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Intimidated by the Charts

  • #21
  • Aug 1, 2007 1:00pm Aug 1, 2007 1:00pm
Dave,

I read your posts with near delirious fervor. Like you said, picking apart your post piece-by-piece would be ineffective, but I will highlight portions that really struck me and I have a response to. There isn't anything that I disagree with - just stuff to add.

Quoting hanover
What I believe is that faulty MM or psychology will cause failure more quickly than an unprofitable method. ... Hence failure gets constantly attributed to faulty MM/psychology.
Absolutely. The assumption is that an individual trader's problems are always in MM and psyche while the profitable system is the easy part. Well, I think that most everyone is doomed to the randomness of the market, some people just get to play longer because they can manage their (randomly occuring) wins and losses better.

Quoting hanover
Speaking of statistical validity, I fear that many traders have little understanding of the concept. ... Any trend-following system will deliver profit in a trending climate, hence the cliche "don't confuse brains with a bull market".
Not only do most traders not have any concept of probability and statistics, but most people walking around on Earth exhibit no knowledge of the subject either.

Long ago I watched a presentation in a financial class during my undergraduate studies that always stuck with me. It introduced me to the concept that, given any large population of individuals trading financial instruments, just pure statistical happenstance is going to produce a few stellar, winning traders while the vast majority "support" those lucky few with their losses (given that the losses are collected by the winners in a zero-sum environment). The game has less to do with skill and more to do with the fickle finger of fate. Sure, there are things one can do to enhance their changes of success, but as we've already pointed out many of these things (MM & psychology) only prolong account blow-out.

I am convinced the problem is two-fold.

1) Once you mention the word "statistics" people shut off. No one wants to learn about something so hard and boring. RSI and ADX are much more interesting and sexy.

2) No one wants to hear that luck or chance can play a role (a big one) - we want things to depend upon our actions and skills. This goes on all the time - not just with trading. When we excel at work we praise ourselves for such a masterful command we have of our skillsets and how effectively we can employ them to meet a challenge. When we fail, we look for excuses because "had things been different" we would have succeeded (we are masters at commanding our skillsets after all, so we tell ourselves).

Also, look how many people view trading in terms of "earning pips." I see new traders thinking (and sometimes being taught!) to try to earn 10 pips at a time at first, and when one becomes "more skilled" to try to go for more than 10. This advice only looks bad to the trader who realizes that random chance plays a huge role in trading - otherwise this advice seems perfectly reasonable.

Quoting hanover
I also read that a positive outlook is an important ingredient in success. I don't disagree, but would (yet again!) point out that in itself it's not going to overcome any inability of a system to overcome randomness plus costs.
Fabulous point. Am I really to believe that the reason Enron collapsed was not because of mass accounting fraud but instead because management didn't have a "can-do" attitude?

Quoting hanover
I have nothing to lose, and the possibility of financial freedom - however difficult - seems a very worthwhile one.
That sounds good to me! No matter how large my account grows or shrinks, I always tell myself that I'm really only risking $300. I set that amount aside as "losable" money long ago to trade with and always try to think of it in those terms. So really, I have only $300 to lose, which I can handle. On the downside I am out 300 clams. Upside potential is great amounts of wealth. You can think of it as a $300 call option I purchased on my financial future!!

One more thing, I think you may want to pick up a copy of "Fooled by Randomness" by Nassim Taleb. I have a feeling you will not be able to put it down. When I read it, I finally felt like somebody laid out (empirically) what I had been thinking about all along regarding chance and randomness.
  • #22
  • Aug 1, 2007 1:52pm Aug 1, 2007 1:52pm
Dave, great post. I'll have to check out this book you mention.

Great signature by the way, it made me literally LOL. :-)
  • #23
  • Aug 1, 2007 4:27pm Aug 1, 2007 4:27pm
Quoting megadave5000
2) No one wants to hear that luck or chance can play a role (a big one) - we want things to depend upon our actions and skills. This goes on all the time - not just with trading. When we excel at work we praise ourselves for such a masterful command we have of our skillsets and how effectively we can employ them to meet a challenge. When we fail, we look for excuses because "had things been different" we would have succeeded (we are masters at commanding our skillsets after all, so we tell ourselves).
In 1992 I had the good luck to win the New Zealand MONOPOLY championship and an expenses paid trip to represent NZ in the world champs in Berlin (where I finished 13th out of 35 countries represented, for whatever that's worth). I talked with Gary Peters, the Florida-based US champ, and initially thought he was conceited (sour grapes?) when he said something like the game was skill whenever he won, and bad luck when he lost. However, in hindsight, I think I better understand what he meant. He was saying that when his opponents naively allowed him to apply his strategy (obtain and develop the orange properties quickly) then his knowledge of this fact gave him a massive edge, but if he encountered opponents who refused to trade with him, or he simply rolled poor dice (elements outside of his control, and therefore "luck"), there was nothing he could do about it. However, this probably doesn't apply to trading, where we can't outmaneuver our "opponents"..... but yes, we want to believe - whether rightly or wrongly - that trading is skill, to a very large degree, because it places conquering the markets within our grasp.

Quoting megadave5000
Also, look how many people view trading in terms of "earning pips." I see new traders thinking (and sometimes being taught!) to try to earn 10 pips at a time at first, and when one becomes "more skilled" to try to go for more than 10. This advice only looks bad to the trader who realizes that random chance plays a huge role in trading - otherwise this advice seems perfectly reasonable.
Yes, I totally agree that it makes no sense. Also that when comparing whose system is more profitable than whose, counting pips is a meaningless exercise, due to the way different systems scale in/out by using simultaneous or overlapping trades, use different ways of trailing stops or taking profit, etc. More here: http://www.forexfactory.com/showthre...310#post174310
IMHO the true measure of system effectiveness is not pips, but profit factor, i.e. dollars won for every dollar risked, over a given period.

Quoting megadave5000
That sounds good to me! No matter how large my account grows or shrinks, I always tell myself that I'm really only risking $300. I set that amount aside as "losable" money long ago to trade with and always try to think of it in those terms. So really, I have only $300 to lose, which I can handle. On the downside I am out 300 clams. Upside potential is great amounts of wealth. You can think of it as a $300 call option I purchased on my financial future!!
My take on psychology here:
http://www.forexfactory.com/showthre...54#post1498154
My view is that psychology need not be a problem. It's not with me, and I suffer from perfectionism, hypertension and diabetes, and can be a pretty emotional kind of guy.... ask my wife! (BTW, she's wonderful, I'm not ready to sell her just yet )

And, unless I'm missing something, MM is a no-brainer: just risk 1%-2% per trade.... that's the best we can do.

Quoting megadave5000
One more thing, I think you may want to pick up a copy of "Fooled by Randomness" by Nassim Taleb. I have a feeling you will not be able to put it down. When I read it, I finally felt like somebody laid out (empirically) what I had been thinking about all along regarding chance and randomness.
Thanks, I read the book some years ago and thoroughly enjoyed it.

My take on applicability of methods to different market climates here:
http://www.forexfactory.com/showthre...77#post1452677
BTW, this whole thread is about the skill versus luck concept. I enjoyed the challenge of defending my position against the "trading is 100% skill: get your exit/MM right, and you're immediately guaranteed a place in the winner's circle" and "the Holy Grail lies with the trader's mind set, not the system" type posts.

The "disturbing" (actually, very uplifting and hope-instilling!) concept is that there are apparently traders who do make money consistently (several years and thousands of trades equates to statistical validity, IMHO), and therefore must have a system that is genuinely "positive expectancy". These folk have clearly found a recurring inefficiency. I also wonder to what extent they use non-mathematical/non-technical concepts, i.e. FA, and/or simply have studied certain pairs for so long that they've somehow gained an innate "feel" for what is more likely/unlikely to happen, amongst the randomness. I guess that unless/until one reaches this point - the "aha moment" as Dirk du Toit (Bird Watching in Lion Country) describes it - maintaining a degree of pragmatic skepticism (as I do) is, hopefully, understandable.

Quoting megadave5000
Sure, there are things one can do to enhance their changes of success....
In the light of this, I'd value your opinion on the following logic. It's only the spread cost (and possibly broker manipulation/cheating) that make trading a negative sum game; eliminate costs (whose effect are hugely underestimated, IMHO - casinos make a huge profit from a 1%-2% edge) and, at least statistically, one breaks even with random entries and exits. The longer the timeframe traded, the lower the spread cost becomes relative to the move traded, and (if we take only positive carry trades) the more carry gathered; eventually the point must be reached where the carry exceeds the spread. Voila - positive expectancy!

Now, using this positive expectancy method as a starting platform, we add (as you suggest) some of the "things one can do to enhance their chances of success".... here are some of suggestions, off the top of my head:

  1. Trade the pair(s) where the average daily range is greatest, relative to the spread cost.
  2. Trade the pair that pits the strongest currency against the weakest currency, fundamentally and/or technically.
  3. Trade only in the direction of the longer term trends.
  4. Trade only the strongest (long, steep and/or consistent) long term trends.
  5. In a longer term uptrend, enter when the shorter term trend is oversold, and take some profit when it's overbought. Vice versa for a downtrend.
  6. Exploit the trend further by allowing profit on the remainder of the position to ride as long as possible.

Granted, it might not be possible to accommodate all of these points simultaneously. But applying them judiciously, and often, should shift the probabilities significantly further in our favor.

From this mathematical standpoint, then, profitable trading should be very achievable. What do you think?

David

  • #24
  • Aug 1, 2007 4:46pm Aug 1, 2007 4:46pm
Quoting hanover
In 1992 I had the good luck to win the New Zealand MONOPOLY championship and an expenses paid trip to represent NZ in the world champs in Berlin (where I finished 13th out of 35 countries represented, for whatever that's worth). I talked with Gary Peters, the Florida-based US champ, and initially thought he was conceited (sour grapes?) when he said something like the game was skill whenever he won, and bad luck when he lost. However, in hindsight, I think I better understand what he meant. He was saying that when his opponents naively allowed him to apply his strategy (obtain and develop the orange properties quickly) then his knowledge of this fact gave him a massive edge, but if he encountered opponents who refused to trade with him, or he simply rolled poor dice (elements outside of his control, and therefore "luck"), there was nothing he could do about it. However, this probably doesn't apply to trading, where we can't outmaneuver our "opponents"..... but yes, we want to believe - whether rightly or wrongly - that trading is skill, to a very large degree, because it places conquering the markets within our grasp.
this is very much like poker(which is where i made my money prior to forex). You can outplay your opponents (by the book), preflop /post flop etc. But if they spike a 1/2/3 etc outer on you, You chalk it up to bad luck. Or others just chalk it up to the odds. I don't think either viewpoint matters, as long as you know you made the right decision. You may have been an 80% favorite, but 20% of the time you will lose. The idea is to play those odds and in the long run you will come out positive.

This is how I look at my trading, and your story reminded me of such.

Mike

ps. congrats on your monopoly wins
  • #25
  • Edited Aug 2, 2007 4:50pm Aug 1, 2007 10:24pm | Edited Aug 2, 2007 4:50pm
Hi, there,
I would like to give some comments but it doesn't mean that I'm better than all of you.

Dr. Alexander Elder's books could be a good references when you want to learn about technical trading. This technical trading could be apply in all market you want to trade.

The Books' title are;
1.Trading for Living,
2.Come into my trading room.

They are not talking about technical it self, but also the psychological side of trading.

Well my dearest friends,
open an account in FXCM is not a bad-bad decision.
But please consider of this;
I buy my stuff with $1 and you buy the same stuff for $4.
When I try to sell my stuff for $3, I made a profit of $2 already, meanwhile you can not get out from the market with price of $3 right ??

Well, what I'm trying to say is,
try to find online broker that good enough in service and cheap enough compare to your trading size account and the other online brokers.

Just for the information, you may try to check {link removed, see rule #3}
they offering for only 1 pip in all major currencies traded.
you may ask where they get the profit with only 1 pip spread ??

If you ask me the same question, my answer is, I don't want to sweat my self with this kind of question, as long the trading platform is good, I have some flexibility to change and modify my forex chart, the chance to fill for my stop loss or target profit relatively good, and easy to withdraw, that's enough for me.

Well, happy trading then for all of us.
Tom,
[email protected]


=================================================
I'm a newbie and just got interested in Forex trading the past few months. I opened an account at FXCM with $5,000, hoping to get in when I'm ready. In the meantime, I've been using the demo account to get a feel of what the market is like, etc.

But it looks like I'm never going to be ready because I am intimidated with reading the charts. Is there a way I could do this despite my lack of knowledge of the charts? Maybe some kind soul can recommend me a trading system (s) that make sense and take the guess work out for me. Or even better, a legitimate software program that can give me the buy/sell signals that can save me time and the aggravation?

I may be naive, perhaps there is nothing I can do about it but your feedback will surely put me in perspective of whether I can actually do Forex trading despite my lack of education. Thanks so much.[/quote]
  • #26
  • Aug 2, 2007 10:34am Aug 2, 2007 10:34am
Quoting JoshDance
Dave, great post. I'll have to check out this book you mention.

Great signature by the way, it made me literally LOL. :-)
Hehehe, thanks Josh! My gf doesn't care for it all that much however....
  • #27
  • Aug 2, 2007 11:02am Aug 2, 2007 11:02am
Quoting hanover
In 1992 I had the good luck to win the New Zealand MONOPOLY championship and an expenses paid trip to represent NZ in the world champs in Berlin ... but if he encountered opponents who refused to trade with him, or he simply rolled poor dice (elements outside of his control, and therefore "luck"), there was nothing he could do about it.
That is awesome Dave! I always remember being pretty good at Monopoly, but I haven't played in years. Congrats! Do you still play competatively?

I think that your story is a great illustration of how chance can have such a great effect on outcomes - more than most people give consideration for. If you relate this to trading, you can go back to your earlier quote, "Don't ever confuse brains for a bull market."

Quoting hanover
ask my wife! (BTW, she's wonderful, I'm not ready to sell her just yet )
Well, when you are, just follow steps 2 and 3 and you'll be well on your way to step 4 haha!

Quoting hanover
And, unless I'm missing something, MM is a no-brainer: just risk 1%-2% per trade.... that's the best we can do.
Well, this is so generally accepted as the "thing to do." I guess my mind has come to accept this over time, but I wonder if this is the optimum level of risk? Could it be 4%, or .05%? I know that 10% is (intuitively) way to high, but what about 6%? I never bothered to ask anyone how the 1-2% factor came into play, it is just what everyone says around trading circles. But is it more for psychology - one's own piece-of-mind? I mean, if you're risking high amounts, this brings more emotions into play and makes a trader more apt to make irrational decisions. Or, is 1-2% really the way to go because it is a general requirement when putting money in a market? Hmmmm, I'll have to think about this....

Quoting hanover
My take on applicability of methods to different market climates here:
http://www.forexfactory.com/showthre...77#post1452677
BTW, this whole thread is about the skill versus luck concept. I enjoyed the challenge of defending my position against the "trading is 100% skill: get your exit/MM right, and you're immediately guaranteed a place in the winner's circle" and "the Holy Grail lies with the trader's mind set, not the system" type posts.
Without even going to the thread (yet), I can see you were probably on the defensive for most of the ride.

Quoting hanover

Now, using this positive expectancy method as a starting platform, we add (as you suggest) some of the "things one can do to enhance their chances of success".... here are some of suggestions, off the top of my head:

  1. Trade the pair(s) where the average daily range is greatest, relative to the spread cost.
  2. Trade the pair that pits the strongest currency against the weakest currency, fundamentally and/or technically.
  3. Trade only in the direction of the longer term trends.
  4. Trade only the strongest (long, steep and/or consistent) long term trends.
  5. In a longer term uptrend, enter when the shorter term trend is oversold, and take some profit when it's overbought. Vice versa for a downtrend.
  6. Exploit the trend further by allowing profit on the remainder of the position to ride as long as possible.

Here's my first thought: I am completely on-board with you have here except for one thing, and it is due to my relative lack of being knowledgable about carry trades.

I simply don't know how often in the past such discrepancies have existed between the various currency pairs and their home country interest rates, and how often they are likely to happen in the future. For instance, the yen has been enjoying such a steep decline vs. certain currencies because of the low interest rate in Japan and the dealings of the BoJ to keep the yen's value depressed. And this has been going on for years! Well, intuition tells me that this cannot be the case forever.

I guess what I'm trying to say is that my hang-up on carry trades is that over a large enough sample spanning many decades, won't the short-term effects of interest rate differentials "cancel" out? How frequent do these wide disparities happen and are they always exploitable. If they happen frequently that's terrific, the trade direction is laid out for us and 50% of the trades will automatically be "filtered" (in my experience the less decisions I have to make equate to less things that can go wrong and less mistakes to be dealt with). If carry trades the likes of what we've seen in the recent past (and are still witnessing) are infrequent, that's still not bad since 50% of the trades are still filtered out and, again, less decisions to make the better as far as I'm concerned.

Overall, I really like the layout. The key, from first glance, is not to spread out a strategy over many different pairs no matter what, but to isolate the strongest chance of success (ergo why I like it!). Focusing on the strongest pair with the most rate disparity and buying on the cheap (and selling on the top) seems logical and sound. It could almost be done by a chimp.

Let's keep this going.....I like it already!
  • #28
  • Aug 2, 2007 2:31pm Aug 2, 2007 2:31pm
Quoting mbqb11
You may have been an 80% favorite, but 20% of the time you will lose. The idea is to play those odds and in the long run you will come out positive......This is how I look at my trading, and your story reminded me of such.
Hi Mike

This is how I would very much like to view trading. I'm still working on a system that wins more than 50% of the time (or at least where the combination of win rate and win size gives a long term profit). I may be very close, but it's way too hard to tell...... obviously I need to practise more, fine tune my approach, and fashion a track record that proves that a few wins is more than just beginner's luck. Until then I'm not setting my hopes too high. Perhaps I'm not seeing the wood for the trees, but price movements seem very random to me.

Thanks for your congrats on the MONOPOLY, but I shouldn't take them too seriously I'm afraid, because that's one game where there's definitely lots of luck involved

Just curious, if I may ask, why did you make the switch from Poker to trading?

David
  • #29
  • Aug 2, 2007 2:37pm Aug 2, 2007 2:37pm
Quoting hanover

Just curious, if I may ask, why did you make the switch from Poker to trading?

David
lots of new laws, the hours are more brutal then forex, and you can make a hell of a lot more money in forex. Poker you trade a lot of time for money as opposed to forex market it isn't a matter of how much time you actually spend trading(for a lot of systems at least).

Take care david
  • #30
  • Edited 4:52pm Aug 2, 2007 2:39pm | Edited 4:52pm
Quoting tomfleur
Just for the information, you may try to check {link removed, see rule #3}
they offering for only 1 pip in all major currencies traded.
you may ask where they get the profit with only 1 pip spread ??
I agree that the impact of costs are generally underestimated by (especially intraday) traders, hence a lower spread can ultimately have a significant overall effect.

However, I see your reference to CrownForex, and I suggest that anybody should first perform some research on any broker they are considering to use.

Some links in my post here may help you get started
http://www.forexfactory.com/showpost...70&postcount=2

Good luck
David
  • #31
  • Aug 2, 2007 3:42pm Aug 2, 2007 3:42pm
Hi Dave

Quoting megadave5000
That is awesome Dave! I always remember being pretty good at Monopoly, but I haven't played in years. Congrats! Do you still play competatively?
I just tried to post my MONOPOLY strategy into the Members Lounge, but somehow it finished up on the James16 private forum discussion group. I unsubscribed from the PF back in February, because due to ill-health I didn't have time to read all of the massive amount of info there. Anyway, I will try to post it again later.

Quoting megadave5000
Well, this is so generally accepted as the "thing to do." I guess my mind has come to accept this over time, but I wonder if this is the optimum level of risk?....
Good to see that you're thinking outside the squares! Mathematically, the Kelly formula (see http://www.hquotes.com/kelly.html) apparently gives the optimum bet size for any given prior win/loss criteria. However, it makes no special consideration in terms of avoiding account wipeout, so IMHO lacks the risk management required for trading, and hence tends to oversize positions. (For example, with a 55% win rate, and a 1:1 win size/loss size, it recommends risking 10% of your account per bet). Anyway, given that I'm experimenting, my #1 priority is to preserve my "education capital" as long as possible, so I'm happy to meantime stay with 1%-2%. And of course the smaller one's edge (currently I don't have one!), the greater the need to be conservative.

The blackjack pros (card counters) of the 1980s would vary their bet size not according to prior wins/losses, but according to the ratio of high to low cards remaining in the deck, i.e. probabilities applicable to the upcoming hand. I'm not sure if/how this could be applied to trading, i.e. given the randomness, how could we calculate the probability of success of an upcoming trade?

Quoting megadave5000
Here's my first thought: I am completely on-board with you have here except for one thing, and it is due to my relative lack of being knowledgable about carry trades......
I'm not necessarily advocating long term carry trades, let alone hedging. All I'm saying is that if spread costs mean that we're giving up (say) 5 pips, then a few days worth of positive carry should offset this cost, bringing us to breakeven, in terms of expectancy. For example, if we're long NZDUSD with Alpari, then there's a spread of 5 pips, or $50 per lot. Alpari currently pays swap of $4.70 per day (triple on Wednesdays), i.e. $32.90 per week. So, if we stay in a trade for 2 weeks, the swap more than covers the spread, giving us a positive expectancy trade, just by using random entries and exits. Then we attempt to build on that platform, with an entry/exit method that improves expectancy further. Trading in the direction of the trend would seem a good starting point.....

Having said all this, it might well be possible to overcome "randomness + costs" simply with a decent enough entry/exit method. Anybody who trades profitably intraday must somehow be achieving this. I am continuing to experiment, but unless/until I build up enough of a track record of profit to reach my "aha moment", I will remain conservative in my assumptions, i.e. that the effect of randomness makes profitable trading very difficult.

I find my biggest psychological enemy at the moment is that after 3-4 winning trades, I start to think "hey, I might finally be onto something", and then when the next 3-4 trades are losers "ah well, maybe not". So I'm very much keeping my expectations neutral. At least it's a fun exercise

David
  • #32
  • Aug 2, 2007 8:13pm Aug 2, 2007 8:13pm
Quoting hanover
I just tried to post my MONOPOLY strategy into the Members Lounge, but somehow it finished up on the James16 private forum discussion group. I unsubscribed from the PF back in February, because due to ill-health I didn't have time to read all of the massive amount of info there. Anyway, I will try to post it again later.
My strategy is to buy as much stuff as I can and then mortgage what I have to buy more properties. Always buy utils and railroads and start developing properties right away if possible.

Quoting hanover
The blackjack pros (card counters) of the 1980s would vary their bet size not according to prior wins/losses, but according to the ratio of high to low cards remaining in the deck, i.e. probabilities applicable to the upcoming hand. I'm not sure if/how this could be applied to trading, i.e. given the randomness, how could we calculate the probability of success of an upcoming trade?
Yea, I've thought much about this as well. I am captivated by games like blackjack, poker, and roulette. I think they're all fun. But, blackjack is the only game that has a "memory" if you will. The cards that have been played are out of the shoe and can't come back in until the shoe is shuffled. Unless you're playing with a continuous shoe, you can effectively keep a tally of the high/low card ratio and increase/decrease your bets as the shoe get out of balance. I don't see how this can relate to trading since price doesn't have a memory in this same way. BTW, I have heard from a friend that some casinos are moving to a continuously shuffled shoe which will eliminate the card counter's edge completely.

Quoting hanover
I'm not necessarily advocating long term carry trades ... Then we attempt to build on that platform, with an entry/exit method that improves expectancy further. Trading in the direction of the trend would seem a good starting point.....
I see. Well, do you agree that only taking trades in the "long-term" trend direction eliminates a lot of decision making? To me, this is what is very attractive about trend following. Establish the trend and only trade in that direction - don't try and paddle upstream. Less decisions to be made = less that can go wrong.

Quoting hanover
Having said all this, it might well be possible to overcome "randomness + costs" simply with a decent enough entry/exit method. Anybody who trades profitably intraday must somehow be achieving this.
Well, I don't make it a point to be an intra-day trader but sometimes things work out that way. Lately I've been in-and-out in the same 24-hr period. I'm not trying to be a day-trader but that's how the wheel of fortune has been spinning. I've won and lost no matter what timeframe I'm using however.

Quoting hanover
I find my biggest psychological enemy at the moment is that after 3-4 winning trades, I start to think "hey, I might finally be onto something", and then when the next 3-4 trades are losers "ah well, maybe not". So I'm very much keeping my expectations neutral. At least it's a fun exercise
Yep, same here. I hit a couple biggies in a row and I think that finally I've got this game licked. A week later and I'm scratching my head again. Woe is me!
  • #33
  • Aug 3, 2007 7:17am Aug 3, 2007 7:17am
Quoting megadave5000
My strategy is to buy as much stuff as I can and then mortgage what I have to buy more properties. Always buy utils and railroads and start developing properties right away if possible.
I posted some of my MONOPOLY strats here: http://www.forexfactory.com/showpost...86&postcount=4

Quoting megadave5000
I don't see how this can relate to trading since price doesn't have a memory in this same way. BTW, I have heard from a friend that some casinos are moving to a continuously shuffled shoe which will eliminate the card counter's edge completely.
Agreed, the analogy between casino games and trading would seem to break down primarily because probabilities can be calculated accurately for the former, and in advance of any given play. Almost impossible to win by counting cards these days: multiple decks, auto shuffling, shuffling well before the end of the shoe, eye-in-the-sky tech to detect counting, etc. Get caught counting and they'll break your fingers and then finish you off with a baseball bat (or so the 1995 Scorcese movie would have us believe ). In the 1980s it was single deck, and the only technique used to detect you (as a counter) was if you increased your bet size too much when there were only a few cards left to be dealt.

Quoting megadave5000
I see. Well, do you agree that only taking trades in the "long-term" trend direction eliminates a lot of decision making? To me, this is what is very attractive about trend following. Establish the trend and only trade in that direction - don't try and paddle upstream. Less decisions to be made = less that can go wrong.
My experiments testing equity/CFD systems taught me that the "impulse" moves (with the trend) were generally longer than the "retracement" moves (against the trend), thereby improving the chances of catching (a decent chunk of) a longer move. If I may generalize, Forex seems to revert to the mean more often, especially in the shorter term, which may negate this somewhat. However, I note that some of the (apparently) successful traders here - won't get myself into trouble by mentioning whom I think they might be! - regard trading only with the trend as an important part of their method.

Cheers
David
  • #34
  • Aug 4, 2007 12:43am Aug 4, 2007 12:43am
The reply is just too amazing i guess..... but hey, here's some simplified guide :
1. Reasoning
ask anything (Why, Who/Whom, Where, When, What ,& How) to everything
2. Controlling
information is boundless, you can have endless reason without any result
3. Actuating
Act..... now....(waiting is acting too)
4. Don't give up, negotiate
5.......100 ..... the list may be endless,

Mind trapbut somehow important)
1. the "if" world........ it is endless
2. the "why" & "because"....... it is endless too,
3. trying to remember...... if it is important, you will remember, if you forget it, it proves that it is not that important to you ( not a 100% true statement, but teach me what important is all about).
4. trying to forget..... you can forget only when you stop trying it.
5......100 ...... all may have it's own circumstances ......
  • #35
  • Aug 14, 2007 8:16pm Aug 14, 2007 8:16pm
Quoting hanover
Fatdragon88,
Quoting hanover

In addition to the James16 material, here's another thread that might be worth a read:
http://www.forexfactory.com/showthread.php?t=27286
Jacko generously describes his method in the first few posts of this thread. It sounds like he's a very successful trader.

Also, regarding exits, IMHO there are some good posts in this thread:
http://www.forexfactory.com/showthread.php?p=184302
especially #2 by Dopey.

Good luck
David
David,
Thank you so much for the link to Jacko's thread. And also to everyone who has contributed their ideas and insights on this thread. I've learned so much from the forums and remain hopeful that one day, I'll be able to do live trade. The learning curve has been steep but I'm having fun learning. Perhaps some of you can share some trading strategies that has been profitable to you.

Sincerely,
fatdragon88
  • #36
  • Aug 15, 2007 3:10am Aug 15, 2007 3:10am
Quoting fatdragon88

David,
Thank you so much for the link to Jacko's thread. And also to everyone who has contributed their ideas and insights on this thread. I've learned so much from the forums and remain hopeful that one day, I'll be able to do live trade. The learning curve has been steep but I'm having fun learning. Perhaps some of you can share some trading strategies that has been profitable to you.

Sincerely,
fatdragon88

Dude, go here

http://www.forexfactory.com/showpost...8&postcount=21

I was a newbietrader and it wasthe best training ever.
  • #37
  • Aug 15, 2007 10:10pm Aug 15, 2007 10:10pm
Quoting newbietrader101
Dude, go here

http://www.forexfactory.com/showpost...8&postcount=21

I was a newbietrader and it wasthe best training ever.
hi newbietrader101,
yes, i have seen jacko's thread and i totally agree that there were a lot of insightful tips and advise. how are you doing with your trades so far? do you follow it by the letter or do you adjust the system to suit your trading style? i may have questions for you. can i pm you?

thank you.

fatdragon88
  • #38
  • Aug 15, 2007 10:23pm Aug 15, 2007 10:23pm
Quoting fatdragon88
hi newbietrader101,
yes, i have seen jacko's thread and i totally agree that there were a lot of insightful tips and advise. how are you doing with your trades so far? do you follow it by the letter or do you adjust the system to suit your trading style? i may have questions for you. can i pm you?

thank you.

fatdragon88
Dude, i am going flash. have made much more than i expected but wish i had more money to play with, bought a car with some of my profits and now hate that car cos i cant trade as much as i want to now. i trade the same as jacko now, i traded a short on euro which jacko said not to and made a little money but missed out on a big long. but i am learning not to be a speculator and not try to be in every up or down movement. yeah, pm me.
Jacko said to me yesterday that he would rather be OUT of a market than be in the WRONG way. starting to see that more now but then i still get itchy to sell this euro atm
  • #39
  • Last Post: Aug 15, 2007 10:33pm Aug 15, 2007 10:33pm
Quoting newbietrader101
...he would rather be OUT of a market than be in the WRONG way. starting to see that more now but then i still get itchy to sell this euro atm
As you progress in your trading, you'll come to live by that statement. Trust me.
Mr. Trend
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