Setups are bunk? | Page 2 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Trading Systems or Trading Setups 9 replies

How to get back in with Mouteki setups? 3 replies

High Probability Trading Setups for the Currency Market 6 replies

EURUSD setups 17 replies

Current Weekly Price Action Setups 1 reply

Attachments: Setups are bunk?
Exit Attachments

Setups are bunk?

  • #21
  • Jan 1, 2022 11:03am Jan 1, 2022 11:03am
Quoting Shabs19
What you mean expensive? What level of data is required, delayed or Real ? No you don't, this is all the garbage that the OP is talking about here.
If you want to test the things you can use delayed data, for real trading you must use real-time data. How you can find the imbalances if you don't have a data? Impossible.

I think the problem is not about indicators/setups. Problem that people are using them incorrectly.
For example why not to use RSI or Stoch not for entry but to exit? And everything will be perfect.

People don't understand that on forex there are only 5 data available: open, close, high, low and time. So you literally can use ANY indicator. They are all the same. The difference is only how it draw the data for you. That's why if you are using #6 - volume, you have a little competitive advantage. If you are using your custom approach - you are adding some % to your win rate. It is like in game. Standard retail ignorant has 20 points. If you know how much 2+2 is you have 21, if you are using volume data then 22, if you auto monitor the market - 23. And so on.
Observer effect
  • #22
  • Jan 1, 2022 11:39am Jan 1, 2022 11:39am
Quoting ryuryu
{quote} If you want to test the things you can use delayed data, for real trading you must use real-time data. How you can find the imbalances if you don't have a data? Impossible.
How accurate is your futures data if the sample size you choose is so small compared to FX ?
Futures total volume is $11.6 trillion annually, whereas Forex Volume is approx. $5 Trillion a day !!

True all indicators use the chart data that is available, so they should all give the same output, except they often don't.
Now you are on the hunt for the magic formula /setting / indicator.

All those squiggly lines & bright colours look very pretty and sells courses & training for the noobs.

Welcome to the ride - before you realise it you have wasted many years & money to come back full circle.
It never gets easier, you just get better
  • #23
  • Jan 1, 2022 12:10pm Jan 1, 2022 12:10pm
Quoting Shabs19
{quote} How accurate is your futures data if the sample size you choose is so small compared to FX ?
It is pretty accurate. I don't know how it works but forex replicate futures data few milliseconds later. Always. Newer saw the difference.

Quoting Shabs19
Futures total volume is $11.6 trillion annually, whereas Forex Volume is approx. $5 Trillion a day !!
Where did you get these numbers? I think it is not true. Why you believe in that? I think crypto market has more volume than forex. Forex is dead. There are no trillions for sure.

Quoting Shabs19
True all indicators use the chart data that is available, so they should all give the same output, except they often don't. Now you are on the hunt for the magic formula /setting / indicator. All those squiggly lines & bright colours look very pretty and sells courses & training for the noobs. Welcome to the ride - before you realise it you have wasted many years & money to come back full circle.
Indicators are just instruments. They are not good or bad. If you don't know how to use instrument that doesn't mean the instrument is broken. For example if you want to know the average close price for 2 candles back you need to add one close value to another and divide on 2. How this can be good or bad? It is just basic mathematics. The same with indicators: please don't say they should give same output but often don't. It looks like you think they act differently each time but they don't.
Observer effect
  • #24
  • Edited 12:44pm Jan 1, 2022 12:25pm | Edited 12:44pm
Quoting ryuryu
{quote} Where did you get these numbers? .
You say treat it like a business, but you don't know how to research ?

Just google it......................

Attached Image (click to enlarge)
Click to Enlarge Name: 2022-01-01_18h19_09.png Size: 161 KB
Attached Image (click to enlarge)
Click to Enlarge Name: 2022-01-01_18h28_51.png Size: 19 KB

Thats the whole futures market, not just currencies ($11.6 trillion dollars annually).
Forex Currencies is approx. $5 trillion daily.

Before you ask, a quadrillion is 1000 trillion. ( 1 followed by 15 zeros).

Indicators only tell you what happened a few bars ago, they lag. I didn't say they don't work. You will play about with settings for years and not find the right one.
Your research on Indicators seem to be limited also.
It never gets easier, you just get better
  • #25
  • Jan 1, 2022 12:56pm Jan 1, 2022 12:56pm
Quoting Shabs19
{quote} You say treat it like a business, but you don't know how to research ? Just google it...................... {image}{image} Thats the whole futures market, not just currencies ($11.6 trillion dollars annually). Forex Currencies is approx. $5 trillion daily. Before you ask, a quadrillion is 1000 trillion. Indicators only tell you what happened a few bars ago, they lag. I didn't say they don't work. You will play about with settings for years and not find the right one. Your research on Indicators seem to be limited also.
Why I must believe some random guy who post an article on the website and don't believe my own eyes and data?
For example there are a lot of articles where gurus say that stochastic/RSI shows oversold and overbought areas. But it is not true. It is lie. And the same lie is everywhere.

There are definitely no trillions on forex.

Indicators are just instruments. If you are a photographer there is nothing wrong with changing settings of your camera if required by lighting or exposure.

Quoting Shabs19
Indicators only tell you what happened a few bars ago, they lag.
No they don't.
This is another fairy tale from the internet repeated trillion times. There are no lagging functions in their formulas. Indicators are showing only what you want them to show.
(Of course I'm not talking about special fake repainting indicators.)
Observer effect
  • #26
  • Jan 1, 2022 1:06pm Jan 1, 2022 1:06pm
Quoting ryuryu
{quote} Why I must believe some random guy who post an article on the website and don't believe my own eyes and data? For example there are a lot of articles where gurus say that stochastic/RSI shows oversold and overbought areas. But it is not true. It is lie. And the same lie is everywhere. There are definitely no trillions on forex. Indicators are just instruments. If you are a photographer there is nothing wrong with changing settings of your camera if required by lighting or exposure. {quote} No they don't. This is another fairy tale from the...
So I must believe you and not the CME or the Banks annual reports.

Give me a Break please..............................

https://www.bis.org/publ/qtrpdf/r_qt1912f.htm
It never gets easier, you just get better
  • #27
  • Edited 3:12pm Jan 1, 2022 2:59pm | Edited 3:12pm
Quoting ryuryu
There are definitely no trillions on forex.
How could you possibly say that? Forex isn't just like Futures or Equities which these days are largely being run as gambling/wealth transfer games. Forex is literally involved in all international trade. If a US importer wants to buy a carrier vessel load of German Cars, the banks must take the importer's US Dollars and turn them into Euros to pay the German exporter. Forex is basically all transactions in the world, involving two different currencies....add to that the speculative activities built up on the back of this, and of course the Forex market is going to dwarf every other financial market.


Quoting ryuryu
{quote} Problem that people are using them incorrectly. For example why not to use RSI or Stoch not for entry but to exit? And everything will be perfect. People don't understand that on forex there are only 5 data available: open, close, high, low and time. So you literally can use ANY indicator. They are all the same. The difference is only how it draw the data for you. That's why if you are using #6 - volume, you have a little competitive advantage. If you are using your custom approach - you are adding some % to your win rate. It is like in...
It is hard to argue against volume not being meaningful, like say if Bitcoin breaks out to a new high on a quarter of the volume of the previous high, that has to tell the trader something that price alone does not, with volume divergence being way more meaningful than momentum divergence, which only really tells the trader that price acceleration has slowed down from what it once was (yeah, and so what?).

I think the problem with indicators comes when traders start to rely on them for actual setups, other than to merely assist in giving a visual representation of the market.....which of course is precisely what millions of traders around the world, have been taught to do, including myself. We are taught that we must have a trading plan, and have a big checklist of 'reasons' for taking a trade and rules governing trade entries etc etc, all written down and printed out on our desks and rigidly adhered to. We are taught to scold ourselves if we deviate from 'the plan' and pat ourselves on the back if we followed our rules (even if the trade was a loser). With the idea that this gives the trader confidence in his actions and makes him 'consistent'. Like a set of bicycle stabilisers for traders to reassure them and make them feel safe, like they really have something to grab onto.

But aside from the obvious analogy of only getting limited performance out of a bike with stablisers fitted to them, I am coming to the conclusion, that all these indicator based strategies tend to only work, if the trader has already chosen a good trade location. However, many times when a trader chooses a good trade location, the setup integrating the use of indicators will not give an entry signal. Also, the times when price will enter into these key areas is quite rare and often fleeting, leaving 'all the other times', where price can pretty much go anywhere it wants. Now very often, during these 'other times', when the trader is basically using their indicators to define the trade location, the system will flash trade entry signals which just get the trader rinsed time and time again.

Think about it. A bears reversal divergence in MACD or RSI can usually be construed at the same time as a bull's hidden divergence. Whoever had the correct bias will win, or perhaps if the trade location was poor, then both of them will lose as much of the time the market simply seeks pools of liquidity (a.k.a Stop Loss orders) which brings me back to a successful trade basically being based on choosing the right spot, where the indicators just cannot be relied upon to give the trader his entry signal.
  • #28
  • Jan 1, 2022 3:33pm Jan 1, 2022 3:33pm
Quoting MatDerKater
{quote} which brings me back to a successful trade basically being based on choosing the right spot, where the indicators just cannot be relied upon to give the trader his entry signal.
You have hit the nail right on the head.

Embarking on a business without research of any kind must be one of the reasons why the failure rate is so high.

Apart from being misled by gurus, into thinking indicators will give signals when to Buy / Sell
It never gets easier, you just get better
  • #29
  • Jan 1, 2022 3:48pm Jan 1, 2022 3:48pm
At least now we know why most traders lose all their money! It's because of indicators!

That's why there are so many free indicators available! it's all a world conspiracy
Observer effect
  • #30
  • Jan 1, 2022 4:05pm Jan 1, 2022 4:05pm
Quoting ryuryu
At least now we know why most traders lose all their money! It's because of indicators! That's why there are so many free indicators available! it's all a world conspiracy
Attached Image
It never gets easier, you just get better
  • #31
  • Jan 1, 2022 4:07pm Jan 1, 2022 4:07pm
Quoting ryuryu
At least now we know why most traders lose all their money! It's because of indicators! That's why there are so many free indicators available! it's all a world conspiracy
This is clearly not the reason.

By definition, every indicator in existence is always 100% correct. As sure as water is wet, if your RSI is above 70, the output is 100% correct That does not mean the Market is "overbought" and must change direction, it only means that the resulting calculation of the RSI based on the parameters it was given is above 70.

Most traders lose because they think the fact that their RSI is above 70 means the Market has to fall. But in reality, the Market does not have to do anything. Whereas some successful traders see their RSI above 70 and say, "The trend is strong. If I'm not long, I should be. But if I don't get long, I absolutely don't want to be getting short".

Therefore, most traders don't lose because of indicators, they lose because of their misguided use of them.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #32
  • Jan 1, 2022 4:09pm Jan 1, 2022 4:09pm
No indicator will help you if you don't know how to use them.
Yes they are lagging, but combine it with PA and the insight that they lag.

And stop cluttering them all over your screen jesus.
  • #33
  • Jan 1, 2022 5:42pm Jan 1, 2022 5:42pm
Quoting Naves
No indicator will help you if you don't know how to use them. Yes they are lagging, but combine it with PA and the insight that they lag. And stop cluttering them all over your screen jesus.
Attached Image (click to enlarge)
Click to Enlarge Name: csm_fuchs-tiere-urlaub-erleben_01_1be2587c90.jpg Size: 39 KB
  • #34
  • Jan 1, 2022 6:39pm Jan 1, 2022 6:39pm
Quoting Naves
No indicator will help you if you don't know how to use them. Yes they are lagging, but combine it with PA and the insight that they lag. And stop cluttering them all over your screen jesus.
Perhaps you could demonstrate how you use your indicators the 'right' way? Let all us novices in on the secret sauce?

Oh, and everything I have on my screen is there for a reason. If it wasn't, it wouldn't be there....(although I did rid myself of the 8ema just then)
  • #35
  • Jan 1, 2022 11:42pm Jan 1, 2022 11:42pm
Quoting HiddenGap
{quote} This is clearly not the reason. By definition, every indicator in existence is always 100% correct. As sure as water is wet, if your RSI is above 70, the output is 100% correct That does not mean the Market is "overbought" and must change direction, it only means that the resulting calculation of the RSI based on the parameters it was given is above 70. Most traders lose because they think the fact that their RSI is above 70 means the Market has to fall. But in reality, the Market does not have to do anything. Whereas some successful traders...
RSI does not show overbought. It can't. It has no volume data it its formula. People lose because they read fairy tales about oversold and overbought areas and repeat that bs for years every day on forums. But they can't find 5 minutes to google RSI formula to stop posting nonsense.

It is very strange to use oscillator to determine the trend. Because of the nature of oscillators. They has fixed range, so they are useless for that.

I said many times: use an axe to chop the wood and a spoon to eat the soup. People are using indicators in wrong way and claim they are the key problem of their losses. Key problem of their losses is their ignorance only.

Quoting Naves
es they are lagging, but combine it with PA and the insight that they lag.
No, they are not. There are no lagging function in theit formulas. They are showing exactly what you want them to show.
if you set 14 as a period for your RSI it is not showing 15, it is showing 14. There are no lag.

This is exactly what I'm talking about: you are repeating again and again another forex fairy tale called "lagging indicators".

Not the indicator is the problem of losses. Problem is that people read and repeat again and again same bs not even trying to understand the real things.
Observer effect
  • #36
  • Edited 6:25am Jan 2, 2022 5:47am | Edited 6:25am
Quoting MatDerKater
{quote} Perhaps you could demonstrate how you use your indicators the 'right' way? Let all us novices in on the secret sauce? Oh, and everything I have on my screen is there for a reason. If it wasn't, it wouldn't be there....(although I did rid myself of the 8ema just then)
The problem which I see are too many convoluted data points.
You are trying to catch situations which are an 1:1 copy of previous ones.
I'm sorry, markets don't behave like that.

What a lot successful discretionary traders are doing is developing a feeling for the market.
Finding the right balance of data points, and then sticking to them until you gain the experience to use them is the key!
Flip-flopping around this indicator, that strategy, add this, remove that, will hinder you to develop said "instinct".

Trading is not just science but also art.


Quoting ryuryu
There are no lagging function in theit formulas. They are showing exactly what you want them to show. if you set 14 as a period for your RSI it is not showing 15, it is showing 14. There are no lag. This is exactly what I'm talking about: you are repeating again and again another forex fairy tale called "lagging indicators". Not the indicator is the problem of losses. Problem is that people read and repeat again and again same bs not even trying to understand the real things.
Weighted vs non-weighted, repainting...
  • #37
  • Jan 2, 2022 6:44am Jan 2, 2022 6:44am
https://www.investopedia.com/articles/active-trading/042114/overbought-or-oversold-use-relative-strength-index-find-out.asp

But I am sure you know better than J Welles Wilder
Attached Image (click to enlarge)
Click to Enlarge Name: 2022-01-02_12h26_21.png Size: 78 KB

"The RSI will rise as the number and size of positive closes increase, and it will fall as the number and size of losses increase. The second part of the calculation smooths the result, so the RSI will only near 100 or 0 in a strongly trending market (https://www.investopedia.com/terms/t/trending-market.asp)."

"The RSI indicator can stay in the overbought region for extended periods while the stock is in an uptrend (https://www.investopedia.com/terms/u/uptrend.asp). The indicator may also remain in oversold territory for a long time when the stock is in a downtrend (https://www.investopedia.com/terms/d/downtrend.asp). This can be confusing for new analysts, but learning to use the indicator within the context of the prevailing trend will clarify these issues".
It never gets easier, you just get better
  • #38
  • Jan 2, 2022 8:21am Jan 2, 2022 8:21am
Quoting Shabs19
https://www.investopedia.com/articles/active-trading/042114/overbought-or-oversold-use-relative-strength-index-find-out.asp But I am sure you know better than J Welles Wilder {image} "The RSI will rise as the number and size of positive closes increase, and it will fall as the number and size of losses increase. The second part of the calculation smooths the result, so the RSI will only near 100 or 0 in a strongly trending market (https://www.investopedia.com/terms/t/trending-market.asp)." "The RSI indicator can stay in the...
That is the problem I was talking about. You are reading total bullshit on the bullshit website. There are so many funny articles, countless bullshit. I'm too lazy to find all that funny stuff for you.

It is impossible to use oscillator to determine the trend. Because it is oscillator!!! It has a range! To determine the trend you have to use moving average, but not an oscillator!!! How can this be not clear?
No forex indicator can show oversold or overbought! Because there are a) no such a data used in their formulas and b) there are no volume data on forex at all!!!
How can this be not clear?

Do you really can't understand it since 2006? Are you kidding me? It is obvious. The trend can be endless. And the oscillator will show "overbought" or "oversold" forever. And to give you data about oversold or overbought first that indicator must check how many lots were sold and how many were bought - to get the delta! But how the world it can show it for you if there are no such a data used in its formula??? And how the world it could be even possible if there are no volume data on forex EVER? Even if in RSI formula there were a block to calculate that it was impossible anyway!

Then you will claim that your losses are because of indicators. Yeah. Indeed. May be problem because you can't understand how much 2+2 is for 16 years!
16 years = 8,415,187 minutes. You need only 5 to check the things, so it was 1 683 037 opportunities, but you missed them all
Observer effect
  • #39
  • Jan 2, 2022 8:45am Jan 2, 2022 8:45am
Quoting ryuryu
{quote} That is the problem I was talking about. You are reading total bullshit on the bullshit website. There are so many funny articles, countless bullshit. I'm too lazy to find all that funny stuff for you.
That is entirely your problem, you are too lazy to do any research, just spouting crap without any basis or evidence.

You have very limited knowledge due to your laziness. Stick with your lagging indicators.

I am correcting your lack of knowledge, not any personal attack on you.
It never gets easier, you just get better
  • #40
  • Jan 2, 2022 9:04am Jan 2, 2022 9:04am
The art of trading is being able to filter the good signals from the false signals.

MatDerkater is correct in saying there are certain price points on a achart where price will turn and then your indicators will confirm a little bit later.
By then the price may have moved too far for you to get in and make a viable profit and risk may have increased enough for you to sit it out and miss the trade.

Your indicators at best are good at confirming the turn but very often these signals are late.
It never gets easier, you just get better
0 traders viewing now