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Greenspan and Currencies - Delusional?

  • #21
  • Sep 20, 2009 11:00pm Sep 20, 2009 11:00pm
The seeming ability of a number of banking organizations to make consistent profits from foreign exchange trading likely derives not from their insight into future rate changes but from market making.

there it is...
To Live is the rarest thing in the world , Most people exist , that is all
  • #22
  • Sep 21, 2009 12:59am Sep 21, 2009 12:59am
Quoting 137
hey i know people reading this thread must find my statements pretty annoying by now

I would say amusing more than annoying, you're trying to convince people who produce consistent gains that.....they can't produce consistent gains

Either you enjoy exercises in futility or there's some complex psychology going on here. What's your story? Tried and failed? Never tried? Want to try but scared to fail? Come on spill the beans, there's got to be more to this........
  • #23
  • Sep 21, 2009 1:56am Sep 21, 2009 1:56am
Quoting FX-Petra
I have posted extensivley on this topic in other threads....
Patterns exist on every level of life.

This world... the FX world is no different.

Patterns can be exploited to make money.

Markets aren't mathematical - if they were there would be a ton of MIT turd cutters on the forbes list.

There aren't.
  • #24
  • Edited 2:46am Sep 21, 2009 2:30am | Edited 2:46am
Quoting 137
no? with all due respect, how could it not be? if a system has no element of consistency then why the hell should it be traded? the fact is there has to be some sort of consistency. like you said the turtles' system was profitable 3 of 12 months - that is an example of consistency. a system that doesn't have any measurable profitable consistency is definitely not a tradeable system. it is a random pattern generator.
I am putting consistency in the context of people's experiences and expectations. I was suggesting that profitability is about the % gains of your trading account and less about consistency. Of course most people need consistent wins to be able live off. For most this consistency has to be on a regular basis, from daily to weekly. For others who are fortunate enough to have larger accounts are able to rely less on consistency on this smaller time scale.

Those that rely on consistent wins on a smaller time scale are much more prone to psychological error than those that rely less on immediate wins/consistency. The larger scale 'profiters' are more likely to be able to trade their system systematically knowing that eventually their wins will be greater than their losses making them profitable overall in the longer term.

The smaller time frame 'profiters' (those that require that they make x amount of money per day or week), are more likely to concentrate on improving their daily/weekly win/loss ratio and their pressure to maintain wins will be greater. As a result they are less likely to follow their trading rules for their system to get them back into profit and are more likely to keep adjusting their system and hop onto another method in the hope of greater consistency.

Systematically following your trading rules will put you in profit overall when you give it time to ride out the draw downs that it may produce -which will be different from month to month year to year, based on the flow of the markets. Looking for short term consistency will kill your trading mindset which will ruin your performance in regards to following your system which will lead to draining your account.

Of course, those traders that are making consistent wins on a regular basis already know the mindset required to trade profitably and stick with their trading rules regardless of the losses it might also produce. So fundamentally, its not about the consistency of the system its about the consistency of the trader to follow a set of rules. If the trader is foolish enough to follow an unprofitable trading system to begin with then that's a different problem altogether. But to suggest that all systems are unprofitable is ridiculous.
  • #25
  • Sep 21, 2009 2:41am Sep 21, 2009 2:41am
Quoting pipmutt
I would say amusing more than annoying, you're trying to convince people who produce consistent gains that.....they can't produce consistent gains

Either you enjoy exercises in futility or there's some complex psychology going on here. What's your story? Tried and failed? Never tried? Want to try but scared to fail? Come on spill the beans, there's got to be more to this........
like i've said, if these people are producing consistent gains by industry standards and have a proven system which doesn't rely on luck, then they must be on their way to the wealth we all dream about. ridiculous wealth if you will, obscene 'how can you live with yourself without helping people with 98% of it' kind of wealth.

call me a cynic but my guess is that they only think they have a consistent approach when in reality their profits are basically random and primarily based on luck. otherwise tell them to call up Buffett and get him to throw them a dime (10 million). why would he not throw spare change at a GUARANTEED (consistent) system, which, when you take compounding into effect, becomes a magical ATM?

here it is: i've written A LOT of EAs. ok so that doesn't work. now what? well there's that little word called 'discretion'. hmm discretion eh? like 'its gone up for a while so it should go down'? or 'its gone up for a while so it should consolidate'? or 'its gone up for a while so it should continue going up'? or 'its consolidated for a while so it should move up, or was that down?'? or 'its moved down then up then sideways so its definitely gonna move somewhere, or not'?

please enlighten me. how do i come up with a system that fulfills the definition of consistency so that i too can join this elite club of retail forex traders who built an ATM that doesn't have to be stocked and which was bought by an investment bank just in time to save the poor children of Sub-Saharan Africa?

ok, forgive me, i'm having a bit of fun with this. i'd rather be making money though.
change the future, not the past
  • #26
  • Sep 21, 2009 2:56am Sep 21, 2009 2:56am
Quoting Porkpie
I am putting consistency in the context of people's experiences and expectations. I was suggesting that profitability is about the % gains of your trading account and less about consistency. Of course most people need consistent wins to be able live off. For most this consistency has to be on a regular basis, from daily to weekly. For others who are fortunate enough to have larger accounts are able to rely less on consistency on this smaller time scale.

Those that rely on consistent wins on a smaller time scale are much more prone to psychological...
yeah for sure, fair enough, i would tend to agree with you on those points.

now it all comes down to how we agree to define consistency. i don't define consistency as 'well if we lose 10% this year then hopefully we'll make it up next year'. i define it as making 2%-3% per month while at the same time allowing for breakeven and small loss months. that sounds fair, doesn't it?

going by this (conservative) definition anyone who has a consistent currency trading system is the new Robin Hood.
change the future, not the past
  • #27
  • Sep 21, 2009 3:00am Sep 21, 2009 3:00am
I think the problem with your argument is that you use the word 'consistency' to refer to wins. If you consider the consistent losses, then to be profitable overall you will understand that one has to use Money Management, that allows for the probability that X amount of consecutive losses can happen at any time, in a period of day/week/year etc.

The above is the reason why trading sensible amounts of money per trade to see you through the potential period of losses, will not make any person using the system a billionaire any time soon. Succesful trading is about slow account growth and using a leverage that will allow you to withstand huge losses and still enable your account to grow, year on year.
  • #28
  • Sep 21, 2009 3:19am Sep 21, 2009 3:19am
Quoting 137
i'd rather be making money though.

I'm sure you would, but do you seriously believe a sarcastic and cynical approach with unrealistic expectations is going to get you there?

  • #29
  • Sep 21, 2009 3:24am Sep 21, 2009 3:24am
Quoting Porkpie
I think the problem with your argument is that you use the word 'consistency' to refer to wins. If you consider the consistent losses, then to be profitable overall you will understand that one has to use Money Management, that allows for the probability that X amount of consecutive losses can happen at any time, in a period of day/week/year etc.

The above is the reason why trading sensible amounts of money per trade to see you through the potential period of losses, will not make any person using the system a billionaire any time soon. Succesful...
well this thread is about asking the question 'does a consistently profitable system exist?' and i defined what i consider profitable consistency. you're talking about drawdown now. well i don't know why anyone would accept losing 20%-50% or more of their money at any given time. even 15% is too much. you'll have to excuse me for not including that as a defining characteristic of this 'holy grail'. to be honest i just assumed the accepted 10% rule.
change the future, not the past
  • #30
  • Sep 21, 2009 4:16am Sep 21, 2009 4:16am
Quoting 137
well this thread is about asking the question 'does a consistently profitable system exist?' and i defined what i consider profitable consistency. you're talking about drawdown now. well i don't know why anyone would accept losing 20%-50% or more of their money at any given time. even 15% is too much. you'll have to excuse me for not including that as a defining characteristic of this 'holy grail'. to be honest i just assumed the accepted 10% rule.
so it boils down to money management and knowing the ability of your system. Most traders will shit their pants at a 10% draw down then hop on another system and do the same thing again and not really understand why any of it happened. You can't just blame the system. Money/risk management has alot to do with it and seeing the bigger picture.
  • #31
  • Sep 21, 2009 4:16am Sep 21, 2009 4:16am
Quoting 137
well this thread is about asking the question 'does a consistently profitable system exist?'

4 years in the business and you're asking that question? What have you been doing for those four years, writing EA's?

Maybe it's time to rethink your vocation, trading isn't for everyone
  • #32
  • Sep 21, 2009 4:17am Sep 21, 2009 4:17am
Quoting pipmutt
I'm sure you would, but do you seriously believe a sarcastic and cynical approach with unrealistic expectations is going to get you there?

lol

a systemic approach which yields consistent results should not be considered unrealistic though. that's all i'm asking for.

its either one of three things:

1) the holy grail exists (a CONSERVATIVE 10%-30% per year) and Greenspan and his buddies are using their version of it to make an absolute killing as retail traders. he released this statement to a) throw us off the hunt b) to encourage the hunt c) for fun d) who knows

2) there is no magic 'when A happens do B' system and all we are really doing is guessing where the market is going thereby reducing our profits, whenever they come, to chance.

3) systems do in fact exist but are sporadic/unreliable and most definitely not consistent, blurring the lines between luck and 'skill'. and therefore these systems are not employed by serious traders, leaving the ones who do to continue rolling the dice.

so what do you think it is? my point in starting this thread is that its definitely not the first one.

have i been sarcastic? the funny thing is only partially.

am i a cynic? how could i not be? everyone should be a cynic coming into this 'market', that's the whole point of this thread!

but, and in all seriousness, i will ask you very nicely: please if you somehow know the answer to be #1, show me where i can begin to learn how to develop my version of this wonderful approach. i know ALL the forex cliches. all i need is the foundation of a proven, consistent system.
change the future, not the past
  • #33
  • Sep 21, 2009 4:24am Sep 21, 2009 4:24am
I think maybe you need to read 'Trading in the Zone', and try to understand trading itself first, it's all a matter of perspective.

All those trading cliches you already know are just as relevant today as they were when they were written, but it's no good repeating them parrot fashion, it's a state of mind
  • #34
  • Sep 21, 2009 4:49am Sep 21, 2009 4:49am
Quoting pipmutt
4 years in the business and you're asking that question? What have you been doing for those four years, writing EA's?

Maybe it's time to rethink your vocation, trading isn't for everyone
thankfully i don't consider forex my vocation.

over the last four years ive made money and i've lost money. and i've tested system after system. sound familiar? if not then please tell me what system you're using to consistent effect which, because of its ability to guarantee profit while maintaining an acceptable level of risk, will lead you to a career as a currency trader for a multinational financial organization. or tell me to f*ck off because you're happy just having this as a hobby similar to playing poker or betting on the game and that would be cool too.

hey, for the record, i hope i am wrong in agreeing with Greenspan's statement. then there might be a chance i could be the new Robin Hood.
change the future, not the past
  • #35
  • Sep 21, 2009 5:56am Sep 21, 2009 5:56am
Quoting 137
i've tested system after system. sound familiar? if not then please tell me what system you're using to consistent effect....

System, system, system.......forget systems for now, 95% of people spend all their energy and focus looking for a system to predict price direction and they totally don't see the 18-wheeler coming, they're looking in the wrong direction, the outcome is inevitable they get flattened! Just look how many people jam into the trading systems threads on this site, filled to the rafters with hopefuls but I guarantee you less than one in a hundred will make any money long term. Where's the trading, psychology, management sections or threads? Nowhere, they're not sexy enough, all people are interested in is something to tell them where Eur/Usd is headed in the next five minutes and guess what, even if you told them they probably still wouldn't be able to make any money!

Trading isn't systems, like I say it's a state of mind. Once you're familiar and conversant with the essence of trading then it really won't matter what you use, indicators, price action, patterns, fundamentals, moon cycles....it really doesn't matter.

Read that book, take the questionnaire at the beginning and again after you've read the book, if your answers aren't different then either you haven't understood the message or you knew the answers anyway and the book just reinforced your beliefs and understanding, but if that's the case then you're probably a consistently profitable trader already.

You asked if testing system after system sounded familiar to me. Yes of course, I think we've all been there, it takes some people longer for the penny to drop than others but either it drops or we say it can't be done and quit
  • #36
  • Sep 21, 2009 7:16am Sep 21, 2009 7:16am
What you are trying to do is noble... but you are wasting you time. You are in Big Foot territory. Thousands of folks believe in Big Foot, but nobody can prove it exists. Same thing with daytrading retail forex. Mr. Greenspan is an idiot. They have the proprietary system that no one has ever thought of before-- or if it has been tried before those that tried did not have what it "takes" to make it work. I do not mean to sound condesending. Please consider the possibility that whatever method you are employing, (this Fib, that Pivot, EW's, fractals, when the baby cries, where the next raindrop falls.... etc.), has been tried to the point of asburd exhaustion. Do you really believe that the vast majority of failed traders are stupid, or were trying to give their money away? Let's look at the number of busted traders vs the number of busted bucket shops. Are the people running the bucket shops just smarter than the rest of us? Maybe, just maybe, the bucket shops have a built in advantange. Maybe every race you run with your broker begins with a head start for your broker. Maybe Mr. Greenspan is not a bumbling fool.

So what's it going to be.... the blue pill or the red pill?

Again, I never said you could not make a lot of money in forex, only that you cannot predict short term price movements often enough to overcome negative expectancy. I wish the best to everyone.

Kindest Regards...
  • #37
  • Sep 21, 2009 7:41am Sep 21, 2009 7:41am
Quoting Porkpie
Just checked out your threads. So you pulled the plug on Forex last year and you mentioned you were successful in the e-mini. I am interested to know why you switched to forex and whether you are still trading the e-mini and how its going?
Yes, I am still trading forex. I have FINALLY started to show some consistent profits over the last 5 months... very close to the "expectation" of my system. It was not until I gave in to the notion that I could not predict where price was going that I began to make cosistent money. I have not arrived--- this system may well flame out.... but at least I am not pursuing a system based on false beliefs.

Regards,
  • #38
  • Sep 21, 2009 7:50am Sep 21, 2009 7:50am
Quoting FX-Petra
Again, I never said you could not make a lot of money in forex, only that you cannot predict short term price movements often enough to overcome negative expectancy.
That's quite alright, you don't need to and neither do you have the authority tell me or us what is possible. You can only state what you have found to be possible for you. I find it slightly irritating that you feel it necessary to extrapolate those experiences to everyone else as gospel yet people have repeatedly attempted to communicate their experiences which contradict your 'findings'. Both you and 137 have tried your hand at forex for a long time now, and yet apparently you haven't found anything that could provide an edge. The writing is on the wall for you; seek contentment elsewhere. I would think that others will see this for what it is - failure projection and pain avoidance.

All the best to you too.
  • #39
  • Sep 21, 2009 8:21am Sep 21, 2009 8:21am
Quoting pipmutt
System, system, system.......forget systems for now, 95% of people spend all their energy and focus looking for a system to predict price direction and they totally don't see the 18-wheeler coming, they're looking in the wrong direction, the outcome is inevitable they get flattened! Just look how many people jam into the trading systems threads on this site, filled to the rafters with hopefuls but I guarantee you less than one in a hundred will make any money long term. Where's the trading, psychology, management sections or threads? Nowhere, they're...
This is exactly why people lose money. FF should have a trading psychology/logic/philosophy section.

Here is an excerpt from my profile on this

Quote
I also highly suggest for any newbie to start and demo trade, developing a system, psychology, methodology, money management, and trade management.

A system consists of
1) Psychology/Mental Aspect
2) Money Management
3) Trade Management
4) Planning
5) System

That is my hierarchy of trading importance. The system which is last in the list, is of least importance. The concepts 1-4 are of most importance and are the keys to long term success.
  • #40
  • Sep 21, 2009 8:21am Sep 21, 2009 8:21am
Quoting birdt
That's quite alright, you don't need to and neither do you have the authority tell me or us what is possible. You can only state what you have found to be possible for you. I find it slightly irritating that you feel it necessary to extrapolate those experiences to everyone else as gospel yet people have repeatedly attempted to communicate their experiences which contradict your 'findings'. Both you and 137 have tried your hand at forex for a long time now, and yet apparently you haven't found anything that could provide an edge. The writing is...
Sorry birdit--- I did not mean to irritate you. That is NEVER my intention. I respect you and have enjoyed your postings. I know what I write is unpopular. Perhaps I should just go back to lurking for a while. I DO NOT know everything..far from it. I know there are some succesful forex traders out there who have beaten the odds. You are probably one of them. If so, I congratulate you on your success. If you were ever so inclined I think I could show you that have in fact beaten a game with the odds stacked against you.. but that is up to you. To take this any futher will only enflame passions and cause anger, and that would be wrong. As I said in my first post, it is a road to perdition. I wish you all the best,

Regards,
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