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This so called "self-destruction" of trading systems...

  • #81
  • Edited 5:35am Mar 17, 2007 4:35am | Edited 5:35am
Quoting FXTerminator
Igor, I respect you as a fellow currency trader (even though I did not like your forex book a bit) but I have strong doubts about those alleged multi million mega trades of yours that "stopped the market for a few hours" (??). When did those trades (exact date and time) take place exactly? I mean if you were trading the Russian Ruble against the Indian Ruppee, I would understand, but on the EUR/USD???
So far I have seen nothing that would make you qualified enough to like or dislike anything that would be related to FX trading. Of course, except for some back-slapping manners towards some fellow traders of yours.
I don't remember when exactly I was able to dry the liquidity out on EUR/USD for a while. It didn't happen just once. But it seems that you called me a lier. However, your doubts about my actual trading can be cleared easily. Let's make a simple bet. I will bet on the fact that I can send a sample of my actual trading statement to a third party of your choice (any forum's moderator would be fine with me) and if this third party confirms that I told the truth in my post about the size of my actual trading positions, then you will never ever post again on this forum. Same thing I will do in case I fail to produce this info. I would have no problem posting the statement even here, but there is a limit for a picture size. How does it sound to you? Have we reached a deal?
Quoting FXTerminator
Yes, it's called a breakout and it happens all the time, this is perfectly normal.
It does NOT mean, however, that John Doe or any other small trader can move the forex market from his tiny mini mini account at will, if this is what your post is implying.
I know how it is called. And also know "that any John Doe or any other small trader can move the forex market from his tini mini mini account at will" if he places $1.6 bio order into the market, as my post was implying.
  • #82
  • Mar 17, 2007 6:31am Mar 17, 2007 6:31am
If my system assumes buying when price is going up then I'm taking money from those who decided to sell. When they go bust, there are no sellers any more and price is going up even faster. It means a bit of slippage but move should be bigger and it should let me use tighter stops (ie. smaller loses or bigger position). Why is it bad?
On the other hand, if system buys when price goes down then popularity of my system may cause price never get there. Then the system would break down. Maybe that's the reason why I dislike systems that try to forecast future price instead just react on current price?
  • #83
  • Edited 4:10pm Mar 17, 2007 3:06pm | Edited 4:10pm
Quoting Igrok
I don't remember when exactly I was able to dry the liquidity out on EUR/USD for a while. It didn't happen just once. But it seems that you called me a lier.
There seems to be some confusion here, I did not call you a liar, I simply have doubts about your alleged ability "to stop the [EUR/USD] market for a few hours" because your "dealer confirmed that [your] trade was the reason for the market to stall."


Quoting Igrok
However, your doubts about my actual trading can be cleared easily. Let's make a simple bet. I will bet on the fact that I can send a sample of my actual trading statement to a third party of your choice (any forum's moderator would be fine with me) and if this third party confirms that I told the truth in my post about the size of my actual trading positions
Again, I am not interested by the size of your forex positions, only by your ability to "stop" the mighty EUR/USD for a few hours. You said you have your FX account statement handy, then just tell us the exact time and date of this particular transaction and let us see for ourselves on the historical charts, simple as that. Is that too much to ask?

Of course you don't have to tell anything, it's up to you.
  • #84
  • Mar 18, 2007 11:32am Mar 18, 2007 11:32am
Quoting FXTerminator
First of all the famous Turtles traders trade on the futures market and this market is at least 100 times LESS liquid than the the forex market, ALL contracts combined. And as you know, it's sooooo easy to "manipulate" these thinly traded contracts like Orange Juice, Palladium, Oats, Lumber, Platinium, etc... the smallest rumor and the prices hit the roof.
as i pointed out earlier. 30 million lots are traded daily on the forex
2,100 million shares are traded on the nasdaq alone.

70x more units are traded on the stockmarket then in forex
forex has much *less* volume then the stockmarket based on units traded.
And.... people used turtles on forex until it didnt work, then they used turtle soup on forex until it didnt work.
  • #85
  • Mar 18, 2007 11:43am Mar 18, 2007 11:43am
Quoting witchazel
people used turtles on forex until it didnt work, then they used turtle soup on forex until it didnt work.
Whats interesting is that once the turtle method was released, the turtle soup method was designed to exploit the known rules of the turtle method. Turtle soup was the REASON turtle method stopped working.
  • #86
  • Mar 18, 2007 11:46am Mar 18, 2007 11:46am
Quoting FXTerminator
Just like in life in general, if everyone could work hard and be disciplined we would all be rich doctors and lawyers and so forth. But how MANY people actually work hard enough to be a successful person? The fact is most people are just plain lazy and prefer to work just the minimum.

Same thing in forex, you could publish the best trading system on earth on the first page of the New York Times and a month later 90% of the traders are already searching for something ELSE the minute they encounter their first serious drawdown.
so your thesis so far:
1) everyone should share their system
2) there are already really good public systems
3) no one uses the public systems correctly

so, people who spend months or years working on their own system should just take a chance and put it out there, spend their time trying to teach it so everyone can use it incorrectly.

i share my systems and information with individuals. its not being stingy its just after you put in 2000 hours to make you own system you dont want it to get ruined. And even if it wouldnt ruin the system to share it, why do I owe you 2000 hours of work?

on the other hand I do enjoy helping people learn to make their own system. its like daddy buying you a new car for high school, it just gets crashed. buy your own car and you might even keep it clean.
  • #87
  • Mar 18, 2007 2:27pm Mar 18, 2007 2:27pm
Quoting witchazel
as i pointed out earlier. 30 million lots are traded daily on the forex. 2,100 million shares are traded on the nasdaq alone. 70x more units are traded on the stockmarket then in forex. forex has much *less* volume then the stockmarket based on units traded.
And....
You are comparing oranges and penguins. It's like saying that this store has 500 units of beer (at $1 each) while this other store has only 10 "units" of Rolls Royce (at $250,000 each), so the beer store is more "liquid" per unit?!??

The entire US market has an average daily volume of 10 billions, compared to more than 2 trillions on the Forex.

Again, you cannot destroy a FOREX system simply because there is way too much liquidity.


Quoting witchazel
people used turtles on forex until it didnt work, then they used turtle soup on forex until it didnt work.
You cannot make money with the Turtle system on the forex market for one very simple reason: the turtle system needs extreme diversification to make money! The system MUST trade many, many different NON-CORRELATED markets to make money (gold, oil, soybean, corn, silver, coffee, sugar, cotton, cattle, cocoa, yen, pound, copper, lumber, orange juice, etc...). The Turtle system has been created and taylor-made for the FUTURES MARKET, there lies its effectiveness.

No such "diversity" exit on the FX market because all the currencies move in tandem most of the time, so the system cannot possibily make any money on that highly correlated market. It's like asking a penguin to live in the Sahara.

That's why the forex Turtle sytem is failing and NOT BECAUSE too many people are acting on it, please enough of this myth already.
  • #88
  • Mar 18, 2007 2:55pm Mar 18, 2007 2:55pm
Quoting witchazel
as i pointed out earlier. 30 million lots are traded daily on the forex
2,100 million shares are traded on the nasdaq alone.

70x more units are traded on the stockmarket then in forex
forex has much *less* volume then the stockmarket based on units traded.
And.... people used turtles on forex until it didnt work, then they used turtle soup on forex until it didnt work.
Nonsense, lots of people trade less than 1 lot, and very few people trade 1 stock. What matters is monetary value and here forex is the biggest, no point arguing about it.
L

ps. then != than
  • #89
  • Edited 3:20pm Mar 18, 2007 3:03pm | Edited 3:20pm
Quoting witchazel
so your thesis so far:
1) everyone should share their system
Did I say that, where ??? I simply said you cannot "destroy" a forex system simply by publishing/posting its trading rules, period.

Quoting witchazel
2) there are already really good public systems
Yes, maybe even right here at FF...

Quoting witchazel
3) no one uses the public systems correctly
No, all I said was this: most traders do not have enough discipline to follow a trading system, no matter how good the system is. They will always do one of the following :

1/: They will try to be smarter than the system by changing its rules from time to time. "Hey let's move the stop, I have a feeling (??) this trade needs more room to breath". Then they stupidly let the market move against them 200 pips instead of just 35 pips. Another scenario "Ok, let's close this trade now, 10 pips profit is better than nothing". 20 minutes later the market has moved an extra 110 pips in their favor and now they look like total idiots with their lousy 10 pip profit.

2/: They will not take EVERY trade that the system is signaling, they will place the trade THEY "like". Well guess what: the trades we "like" are almost always losing trades, while the trades that are psychologically difficult to initiate end up making us money. As I said before, most good winning trades are counter-intuitive! It does not pay to do the "easy" thing in trading.

3/ They will abandon the system completely at the first serious drawdown and search for the next "best" system.

So you see, even if you give traders the best trading system in the world, they will ALWAYS find a way to screw things up.
  • #90
  • Mar 18, 2007 3:48pm Mar 18, 2007 3:48pm
Quoting FXTerminator
So you see, even if you give traders the best trading system in the world, they will ALWAYS find a way to screw things up.
Then why bother having this discussion at all?
  • #91
  • Mar 18, 2007 3:58pm Mar 18, 2007 3:58pm
Quoting Darkstar
Then why bother having this discussion at all?
Why, do you see a contradiction somewhere?
  • #92
  • Mar 18, 2007 4:22pm Mar 18, 2007 4:22pm
Quoting FXTerminator
Why, do you see a contradiction somewhere?
Somewhat. If there is no point in sharing a system because traders will only seek to screw it up, why have a discussion about the impact of sharing a system at all? What difference does it make if a system gets shared?
  • #93
  • Mar 18, 2007 5:02pm Mar 18, 2007 5:02pm
Quoting Darkstar
Somewhat. If there is no point in sharing a system because traders will only seek to screw it up, why have a discussion about the impact of sharing a system at all? What difference does it make if a system gets shared?
That's precisely my point: sharing a system will not ruin its effectiveness because:

1/ The forex market is too liquid, it can absorb all the "extra" volume created by ANY system, no matter how many traders are acting on that system.

2/ Most traders will not follow any particular system for an extended period of time anyway, they will either modify the trading rules to their liking, fail to trade all the signals or simply abandon it after a while, when they experience their first drawdown.

In other words they play with their new toy for a while and then, like kids, they throw it away looking for the best next toy.
  • #94
  • Mar 18, 2007 5:09pm Mar 18, 2007 5:09pm
Quoting FXTerminator
That's precisely my point: sharing a system will not ruin its effectiveness because:

1/ The forex market is too liquid, it can absorb all the "extra" volume created by ANY system, no matter how many traders are acting on that system.

2/ Most traders will not follow any particular system for an extended period of time anyway, they will either modify the trading rules to their liking, fail to trade all the signals or simply abandon it after a while, when they experience their first drawdown.

In other words they play with their new toy for a while and then, like kids, they throw it away looking for the best next toy.
Right, so if nobody benefits from the sharing either way, why have a discussion about sharing in the first place?
  • #95
  • Mar 18, 2007 5:52pm Mar 18, 2007 5:52pm
Quoting Darkstar
Right, so if nobody benefits from the sharing either way, why have a discussion about sharing in the first place?
Darkstar, I think you are reading my posts in diagonal.

This thread is NOT an invitation to share or not to share a forex system, I really don't know where you get this idea from.

I am simply trying to explain that a forex system cannot possibly lose its power even if you publish its trading rules on the front page of the NY Times for example, that's ALL we are debating here.

And no, some people WILL benefit from the sharing, but they represent a very, very, very small minority because it takes tremendous discipline to trade a system religiously, without EVER deviating from its rules.
  • #96
  • Mar 18, 2007 6:17pm Mar 18, 2007 6:17pm
zaq
Quoting FXTerminator
Darkstar, I think you are reading my posts in diagonal.

This thread is NOT an invitation to share or not to share a forex system, I really don't know where you get this idea from.

I am simply trying to explain that a forex system cannot possibly lose its power even if you publish its trading rules on the front page of the NY Times for example, that's ALL we are debating here.

And no, some people WILL benefit from the sharing, but they represent a very, very, very small minority because it takes tremendous discipline to trade a system religiously, without EVER deviating from its rules.
I get what your saying. I'm posing the related question to determine what purpose this thread serves. If most people gain no benefit, why share in the first place? If there is no purpose in sharing, what insight are we gaining by debating the impact on shared systems?
  • #97
  • Mar 18, 2007 6:19pm Mar 18, 2007 6:19pm
Does news straddling count as a system? Felix did about as much as he could to publish that on the front of the New York Times and it doesn't work the same anymore.

In fact, many credit Felix with actually changing how Oanda operates. I have spoken to 3 people that were straddling at Oanda since 2005 and they say for certain its over exposure changed it.


Now... this is for arguments sake. I personally DO NOT think straddling is a system.

FXTerminator, I certainly do not disagree with you about people finding a system and going to another etc etc. However, I do not believe blanket statements about anything... including FOREX systems is appropriate.

DarkStar, I do not think this thread was a system harvest.

I enjoyed the discussion, new week now... gap on JPY pairs! Time to trade.

The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #98
  • Mar 18, 2007 7:05pm Mar 18, 2007 7:05pm
Quoting Darkstar
I get what your saying. I'm posing the related question to determine what purpose this thread serves. If most people gain no benefit, why share in the first place?
And if most people continue to sin anyway, why print and distribute more Bibles or build more churches or share the Gospel, right? Is this what you are trying to say?

Quoting Darkstar
If there is no purpose in sharing, what insight are we gaining by debating the impact on shared systems?
WHERE is it said that there is no purpose in sharing, where??? Because I'm sure as hell I did not say that.
  • #99
  • Mar 18, 2007 7:11pm Mar 18, 2007 7:11pm
Quoting StockKJay

Now... this is for arguments sake. I personally DO NOT think straddling is a system.
I don't either, it's just that our friendly FX brokers like to play tricks with us during the news.

Quoting StockKJay
FXTerminator, I certainly do not disagree with you about people finding a system and going to another etc etc. However, I do not believe blanket statements about anything... including FOREX systems is appropriate.
Well if someone wants to prove me wrong on that statement, he/she is more than welcome.
  • #100
  • Mar 18, 2007 7:34pm Mar 18, 2007 7:34pm
Quoting FXTerminator
WHERE is it said that there is no purpose in sharing, where??? Because I'm sure as hell I did not say that.
I'm not saying it has been said, I'm asking the question. If nobody is going to use the information, why share it at all?
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