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At the end it all comes down to the same thing 43 replies

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We're all saying the same thing

  • #61
  • Nov 7, 2008 8:09pm Nov 7, 2008 8:09pm
Can purely mechanical MA cross-over systems last? No way. They will all fail at one point. Even the super brains over at LTCM couldn't keep the show on the road indefinately. Even equity value investors have lost their edge over the past decade.

The answer to fx trend following is: Flow analysis. It's boring, it's dry, it's academic, but it works.
  • #62
  • Nov 7, 2008 8:14pm Nov 7, 2008 8:14pm
Quoting fxterrapin
Can purely mechanical MA cross-over systems last? No way. They will all fail at one point. Even the super brains over at LTCM couldn't keep the show on the road indefinately. Even equity value investors have lost their edge over the past decade.

The answer to fx trend following is: Flow analysis. It's boring, it's dry, it's academic, but it works.


Interesting, but what is your definition of Flow Analyis? sounds like you MAY be on the right track but let me know
  • #63
  • Nov 7, 2008 9:03pm Nov 7, 2008 9:03pm
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Can purely mechanical MA cross-over systems last? No way. They will all fail at one point. Even the super brains over at LTCM couldn't keep the show on the road indefinately. Even equity value investors have lost their edge over the past decade.

I have a purely mechanical MA cross-over method that has backtested successfully for a 50 year time span, and forward tested perfectly since I started using it.

Paradoxically it's not a "super brain" that makes it work, but that it's insanely simple and non-assuming.
  • #64
  • Nov 7, 2008 9:12pm Nov 7, 2008 9:12pm
Quoting Rabid
I have a purely mechanical MA cross-over method that has backtested successfully for a 50 year time span, and forward tested perfectly since I started using it.
Seeing is believing.

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Paradoxically it's not a "super brain" that makes it work, but that it's insanely simple and non-assuming.

That's why LTCM failed (of course).
  • #65
  • Nov 8, 2008 3:52am Nov 8, 2008 3:52am
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You cannot "google" a list of laws of the market.

LOL.Gaston,this was a poor attempt on my behalf at a google joke.My bad.

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then you are limiting yourself to countless other ways to succeed.
If i am successful,why would i need countless other ways?
If it ain't broke then don't fix it.If/When things change,then i will adapt to this change.

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There are tons of other edges out there, many much more efficient than "trends exist".
According to tdion there must not be too many because apparently we're going around in circles here at FF.LOL.Honestly though,i tend to agree with the 'wander the same circles' statement he makes.I think the reason though is due to the growing fx community.

Regarding efficiency....
Definition of 'efficient' taken from Merriam-Webster + Dictionary.comBoy you guys are really going to hate me soon)

1.Performing or functioning in the best possible manner with the least waste of time and effort.
2.Acting or producing effectively with a minimum of waste, expense, or unnecessary effort.
3.Exhibiting a high ratio of output to input.

Based off the above definition,if i trade trends and i waste very little time(1hr/week) and energy(2 weetbix and a glass of juice) and have minimal expenses(fees) to produce a solid output(ROI),then don't i have an efficient edge?
The question is:How efficient can an edge get?Better still,does it really matter?
Now,Now Gaston,we don't want to be chasing the holy grail now do we.


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But you need to believe that others (non-trend traders) can very effectively profit from you, and you need to understsand why.
If i didn't understand this i wouldn't have a very reliable edge would i.

Take care
  • #66
  • Nov 8, 2008 4:23am Nov 8, 2008 4:23am
So dt,if i have understood you correctly law=occurrences.
Thanks for clearing that up.

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hence a law can be assumed on the amount of times the sun has come up in the past without faliure.
Law on assumptions?Not too sure about that.


Interesting though,if the sun came up yesterday,the day before,and the previous millions of years before that.Given that the sun is trending,we can go long the sun,and mow the lawn tomorrow.
Actually,my bad,i'll get the misses to do it.
Thanks for your response to my post.
Take it easy dt.
  • #67
  • Nov 8, 2008 4:28am Nov 8, 2008 4:28am
It is your ability to react (At the right time) to market events (Not necessarily news) and take measures leading to profit.

Easier said than done, I know Perhaps this is an innate ability.
  • #68
  • Nov 8, 2008 4:36am Nov 8, 2008 4:36am
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Interesting though,if the sun came up yesterday,the day before,and the previous millions of years before that.Given that the sun is trending, we can go long the sun, and mow the lawn tomorrow.

Just make sure you have good lawn management, in case it doesn't rise... you wouldn't want to blow your entire tank of gasoline on a single bad trade.
  • #69
  • Nov 8, 2008 7:26am Nov 8, 2008 7:26am
Quoting mattc941
Interesting, but what is your definition of Flow Analyis? sounds like you MAY be on the right track but let me know
There is only one definition of flow analysis. The point is you have to delve into deeper watters than just TA.
  • #70
  • Nov 8, 2008 10:20am Nov 8, 2008 10:20am
Quoting skfx
LOL.Gaston,this was a poor attempt on my behalf at a google joke.My bad.



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If i am successful,why would i need countless other ways?
If it ain't broke then don't fix it.If/When things change,then i will adapt to this change.
I agree with this, but I was not implying you change anything. I am simply saying that there are other ways to profit from the market outside of trend trading. Maybe I misunderstood you, but someone who says "My way is the ONLY profitable way" has a very limiting mindset. This is true in many other aspects of life as well. This was really my main point in my earlier post. I am glad you have found success, but to think anything else is rubbish in a bit naive.

That is why I thought you should use the word "Comfort". This would allow you to submit that others do trade successfully while not trend trading, but that you have found trends to fit your personality. But whatever, just a thought.

Again, my main point was made, and you can do what you want with it. Ill reply to the rest of your post but a lot of it is simply preference. Keep that in mind.

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According to tdion there must not be too many because apparently we're going around in circles here at FF.LOL.Honestly though,i tend to agree with the 'wander the same circles' statement he makes.I think the reason though is due to the growing fx community.
Yes we do go in circles. Realizing this is a big step in a beginners trading career as they usually realize at this point that trading is harder than they thought when they got into this crazy game. But does that mean that there cant possibly be many other successful trading strategies out there? I would think not. All you need to do is think! There are sooo many corners of the market that can give you an edge. Just be bold enough to look for them. Look outside of indicators, outside of time frames, and -dare i say it- outside of charts... If a forum whose population consist largely of the 95% unsuccessful out there, no wonder they travel in circles so much.

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Regarding efficiency....
Definition of 'efficient' taken from Merriam-Webster + Dictionary.comBoy you guys are really going to hate me soon)

1.Performing or functioning in the best possible manner with the least waste of time and effort.
2.Acting or producing effectively with a minimum of waste, expense, or unnecessary effort.
3.Exhibiting a high ratio of output to input.

Based off the above definition,if i trade trends and i waste very little time(1hr/week) and energy(2 weetbix and a glass of juice) and have minimal expenses(fees) to produce a solid output(ROI),then don't i have an efficient edge?
Good point. And generally this is where most successful traders end up. After they have accumulated their wealth they tend to trade less and make more. This could be considered efficiency.

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The question is:How efficient can an edge get?Better still,does it really matter?
The claim of this thread was that "we are going in circles." Look around at what information is being thrown around in circles. It is all the same concepts and ideas back and forth. One day of browsing the systems section will expose you on scalping methods, trend methods, countertrend methods, indicator based methods, etc. How hard was it to find that information? Not that hard. Therefore these concepts are highly exposed. Markets are full of traps, and the more exposed your method of trading is the more likely you fall into a trap (usually ). To get out of these traps, a trader will take the exposed info found on this site and play with it, tweak it, adjust it, spends vast amounts of time just to get it to break even or a little better. Is this wrong? No, and it can be successful.

But why not think outside of the box? Should you chose to study the market outside of "traditional" concepts?

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does it really matter?
Thats your call.



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Now,Now Gaston,we don't want to be chasing the holy grail now do we.
Now why would I want to do that?

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If i didn't understand this i wouldn't have a very reliable edge would i.

Take care
Only you know.

Thanks for the discussion. Good luck.
Headline: USD drops due to news of USD dropping!
  • #71
  • Nov 8, 2008 3:45pm Nov 8, 2008 3:45pm
Quoting fxterrapin
Can purely mechanical MA cross-over systems last? No way. They will all fail at one point. Even the super brains over at LTCM couldn't keep the show on the road indefinately. Even equity value investors have lost their edge over the past decade.

The answer to fx trend following is: Flow analysis. It's boring, it's dry, it's academic, but it works.

If you get a chance to visit here and comment that would be great!
http://www.forexfactory.com/showthread.php?t=47648
  • #72
  • Nov 8, 2008 7:07pm Nov 8, 2008 7:07pm
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I am simply saying that there are other ways to profit from the market outside of trend trading. Maybe I misunderstood you, but someone who says "My way is the ONLY profitable way" has a very limiting mindset.

Agreed.
Instead of saying:"I believe in trading trends and its the ONLY way to make money",i should have said:"I believe in trading trends and through experience its the only way i have found to make money thats practical for me".
My bad.I should have explained myself better.

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That is why I thought you should use the word "Comfort".
I don't trade trends because it gives me comfort,i trade trends because its the most efficient way i have found through experience to make money and its the most practical way for me.
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But whatever, just a thought
No worries,i appreciate your input.

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There are sooo many corners of the market that can give you an edge
Quote
But why not think outside of the box?
100% Agreed.Its a healthy thing pushing the envelope.
I have used this rule to trade trends the non-traditional way.But thats for me to know and others to find out.

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Thanks for the discussion.
It was a blast.
Have a great weekend.
  • #73
  • Nov 8, 2008 7:11pm Nov 8, 2008 7:11pm
LOL,good one Rabid.
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Just make sure you have good lawn management, in case it doesn't rise... you wouldn't want to blow your entire tank of gasoline on a single bad trade.

Thats the thing Rabid,i have managed my risk well(almost mitigated it completely) by running the lawn mower on solar energy.
  • #74
  • Nov 9, 2008 1:27am Nov 9, 2008 1:27am
Signing up.

L.
  • #75
  • Nov 10, 2008 1:22am Nov 10, 2008 1:22am
Quoting mattc941
Hi, 1st, if you don't know if you have an edge, then you don't have it. IF these systems posted seem to keep falling into the same loop of success for a little while backtesting, then maybe some success with real time trading then ultimately failing spectacularly then you understand that they will never work because the market behavior changes constantly! There are trending systems that fail in countertrend markets and vice versa. Their trading lives are short lived, to say the least.

Also, money management THEN trade management is the most important of any system and I promise there are no professional 'scalpers' trading for banks or hedge funds.

Anyways, I hope I didn't ruffle anyones feathers...
Hi,

Nice post - although I urge you to revise your "knowledge" or "opinion" about the promise you made regarding scalpers.

I myself - being only a small fish - trade for a proprietary firm and the main strategy is scalping with individuals having trade limits of up to $5000/tick. With the MD-Trader platform from TT, they execute for 1 to 2 ticks profit hundreds of times throughout every session. Should you think that is small fry, then please google "Paul Rotter" aka "the Flipper" who executes unbelievably large amounts of scalp trades through his hedge fund "rotterinvest" every single day.

And yes, you can find these "scalpers" mainly in banks, hedge funds and prop-firms.....since they are the institutions that are sufficiently capitalized to enable this type of strategy in the first place. Hardly any retail trader can afford the cost involved in the technology for once, and secondly, the bigger the fund, bank or firm, the more access to the flows/liquidity a scalper needs to get his fills guaranteed for decent amounts. No retail platform allows you to pre-program an order that takes 1 pip profit - but there are execution platforms used by the elusive scalpers that enable the trader to send orders into the maket with one click to be in and out of the market for even less than that.

regards
daytrading
Enter Signature
  • #76
  • Nov 10, 2008 1:32am Nov 10, 2008 1:32am
Quoting skfx
So dt,if i have understood you correctly law=occurrences.
Thanks for clearing that up.


Law on assumptions?Not too sure about that.


Interesting though,if the sun came up yesterday,the day before,and the previous millions of years before that.Given that the sun is trending,we can go long the sun,and mow the lawn tomorrow.
Actually,my bad,i'll get the misses to do it.
Thanks for your response to my post.
Take it easy dt.
Hi,

How do you think "laws" in science start off? They are nothing more than assumptions in the beginning - until proven or dismissed.

One textbook sentence in science begins with the phrase: "we can safely assume.....blablabla." That is based on the fact that there might not be 100% proof or certainty available, but [as stated earlier] an occurrence has happened enough times without fail, that an assumption in the case is sufficient to define a law.

regards
daytrading
Enter Signature
  • #77
  • Edited 7:13am Nov 10, 2008 7:05am | Edited 7:13am
Quoting fxterrapin
Can purely mechanical MA cross-over systems last? No way. They will all fail at one point. Even the super brains over at LTCM couldn't keep the show on the road indefinately. Even equity value investors have lost their edge over the past decade.

The answer to fx trend following is: Flow analysis. It's boring, it's dry, it's academic, but it works.
I wish people would read up a little more on the background when making statements like the above.

The reason for LTCM's demise was certainly not the failure of a "mechanical MA cross-over system" or anything remotely similar. The fund collapsed after over leveraging derivative positions (mainly IR-swaps).

The firms main strategies were fixed income arbitrage, merger arbitrage and equity options based on the Black & Scholes model. [Myron Scholes worked for LTCM at the time]

Specifically the leverage on the derivative positions broke their neck: with equity in the company of about $5bln and assets of approx. $130bln they had off-balance sheet positions of $1.25trln - a Nick leeson scenario, only much bigger.

The fixed income arbitrage like buying "off-the-run" bonds and selling the higher priced "on-the-run" bonds which had made LTCM their initial profits after the inception of the fund, had become only a slow earner because every strategy has an "optimum" size and LTCM outgrew that market.

because of the need to find something else that would accomodate the huge size the fund had to work with, derivatives were the only "option" [ironically]

None of the employed strategies failed in terms of workability - they still work now, where the inefficiencies exist. If you put on a trade with too much leverage, and you can't afford to go the stop-distance before possible profits materialize, it's not a "system failure" as such.

regards
daytrading
Enter Signature
  • #78
  • Nov 10, 2008 7:39am Nov 10, 2008 7:39am
Quoting daytrading
I wish people would read up a little more on the background when making statements like the above.

The reason for LTCM's demise was certainly not the failure of a "mechanical MA cross-over system" or anything remotely similar. The fund collapsed after over leveraging derivative positions (mainly IR-swaps).

The firms main strategies were fixed income arbitrage, merger arbitrage and equity options based on the Black & Scholes model. [Myron Scholes worked for LTCM at the time]

Specifically the leverage on the derivative positions broke their neck: with equity in the company of about $5bln and assets of approx. $130bln they had off-balance sheet positions of $1.25trln - a Nick leeson scenario,...
I didn't state that they used a cross-over system. I was talking about the issue of an indefinate edge. I wish people would carefully read my comments before responding to them.
  • #79
  • Nov 10, 2008 7:43am Nov 10, 2008 7:43am
Quoting fxterrapin
I didn't state that they used a cross-over system. I was talking about the issue of an indefinate edge. I wish people would carefully read my comments before responding to them.

As I pointed out at the end of my comment: the "edges" of LTCM's strategies didn't fail.

I wish people would read [and understand] the replies correctly.

regards
daytrading
Enter Signature
  • #80
  • Nov 10, 2008 10:58am Nov 10, 2008 10:58am
Quoting daytrading
As I pointed out at the end of my comment: the "edges" of LTCM's strategies didn't fail.

I wish people would read [and understand] the replies correctly.

regards
daytrading
That is incorrect. Their edges DID fail since other hedge funds started using similar arbitrage techniques. In addition, one could argue that the Asian Crisis of the late 90s and Russia defaulting on its debt were sufficient to erradicate LTCM's edge. It's all in When Genious Failed.
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