Soultrader's Clinic :)

must be me, i just can't see where that was disrespectful on my end??

whatever.

[quote=ItalianSharp;1684232]You are a funny character indeed. You talk like the master of trading and have no humility whatsoever.

You are a big bla bla bla with a big ego and by your posts I seriously can't see you are a vet trader. You sound more like a wanna-be veteran than a real veteran.
quote]

When one point a finger, there are 4 pointing back. If one sees a lack of humility, ego etc in others, it is just the mirror of what is inside onself. One speaks out when it's heart is too full inside.

CHFJunkie
Member
Member Since Oct 2007
Posts: 10


http://www.forexfactory.com/images/icons/icon1.gif Tech. Indicators
Hi soul,
Regarding technical indicators, I have gone through lot of books and articles on technical indicators and their usage.

but so far, All results were disappointing as tech. indicators lag price, they follow it so it's better to follow price itself.

all that was till I read an articles by Joe DiNapoli, it was about how to mix leading and lagging indicators.

and from his teachings, The best use of tech. indicators is to use them on a larger TF then drop down ur TF and use Fibs or S/R levels to place urself safely into the trend defined on larger TFs using tech. indicators.

I hope I'm right with my point of view.

Regards


Hi matey, thanks for the PM.

here's a thought for you - what you describe is exectly what I do - apart from the fact I don't use the indicators - think about that for a mo.

The way I trade is by identifying the longer term trend bias using the daily / weekly charts - I do this by looking at price and it's direction - you describe it by looking at indicators and their direction which are based on price and it's direction.

so by using indicators to determine the trend direction you are using a middleman.

It's a bit like going to the supermarket to buy your food when you could go to the cash and carry or warehouse to get it direct. - same food.

Thing is that the supermarket has to be paid for, as does your indicator - the supermarket markup on the food is what you pay to be able to buy in singles instead of by the boxfull. In chart language the technical indicators markup is called 'Lag' - that's the price you pay.

Now there is nothing wrong in using a supermarket as most people cannot buy everything in bulk because of storage and cost reasons - however there is no cost on the chart of using price directly - just takes a bit of learning is all - that cost isnt space, it's time.

so you determine the trend using either price or indicators or even both - then you go down the lower timeframes to time a pullback. - for this you may be using another indicator, maybe an oscillator or an average or combination.

The price trader uses support and resistance - again bypassing the indicator and going direct to the source. again leaving lag behind.

so in answer to your question you are indeed right - higher tf trend and lower tf to get in - the choice as to wether you pay for the indicator in lag or just use price is down to you and what you are comfortable with.

Hope this helps

Hi Soultrader,

You have shown us one way of looking for resistance and support in a previous post. Thanks. Could you show us others ways?
The price trader - Can you tell /show us,with examples, how the price trader appliy or use "price " to make decisions ?

Thanks Soultrader for your contribution.

Hi Highway.

The main thrust of this thread is not really to give trade examples but to give a different insight and paradigm shift to those who are struggling to get past a block.

why those who are clearly the best traders on the planet and need no help want to argue with me i'll never know

as an example though and to prove a point, see this.

Soultrender, very well defined..

most just looking for "THE SECRET", yep talk indicators and entry and you'll have 5,967 people follow you.. funny thing this is..lol

deleted, moved to its own thread

OK, I vouch for you. I do remember you talking about trading off the 1 min on your old site. But that's what confuses me, you did it for 2.5 years successfully but you recently asked if anyone knew of a successful 5min trader?

I personally don't trade off the smaller timeframes but you are slightly inconsistent with your point.

I for one would like to see what are some good trading practices (from your point of view - rather than pointing out the bad ones).

Pip

I said that I traded the lower timeframes for 2 1/2 years and that I had 100 pip trades regularly - I did. But i also has lots of losses, many frustrated weeks and suffered from burnout. I made money on a 5 min chart sure, but not with any consistency - i would have wild months and then wild losses - that is not what i class as consistent and certainly not where anyone really wants to be. it might be fun in your first few years in the game to run the gauntlet and burn away, but for consistent profits it's very rare to find someone who can keep it up month after month and year after year on low timeframe charts.

I'm not saying it's impossible, it isnt - but my experience is that you will hardly find anyone who trades a 5 min chart after say 4 years in the game.

if you worked in a supermarket stacking shelves you might spend the first few months going back and forth to the warehouse several times an hour - when you've been there a while i would think you learn to drive the forklift and bring out a palette

what i asked for was someone who is consistently profitable - im talking someone who has made money for say 2 years, month in month out without changing to a longer timeframe - daytrading every day, closing every night. anyone?

ps, are you the same pipmaster i banned on moneytec for spamming?

I sure hope not. I vouched so he could speak here, sounded experienced to me. But I hate spam with a passion and would sure like to know the answer to that one.

dunno, even if it is everyone deserves a second chance - god knows i've had my share of them!

Seriously, I don't hold grudges for that long and you do deserve another chance so I am forgiving. Initially when you started this thread I thought you hadn't changed by some of the comments you made but after discovering that your medication was not right and now you say it is corrected, I think we can all move along and get on with what we know best.

As far as I'm aware, you didn't ban me for spamming but you accused me of being someone else and someone who never posted from the UK. Well, I can assure you that I'm not fxsurfer and that I most definitely live in the UK. Next time you are in Herts or London, let me know and we can catch up for a pint or two at the local.

Take care and I look forward to some positive contribution.

Rest assured that I am in the same boat as you when it comes to spammers. Not only that but I have taken it upon myself to challenge those who claim something that just doesn't ring true.

It is my intention to contribute to this forum positively.

Sounds great. Thanks for your answer.

generalz
Member
Member Since Oct 2006
Posts: 52


http://www.forexfactory.com/images/icons/icon1.gif thanks from generalz
SoulTrader,

Hope your health is good..thanks for your response to my question. I have alot of work to do..

How about a lesson on how to backtest a system. Use software, is manually a waste of time or not??, Do's and don'ts. You have already given us some info previously. Sounds like you might know testing systems as well as anyone.
There is not much good info on this. I suspect that testing a system is a rare occurance for most..

Noticed that you changed the bottom of your posts..
"Buy tops and sell bottoms" interesting...

thanks

generalz




Hiya matey, i have rather an unconventional view on backtesting in that i think it's a complete and utter waste of time and energy.

I'm sure this will raise some peoples backs but i really do think it's time wasted. real time testing (ie trading) is the only way to move forward.

wether you use software designed to backtest or you do it by hand the basic building blocks are the same. You need good data and you don't have it.

If you are using a broker or a bank or an ecn then you have indicative data - what this means is that the data they show you are what you 'should' have been able to buy or sell at - it does not mean that this is what you would have got for sure had you clicked the button at that exact second. what's more it's not even the market's data, but data that your broker thinks is near enough market data.

Even if you have access to a bank's price feed then you only have their indicative data too, ie the price that they were willing to buy or sell at at a given time - often there can be large differences between brokers and between different banks. what most traders do not realise is that banks keep a book too of net in and net out before even they look at the interbank market.

so what you are testing on is in fact fabled prices that may never have actually existed. so that's point one, the data.

Secondly is data - yep again.

if you have indicators in your method that you want to backtest then those indicators are made from the data - the same data mentioned above. so the indicator you see is also a potential fable. - that's why backtests on one broker will often be very different from backtests ran on a different broker - because their data is different for each others. Only if you had real 100% reliable data would backtesting be any use to you.

As forex has no central exchange there is no 100% reliable data - i see EA programmers using data from alpari - but that's alpari data - are you going to trade with alpari forever? chances are not so what's the point?

Now what you are going to say is 'well what the hell do we do then' - well you learn to trade hypotheses is what you do and prove them right or wrong by trading for real on real money in real time.

Add to all this the fact that software can optimise your indicator settings, timeframes, take profits, stops, entries and exits and suckers always choose the optimise button when it don't look that good! - all you do then is optimise shit indicators on shit indicative price quotes that may never have existed and make em fit what happened in this fictional world.

someone will come back saying that if you backtest properley with control periods and safeguards that it's worth doing - well maybe it is if you have nothing to do for a year - but I would advise differently.

My advice would be to learn to trade - there are only two ways to do it. you either look to range trade or trend trade in my opinion (for what it's worth) everything else is just fluff bluff and bluster.

forget testing this and that - this forum and many other forums are knee deep in systems that are optimised to the hilt - you could spend five years just testing what's already out there. I've looked at thousands of systems and can tell you that a 100% mechanical system can make money - I have lots of them, but they have large drawdowns and need large banks to trade them because of the low leverage needed. If someone reading this thinks they have one that doesnt do this then I can get you more money to trade on that system than you ever imagined.

The quest for the holy grail continues on here and countless forums daily - none of them test back far enough (10 years is recommended) and they always come back with the same mantra "the market is different now than it was 10 years ago" - utter balderdash i'm afraid - the market is still just a bunch of people trying to screw the next guy and always has been.


One thing to remember is that there is noting you could come up with as a straight trading method that has not been done before or worked on before. Hedge funds have to think up more and more exotic ways of making money from arbitrage and growth - believe me these funds have thrown more money, man hours and intellectuals at the market that you and I could ever manage to muster - and they do 40% a year at best.

Forget backtesting - forget re-inventing the wheel - just follow the price and you won't go far wrong.

let the stoning commence

generalz
Member
Member Since Oct 2006
Posts: 52


http://www.forexfactory.com/images/icons/icon1.gif thank you for the response
Soultrader..

You have responded to two of my questions on FF and you have been very helpful..

I am not 1kt so I have to message you rather than post.

How I understand developing a system:
There are systems out there that will work. To learn if they will work for me. Live test(real money) a system, keep records, set/follow rules, make adjustments, repeat? Long term results are the key.

I am beginning to sound stupid to myself. This is common sense.

Would it make sense to consider the expense of live testing a system, say 400 times, an investment in the business? If it works you are good to go, if not you must reinvest??

thansk for aal your help

john
generalz


common sense is what it is John.

Maybe i've been a bit too simplistic - of course you need to do 'some' testing to make sure you have a positive expectation that your method at least stands a chance, but so many rely on backtesting to say 'my system works' when in reality it does not. backtesting is merely a yardstick and not a science. Forex is littered with 'shoulda woulda coulda' and backtesting merely turns that feeling into figures.

chaos theory also suggests that your mere participation will make a difference - you weren't trading in the test period so there is one variable that hasnt been taken into account - but then i guess we might be getting silly (or are we?).

What i'm trying to get across to you John is this - you talk of systems and i talk underlying method - there is a difference. if you decide to be a trend trader then there is only one indicator you need, that being support and resistance. if you decide to range trade there is only one indicator you need - support and resistance - it is the one underlying thing in the market that works - it tells you where fair value is, it tells you where people are not willing to go further than and where the bottlenecks are. and it tells you so much more.

test that if you like.

ps, your losses are a business expense yes.

pps, it need not cost you anything to forward test - use a demo. although a demo feed is about as accurate as the data mentioned earlier it will give you a good idea as to wether your method stands a chance.

A demo however is not the place to learn to trade, just a place to play with strategies and methods. you will never learn to trade until you have real money on the line. get onto a real account as soon as you can - even if it's on that bucket shop oanda so you can do 1c a pip.

Hope this helps

It is worthwhile to mention that one should never take demo execution to be identical as live money execution. Demo accounts almost always execute the price you want...so if your method relies on trading fast moving markets then you should be wary of this fact.

too right - that's what i meant by "although a demo feed is about as accurate as the data mentioned earlier" - maybe i should have elucidated

Mind you, there are some brokers who requote on demo like they do on real accounts - MIG being one of them.

Demo's are still not the same though.

triphop
Member
Member Since Oct 2007
Posts: 5


http://www.forexfactory.com/images/icons/icon1.gif Rules vs instinct


Now to the stops! Setting stops based on S&R rather than blind faith seems sensible. But I'm interested that you don't put stops at these levels though at the start of your trade and so close manually instead.

That suggests you change your mind about S&R levels throughout the duration of your trade - is that the case?

If you do, what makes you change your mind?

If not, why not use your stop to be the S or R level?

Which relates to an old dilemma of mine. Do you reckon the best strategies are completely programmable (that includes those strategies manually traded with a set of cast-iron rules) or whether it's better to be more fluid? I suspect even those traders who would describe themselves as completely discretionary have a lot of rules, even if subconciously.

That's 2 questions really, so I'll stop rambling. Hope you're feeling better, and obviously thanks for all this - sure loads of people finding it useful. You'll be horrified to know I've got plenty more questions too in case you run out of PMs


Hi matey, thanks for the Q

I close trades manually because of spikes. at any time a piece of news can cause a spike by silly traders who buy and sell on impulse. as I only trade with the trend then any spike that took out a stop would be anti trend move - these are buying opportunities when i'm around and are certainly no reason for closing the trade even though they may breach support / resistance for a short time - they always come back to trend as trends dont turn on a sixpence.

I also tend to close trades on the close of a bar - this forces me to wait for the market to settle.

So I don't change my mind on where S/R is but you have to remember that S/R is not down to the pip - my S/R levels are generally about 100 pips deep which is usually followed by another S/R level 100 pips deep lol.

I often hang onto trades because the prevailing trend is still there - why not if it's going to come back to trend? ok, sometimes they dont but more often than not they do - and i use low leverage of 1:1 so i don't sweat them.

anyway, digressing now.

The best strategies are NOT completely programmable. In my opinion there is no such thing as a strategy that has no discretion. even if you are using an EA you still exercise discretion on which pairs to trade, which timeframe to use etc and when you made the EA you exercised discretion in the choosing of parameters.

if you ever find a way of getting an EA to decide which is the best pair to trade, when not to trade because fukui is about to speak and shock the world and knows not to go long at 3 mins to close on xmas eve then you might have a truly discretionless system - but then the EA would be using discretion also

EA's are great for giving alerts to a trade opportunity. they can tell you when your setups appear or you can decide to put them on for an opportunity youve seen just so they execute the buys and sells etc.

My fear is that most wannabe traders use EA's to avoid making a decision about a trade. Theuy avoid the decision for entries, for stops and for exits.

I've used EA's in the past - in fact my main system in 2006 was EA lead and it made me a lot of money, however what it did to me psychologically was make me very lazy and when my method got to failure point I had to learn how to trade all over again (allbeit faster than a newbie).

so my answer is, even if you have what you think is completely mechanical you should still take the trades yourself manually - this gives you a connection with the trade and a responsibility for it.

IMO this is the most important part of being a trader - others cite discipline and patience but for me trade responsibility is number one and probarbly the hardest to master. No Stops (other then emergency), No EA's just manual trading.

Hope this helps.