Where's The Edge? | Page 9 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

An Edge for an Edge (System Development) 116 replies

What do you mean by "Trader's Edge"? 17 replies

Odds and Edge - Probabilities in Day Trading 1 reply

Trading edge or following the crowd? 9 replies

What's your edge? 23 replies

Attachments: Where's The Edge?
Exit Attachments

Where's The Edge?

  • #161
  • Oct 29, 2022 1:46am Oct 29, 2022 1:46am
Quoting RickM
{quote} Hi Tony Think I mentioned TIME as being one of the most important aspects in find a edge in trading as a scalper.
Hi RickM
The same for me, i use time specifically 1min as my edge to trade.
Back on the day i was at home trading GBP bank rate and there was a very very very big move of 150pips within seconds i lost all my money that day. But i said to myself if I am going to make a descent amount of money I'll have to know the direction of the market before the major announcement... other timeframe didn't have much information like lower time frames.....
I specifically look at the data and know if the event will have full momentum candlestick, stop hunt, or Doji candlestick . It has been working a lot of times and that is how I found consistent..... however in market correction events lower time frames gives a lot of information as well.
I am still learning other trading techiniques , like order flow, Algo trading, auction market theory and experimenting them in demo account. i have enriched myself with a lot of information ,studying is endless and I am ready to study anything worth spending time.

I'd like to think "time is my edge" .
with regards
TonyTepeli.
I live in the future
  • #162
  • Edited 4:00am Oct 29, 2022 3:40am | Edited 4:00am
Quoting Shabs19
{quote} So the conclusion is that the system is not the Edge or can it if it's in the right hands?
You have raised really good questions.


Quoting Shabs19
Edge cannot be found, no matter how hard you look for it?
Edge is math. If you calculate everything then the system is stable and profitable.

Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 12 KB

For example this is result of trading on 2-4 pairs overnight (this night). I have earned 0.61% with no risk on each trade. It was more than 1800 trades. Each trade in average gained only 0.0003388%, but the risk is also 0.0004% max.


Quoting Shabs19
Conclusion must be because it is a Negative Sum Game. Markets keep changing, so past data is useless, only current data can be used ?
Exactly. We are playing against positive sum game player (casino) having negative expectation (fees, swaps, spread, fat finger, connection issues, stupidness, lack of equity, greed, fear).


Quoting Shabs19
The Best attribute of a trader, the most difficult to master - Patience.
Disagree. If you don't have knowledge you can wait forever - nothing will change. Zero data * time = zero. Always.

To outperform traders you have to invest your time, and money. There are no such a things like patience, mood, feelings and so on. Only numbers.

FFT (Forex Fairy Tales) made specially. I thing they were maid with a help of good psychologists and NPL. Because the "dream" is too sweet (trade on the beach easy earning millions). Use free drawing tools and you are billionaire. Everything scream out loud: you have all you need, indicators and drawing tools, youtube videos, acritles, free trading software - all for free. Believe in yourself you is the key! Start earning right now!
But this is the biggest lie.
Observer effect
  • #163
  • Oct 29, 2022 4:18am Oct 29, 2022 4:18am
Quoting ryuryu
. Everything scream out loud: you have all you need, indicators and drawing tools, youtube videos, acritles, free trading software - all for free. Believe in yourself you is the key! Start earning right now! But this is the biggest lie.
Truth told.
I live in the future
  • #164
  • Oct 29, 2022 5:52am Oct 29, 2022 5:52am
Quoting ryuryu
Everything scream out loud: you have all you need, indicators and drawing tools, youtube videos, acritles, free trading software - all for free. Believe in yourself you is the key! Start earning right now! But this is the biggest lie.
As any tool you need to know how/when to use.
  • #165
  • Oct 29, 2022 8:55am Oct 29, 2022 8:55am
Quoting joyny
{quote} As any tool you need to know how/when to use.
Yeah, but we don't have a tool
This is the standard NLP approach: a choice without a choice. It seems to us that hundreds of indicators are available to us, and it is possible to find some combination that will generate profit. In fact, we don't have any hundreds of indicators. They're all the same. All they do is show some average value of the closing price.
Observer effect
  • #166
  • Edited 5:16am Oct 30, 2022 4:11am | Edited 5:16am
Quoting ryuryu
{quote} Yeah, but we don't have a tool This is the standard NLP approach: a choice without a choice. It seems to us that hundreds of indicators are available to us, and it is possible to find some combination that will generate profit. In fact, we don't have any hundreds of indicators. They're all the same. All they do is show some average value of the closing price.
we can get different sets of patterns and build portfolious of them. Imagination is only limitation. We can use any pattern..even weird.. see my thread about "Notable numbers"..bulshit right? But forwardtests of 2020 till 2022 show that even weird "strategies" might be profitable.

Here example 1 singular pattern performed ok 10 years in history and now 3 years on real account:

Attached Image (click to enlarge)
Click to Enlarge Name: IMG_20221030_110718.jpg Size: 216 KB


And this is 1 singular entity only... Combine portfolious of hundreds of them.
  • #167
  • Edited 5:45am Oct 30, 2022 5:35am | Edited 5:45am
Quoting joyny
{quote} we can get different sets of patterns and build portfolious of them. Imagination is only limitation. We can use any pattern..even weird.. see my thread about "Notable numbers"..bulshit right? But forwardtests of 2020 till 2022 show that even weird "strategies" might be profitable. Here example 1 singular pattern performed ok 10 years in history and now 3 years on real account: {image} And this is 1 singular entity only... Combine portfolious of hundreds of...
Don't think notable numbers is bullshit. I'm playing around "round beautiful number" for a while, and with vol data it works just crazy.
Degen gamblers believe in all the shit magic, so it works.
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 8 KB

The logic of my BBN bot (binance beautiful number) is that:
- check high or low of the candle
- check if it was LL or HH accordingly
- send message and send asset to ban list for X minutes

Now you can see where price came from: from the top or from the bottom. So with huge vol it works always like bounce point.
Observer effect
  • #168
  • Oct 30, 2022 11:09am Oct 30, 2022 11:09am
Quoting ryuryu
{quote} Don't think notable numbers is bullshit. I'm playing around "round beautiful number" for a while, and with vol data it works just crazy. Degen gamblers believe in all the shit magic, so it works.
nice

seems volume data is another dimension of how to make patterns.. so many combinations are possible..

im gona make some threads like "Trading is as simple as Do-Re-Mi" math based on this article - porting prices to sounds and then trading Mozart, Beethoven etc patterns
  • #169
  • Oct 30, 2022 8:51pm Oct 30, 2022 8:51pm
i think an edge can appear from accumulated knowledge and experience. hopefully about your preferred trading style, and preferred strategies. it is too simplistic to suggest an edge is a trader's psychology. but, it is also pretty easy to see all the good traders have an edge over us from that angle. the edge you want is with good decision making. before, during, and after a trade.
  • #170
  • Oct 31, 2022 3:07am Oct 31, 2022 3:07am
The biggest High-Frequency trader in roughly 3 years:
one single losing day!!!!!!!!!!!!!!!

No edge, they just flip a coin and pray, I guess they were just lucky. (Right???)

In my humble:
-Lots of cash.
-Army of top traders
-Army of programmers.
-Top hardware (I mean top).
You can call that an edge if you like.
The pic is in German but I hope you can read the graph.
Goldmann had 150 losing days in the same 1238 trading days period (not bad for a newby right?).
Goldmann also prays, but to a different God.
Attached Image (click to enlarge)
Click to Enlarge Name: go.png Size: 40 KB
  • #171
  • Oct 31, 2022 4:31am Oct 31, 2022 4:31am
Hi how is everyone's trading going? Good question indeed about where is the edge...

In my opinion the only thing we can do is following this process to have an edge in the markets:

1. Find a repeatable pattern.
2. Test the repeatable pattern over tens of years to collect a good sample size.
3. If finally you find something that works, set boundaries to control live performance.
4. Trade the pattern with as low as possible human error involved.
5. Go look for a new strategy to diversify your portfolio.

This has been working for me for a long time, and it allows you to improve while getting more strategies in your toolkit, if one edge ever dissapears, you have a next one ready to be added.

Good thread mate!
The.PAI.Strategy All Time Return: 109.8%
  • #172
  • Edited 6:49am Oct 31, 2022 6:29am | Edited 6:49am
Quoting profectusai
Hi how is everyone's trading going? Good question indeed about where is the edge... In my opinion the only thing we can do is following this process to have an edge in the markets: 1. Find a repeatable pattern. 2. Test the repeatable pattern over tens of years to collect a good sample size. 3. If finally you find something that works, set boundaries to control live performance. 4. Trade the pattern with as low as possible human error involved. 5. Go look for a new strategy to diversify your portfolio. This has been working for me for a long time,...
That's a great summation of one way to find/trade an edge.. and it is the way I too trade. A portfolio of self-found repeating patterns (that grahically represent repeating patterns of market behavior) make up my technical edge, and it is important to optimize your risk/money management to each pattern's historical performance. Of course, having an edge is not the same as being actually able to make money from it consistently and reliably, and this is where developing the right psychology to trade that particular edge comes in. Some 'traders' may never do it, while others will. For most the pattern is the easy bit, the psychology screws them though. They just can't stay focused/patient/disciplined enough/control these and other emotions to wait for the pattern (s) to set up and then trade them per the rules layed down re risk/money management that make sure they are profitable over any given sample trading them.
Trader with an Edge.
  • #173
  • Oct 31, 2022 9:06am Oct 31, 2022 9:06am
Quoting gepards
{quote} nice seems volume data is another dimension of how to make patterns.. so many combinations are possible.. im gona make some threads like "Trading is as simple as Do-Re-Mi" math based on this article - porting prices to sounds and then trading Mozart, Beethoven etc patterns
Yes, everything works if using volume data. For example now we have this picture:
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 28 KB

As you see here we have doge with 690k$ vol per minute and 1% distance
and XRP with 134k$ per minute and 0.37% distance.

Now tell me what is the reason to trade XRP today? doge has 5x times more volume. And the distance is 3x times wider.

Now you can try any approach you like: moving average cross, RSI >80 or any other you like - everything will work just fine.
The key here is volume. No vol data = you just blind.
Observer effect
  • #174
  • Oct 31, 2022 2:49pm Oct 31, 2022 2:49pm
Quoting Headland
{quote} That's a great summation of one way to find/trade an edge.. and it is the way I too trade. A portfolio of self-found repeating patterns (that grahically represent repeating patterns of market behavior) make up my technical edge, and it is important to optimize your risk/money management to each pattern's historical performance. Of course, having an edge is not the same as being actually able to make money from it consistently and reliably, and this is where developing the right psychology to trade that particular edge comes in. Some 'traders'...
Exactly the patterns are rather easy to find if you put in years of hard work, but even providing someone a full strategy that works.. human error mostly makes them fail due to:

1. Missing trades (routine issues)
2. Skipping trades (confidence issues)
3. Miss managing trades (fear/greed)
The.PAI.Strategy All Time Return: 109.8%
  • #175
  • Nov 7, 2022 3:21am Nov 7, 2022 3:21am
Quoting RickM
{quote} Which provides the last question. If achieving a trading edge is so hard, why do traders waste their hard earned income so easily by giving it to their local broker as a grift by trading a live account when they have nothing?. No one better say to be they want to trade a live account because they want to feel real emotions. They are just fools. Even today as a Futures trader, I spend 30 minutes a day practicing extreme scalping drills to sharpen up before I start trading my live account. I need a SIM account to “warn up” and get the “feel...
Hi Rick,
This is the most obvious and the the least thought of preparation for trading that I and most traders overlook imho

It makes so much sense all players have a warmup before any games.

Cheers
Barry
  • #176
  • Nov 8, 2022 8:35am Nov 8, 2022 8:35am
Hi all,

I think the edge is nothing more than putting the probabilities in your favor and combining this with corresponding risk management and R/R ratio.
Do a manual backtest of the strategy and if it proofs to be profitable then trade it life with small risk for about 100 trades to see how it works out in real life, once confidence is there gradually improve your position sizing to comfortable levels.

Question to you guys, the main strategy I use has a win-ratio of about 50% with a 1:1.5 R/R, it’s somewhat like below:

 

  1. Daily timeframe must be in an uptrend/downtrend and pullback to min. the 20EMA in order to validate any trades
  2. Price must be either within structure levels or Fib levels, preferably both; confluence zones
  3. Entry on price action patterns smaller timeframe (usually 1HR), double bottoms/H&S with RSI overbought/sold


Stops I usually place abt 0.5 ATR from swing low/high.

I’m looking to slightly increase my winning ratio to 55-60% by filtering out bad trades (fundamental/trading against momentum/etc..)
For example I’m trying to stay out of trades that showed a reversal pattern on the daily before pulling back (i.e. double top), also I’m informed about the economic calendar and do not trade before any market moving news.

Out of all you guys experience, what would you recommend me to do to filter out more possible bad trades and higher my probability for taking only the best trades?

Thanks for your help in advance.

Br, Peter.

  • #177
  • Nov 8, 2022 2:45pm Nov 8, 2022 2:45pm
Quoting PetyaNL
Out of all you guys experience, what would you recommend me to do to filter out more possible bad trades and higher my probability for taking only the best trades?
consider time.. when to enter..Sydney, London, New York sessions? Maybe that gives some impact to filter out losers?

not all days are the same...

Quote
Tuesday, Wednesday and Thursday are the best days for Forex trading due to higher volatility. During the middle of the week, the currency market sees the most trading action. As for the rest of the week, Mondays are static, and Fridays can be unpredictable.
  • #178
  • Nov 9, 2022 1:05am Nov 9, 2022 1:05am
Quoting gepards
{quote} consider time.. when to enter..Sydney, London, New York sessions? Maybe that gives some impact to filter out losers? not all days are the same... {quote}
Hi Gepards,

Thanks for your reply.

I'm a swing trader and typically holding trades ranging from one day till one week. I've read and considered to avoid entering on Monday's and Friday's, but my impression is this won't influence the outcome of the setups too much.

I have been thinking to only take setups that are in line with the sentiment and momentum, to avoid going against the market current eventhough I'm trading with the overall higher timeframe trend. But find it difficult to judge the sentiment and momentum correctly. I've used some currency strength meters, but they only show the current situation and are therefor not of much help, as currencies usually show some strength on pullbacks and weakness on continuation. Also risk on/off I've been trying, but have the feeling that this is as changeable as the weather and often contradicting each other.

Do you or others have any idea what I can do and/or are there different ways to filter out lower probability trades?

Thanks again for replying and your willingness to help out.

Br, Peter.
  • #179
  • Nov 9, 2022 7:17am Nov 9, 2022 7:17am
I think the edge lies in realizing that the market is neither random nor ordered, but random and ordered at the same time.
There are patterns of change between equilibrium and disequilibrium.

Each equilibrium state is temporary and in itself is part of a higher disequilibrium.
Each disequilibrium state is temporary and part of a higher equilibrium.
This you can call distribution.

It is not even alternating sequences of chaos and order, but a simultaneity of both.
Chaos settles into order and order breaks down into chaos.
The edge lies in identifying the points of buildup and breakdown of these two, seen within the framework of higher order and disorder.
These points are what one can call momentum.
  • #180
  • Nov 10, 2022 2:25pm Nov 10, 2022 2:25pm
Quoting tommydoginti
My belief is the edge is a probabilistic puzzle. The reason is I believe market is chaotic, but not random.
I completely agree with this.

The market is only directionally random. But in terms of expansion/contraction of volatility, the distribution of prices is far from "normal".
ri · skuht
0 traders viewing now