Hi ric, I agree to an extend which is mostly true. For us who have written codes for alerts and EAs we know the problems. They show up when alerts and EAs don't perform exactly how we want it to for whatever the reason. There're a million more definition to think about, a million problems when applied in live market. Not just the general surface level definition. That's what Winston Reed means by how one act in live market is different. Today's market is different from yesterday's market when we examine the details. .

From my experience there's no way to trade optimally with a bot, at least for retail traders. There's no way to replicate completely manual trading. I have tried, gone down the rabbit hole spent thousands of hours to know that's beyond me. I'm sure you know the problems. For those who have not done it you don't know what you don't know.

Otoh, on the other extreme most traders have not gone down this route to objectively quantify their strategy and trading process. At least some parts must be defined with quantitative measure where possible, to give a proper defined framework. When we read their strategy/method, as coders from a math perspective, we know there's no attempt to apply objective quantitative measure. I insist therein lies the bigger problem of guessing, fooled by randomness. That's why joyny wrote this which is true. The brutal truth.
https://www.forexfactory.com/thread/...9#post13619139
Know what you trade
  • #1,817
  • Jul 12, 2021 5:35pm Jul 12, 2021 5:35pm
Quoting Ihlas
{quote} Hi BWilliam, Nice read. Do your consider time? IHMO time is also important when considering master algo? What do you think about that? Thank you I think time is more important than price. For example: Within 8 hours it should make L and within 4 hours it should make H. Another one: I will sell GU till London open and then buy after London open tomorrow
I understand what you mean. Time is one factor that has to be interpreted in the context with the rest of the information for it to be meaningful. I don't apply time with rigid definition. I see time as "early" or "late" that guide my expectation of the current market.
Know what you trade
  • #1,818
  • Jul 12, 2021 8:24pm Jul 12, 2021 8:24pm
Quoting Redeflect
{quote} Many women would likely hold an identical perspective of football (or soccer... doesn't matter what the game is). But I do agree... If everybody traded the same way it would make contrarian-trading very boring.
yeah I see what you're saying.
I believe simple is best
  • #1,819
  • Jul 12, 2021 8:27pm Jul 12, 2021 8:27pm
Quoting joyny
{quote} When people are uncertain what they do then they argue when others tell "you do wrong" or "I do different". Traders here are uncertain of their outcome. Therefore arguing.
but isn't the whole idea of this, is to see if we get it right? and how many times we can get it right? it looks like unequal opportunity at times.
I believe simple is best
  • #1,820
  • Jul 12, 2021 8:34pm Jul 12, 2021 8:34pm
Quoting scherzi
{quote} Regarding the use of one market to trade another. You may just find convergence and divergence of two dependent markets vs a third one leading these two, but you need more than pure correlation; you need an additional structure that can be mostly based on: Market structure (patterns you have studied and reflect the state of your chart). Problems expressed with non-continuous functions could also be part of this (for instance, imagine a market that is not allowed to change more than 1% a day and there is a gap between day 1 and day 2 after...
thanks for that info scherzi. I have been looking at all kinds of views and I can now see why all those things are important. A friend of mine uses jigsaw trading to see order flow and all that and last night he was trying to show me how some markets are similar. But it was over my head so I asked him to make it simpler. And all he said was with all the markets being open season to everyone now, there's lots of overlap of trading from same people and companies and stuff. Then he was talking about that same stuff you said before. Oh boy! so much going into all this.

OK, back to reading and trying to learn.
I believe simple is best
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