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Strategy of losers

  • #121
  • Oct 20, 2009 7:59am Oct 20, 2009 7:59am
My guess at the chart:

It reminds me of looking at usdchf and usdcad charts end of 2007, probably daily, maybe weekly.

It also reminds me, due to the obvious "trend", of charts I see every day... which is usually 5min eurusd.

... so my guess is one of those extremes of timeframe, and no real idea about pair !!!
  • #122
  • Edited 8:13am Oct 20, 2009 8:01am | Edited 8:13am
Quoting Ferrari
Ok guys, question time.

I just pulled this chart off metatrader...

What currency pair and timeframe is this chart taken from?

Attachment
How stupid can you get:

Price is a function of time! So, put up a valid X axis and Y axis - on that basis I will tell you that on a weekly chart you are more likely to find the price moving with directional bias uninterrupted in a continuous manner than on a fifteen minute chart.

Now, if that chart you put up held monthly candles, it would just make my point since there are 12 in a year and it shows that most of the time there are discernible trends (within that year).

If it is a chart that holds five minute candles, it also makes my point since in the sequence of 288 candles in a day, trends are clearly very short (in terms of pips per move).

And btw, would you ever put a trade on without knowing the value of it?

regards
daytrading
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  • #123
  • Oct 20, 2009 8:23am Oct 20, 2009 8:23am
@daytrading

My favorite is the hourly chart, I find that the lower time frames are too noisy and the upper are lagging. I also found out that the H4 is the worst possible time frame. (my opinion, H4 fans please don't panic).

You could very well spot very long trends on the weekly chart. In the past. But you trade today and if you enter a trade you must wait sometimes one month till you have some confirmation. That's ok if you study fundamentals, have some millions in the pocket and 10% percent profit yearly is ok.

I just want to say that every time frame has its problems and from theory to profit in forex is a long way.
  • #124
  • Oct 20, 2009 8:28am Oct 20, 2009 8:28am
Quoting Sauron
@daytrading

My favorite is the hourly chart, I find that the lower time frames are too noisy and the upper are lagging. I also found out that the H4 is the worst possible time frame. (my opinion, H4 fans please don't panic).

You could very well spot very long trends on the weekly chart. In the past. But you trade today and if you enter a trade you must wait sometimes one month till you have some confirmation. That's ok if you study fundamentals, have some millions in the pocket and 10% percent profit yearly is ok.

I just want to...
Yes, I agree.

There are certainly valid points and it provides a great variety of opportunities across the board, having all those different time frames.

As you said, when making the choice, one has to pay attention to more than just the chart picture itself.

All the best.

regards
daytrading
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  • #125
  • Oct 20, 2009 11:33am Oct 20, 2009 11:33am
Quoting triphop
If it's possible to be wrong far more than chance dictates, it's possible to do the reverse. The most dispiriting result is to get roughly half and half.
Interesting thought. You mentioned that when trying a static 1:1 R:R (-spread) support and resistance system, you lost 10 times in a row. On your balance sheet this would look like a trend (sadly, a downtrend), but nonetheless uncharacteristic behavior if this were mere random trading. Now I wouldn't consider 10 trades to sufficiently represent the full capacity of whatever system you were trading. Traders suffer periods of drawdown, and you might have honestly just picked a bad time to test your theory. For all you know, the next 10 trades might have gone in your favor.

Regardless, if your trading did represent more of a 50/50 outcome, I would agree that you would be further away from having anything to work with then ending up with the skewed results from your test. One might also say (and this is just a random thought as I am not currently successful) that in trading, step one might result in 50/50, break even trading as you really have no basis for what you are doing, and therefore no direction either way. Step two might be when you have a complete and almost intentional blowout (as you experienced above), and step three is finally turning around those novice differences that blew you out and now finding success. I know the path to success never follows a clear path such as above, but are there any thoughts on that from the pro's?

Back to your string of losses: the next question is "what made me lose?", and that is the point of this thread --the mind of the loser-- and much has been said about the disadvantages of the retail trader. But to look for an edge, I think its also important to highlight what the advantages we do have.

Retail traders have:

 

  1. The ability to get into and out of the market quickly
  2. The ability to trade without the stress of a boss (you touched on earlier)
  3. The ability to trade without moving the market (for most of us)
  4. The ability to use sub-standard contract sizes to adjust position sizes to our account
  5. Access to high leverage on small account balances (a plus if your not an idiot)
  6. ...any others anyone?

Banks must constantly expose themselves to the market in order to mitigate the risk they take on from their customers. When a large institutional order comes accross the line, they might be limited in how they trade it, and so they place the order at the cost of the transaction itself (with another bank), the cost of information (giving away their position), and the cost of price itself (moving the market against their own position), among other costs I'm sure.

The point is, a bank might incur costs that the retail trader doesn't, so how can a retail trader take their cut of such costs? I haven't perfected my answer to that question yet, but perhaps the playing field is more level then we think.

All I ask for is a chance to prove that money cannot make me happy.
  • #126
  • Oct 20, 2009 12:02pm Oct 20, 2009 12:02pm
Quote
but perhaps the playing field is more level then we think.

It can be. A retail trader is small and mobile, while the large participants are slow and clumsy. The retail trader has disadvantages, but also advantages. We can get in and out, we're not forced to take positions, hedge risk, provide a service etc. I'm sure many retail traders think of institutions as the enemy, when really, they are prey. The small, fast traders feed off all less skilled and/or slower participants. Like a mosquito that can't be swatted.
  • #127
  • Oct 20, 2009 12:13pm Oct 20, 2009 12:13pm
Quoting Mr J
Of course letting profits run too long is harmful, that's why it is too long rather than just long! I will agree with you that we shouldn't let profits run just for the sake of seeing what happens next, but if we think it is profitable to hold the position, that's what we should do.

Randomness is probably better to you. I'm guessing that you might use it to remind yourself that there's much you don't know, and to stay out of it? I think more of "unknown" because I like to remember that there is a reason behind everything, even if I don't...
My 2 cents, markets are not entirely random but have a huge degree of randomness, the smaller the time frame the greater the degree of randomness one will observe.

To simplify it, lets say the market is in a strong up trend and this up trend consists of a 51% change of an hourly candle moving up and a 49% chance of it moving down by an equal amount.

If we enter long and close an hour later, what are the chances we win what we risked minus the spread? 51%. What are the chances of winning if the trend remains for a week and we go long? Much higher.

At least that's how I see it.
  • #128
  • Oct 20, 2009 1:23pm Oct 20, 2009 1:23pm
Quoting Ferrari
No, no coins flips. That is a real chart I just pulled off metatrader. I took out the chart stamp with paint and uploaded it. The point is it doesnt matter what chart it is, is no one getting this? Read the quote that is in that post.
Of course we're all getting what you are trying to say: that without the numbers on a chart it would be rather impossible to tell what TF we're looking at.

Unfortunately, that data you omitted makes all the difference to anyone who has some idea about trading when looking at any chart for that matter - seeing that chart and knowing that we're looking at weekly or monthly candles with an average range of 200 to 300 pips (weekly) and almost double that for monthly, can mean that 2 successive up candles represent an uptrend of 600 to 1000 pips.

Conversely, looking at 15 minutes, with the data, we know that 2 up candles may represent an average of 30 pips. One would need to complete over 30 successful trades on the lower TF to get the same result - providing we don't add on the longer term position.

It is of no importance what the chart looks like without any of the numbers - or to make people here look stupid by way of asking such questions.

Would be the same as if I send you into a casino in the US where all dollar bills have the same dimensions and there was no print on them - how would you know what your bet is with blank paper that could be 1 or 100 dollars judging by the size?

If you have a different opinion on the matter, that's fine - but use more appropriate examples to make a case for your statements.

regards
daytrading
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  • #129
  • Oct 20, 2009 1:42pm Oct 20, 2009 1:42pm
Quoting slimcat
If they know where the majority of retail traders are placing their orders they only have to move it 50 pips against that price and most retail traders will be forced to exit based on account size and inexperience etc.

You have said that you aren't going to reveal certain things but would you be able to post the information that you have gathered and then we can read it to see if we can come to the same conclusions as you.
Hi Slim, thanks. Don't forget in all this retail is a very small pot; noone's really interested in going after the retail orders apart from retail brokers and they're generally too small to move anything at all interbank level. So it's a bit like looking at futures to derive price direction; you're assuming 'real' participants might be doing the same.

If I posted the information I gathered, FF would need another server. No joke.
I stated the general principles, which funnily enough FXCM have been touting for years. They happen to be true too. And still noone pays them heed. Even on this thread .

I don't want to get into too many specifics for the reason that I've been working on a strat for a year - it's way too much to give away for free, and also because it also puts me in a position of teacher. Nothing wrong with teaching mind, but I find trading's a lot easier if you keep asking questions.
  • #130
  • Oct 20, 2009 2:09pm Oct 20, 2009 2:09pm
Quoting Marsh
Interesting thought. You mentioned that when trying a static 1:1 R:R (-spread) support and resistance system, you lost 10 times in a row. On your balance sheet this would look like a trend (sadly, a downtrend), but nonetheless uncharacteristic behavior if this were mere random trading....
Nice post Marsh. To be clear, though S/R had an input, when I lost 10 times in a row I was trading on 'instinct'. I was looking at PA (not being much of a PA student obviously), which approximated to "it's going up, follow. It's stalling, reverse." As a 'style' of trading if I could even call it that, it was about reacting to price, and never anticipating. It could have been unlucky fluke true, but that was the reason for kicking off my study.

As for the edges, that's a good old list. And as for price inefficiencies; that's another thread but yes, I'm behind you 100% with your thinking.
  • #131
  • Oct 20, 2009 5:21pm Oct 20, 2009 5:21pm
Quoting Ferrari
Ok guys, question time.

I just pulled this chart off metatrader...

What currency pair and timeframe is this chart taken from?

Attachment
usd/mxn hourly
  • #132
  • Edited 4:46am Oct 21, 2009 4:32am | Edited 4:46am
Quoting triphop
You won’t find this advertised by your broker. What percentage of time do you think retailers (en masse) are winning more than they’re losing? Would you expect it to be similar across different pairs? To figure this out, I took 9 months of position data from Oanda, and divided it up into neutral (winners and losers roughly in balance), losing and winning.

For the EURUSD, retailers spent 0.5% of the time in profit, 12% running at or near b/e and 87.5% losing. Nice work eh? Ever get the feeling you’re in the wrong business? Looking...
Just noticed this thread - I want to point out something, EURUSD has not been the pair it used to be last 9 months.

Long term (~10 years at my tests) at least with my strategies EURUSD is by far the most profitable pair. However this of course depends totally on how you trade.
  • #133
  • Oct 21, 2009 4:40am Oct 21, 2009 4:40am
Quoting Alderlug
The markets are absolutely random. Everybody except the losers and the newbies knows that. It is a pure fact like the fact that the earth is not flat. Why discuss facts?? A waste of time.
Because it's not true. I always like to link to this book (free, downloadable) when people claim that market is random.

http://press.princeton.edu/titles/6558.html
  • #134
  • Oct 21, 2009 5:02am Oct 21, 2009 5:02am
Quoting Alderlug
The markets are absolutely random. Everybody except the losers and the newbies knows that. It is a pure fact like the fact that the earth is not flat. Why discuss facts?? A waste of time.
u seem pretty convinced about ur argument.

how about not discussing it ... but demonstrating it?
  • #135
  • Oct 21, 2009 5:45am Oct 21, 2009 5:45am
Why are people desperately trying to 'prove' that markets are non-random? Well, I know the reason...
  • #136
  • Oct 21, 2009 5:49am Oct 21, 2009 5:49am
Quoting Alderlug
Why are people desperately trying to 'prove' that markets are non-random? Well, I know the reason...
and why are u so unwilling to proof they are random? Well, I also know the reason ...

because u can't.
  • #137
  • Oct 21, 2009 6:09am Oct 21, 2009 6:09am
The point he is trying to make is that if you say the markets are not random, to be able to prove it you'll have to describe an edge you have over the market. Don't be a smart ass. Oh, you deleted your post.
  • #138
  • Oct 21, 2009 6:16am Oct 21, 2009 6:16am
Quoting Ferrari
The point he is trying to make is that if you say the markets are not random, to be able to prove it you'll have to describe an edge you have over the market. Don't be a smart ass. Oh, you deleted you post.
hello Ferrari,

well ... i am always opened to a sound debate ... but as he said "EVERYBODY KNOWS THE MARKETS ARE RANDOM" and "IS A FACT LIKE THE FACE OF EARTH IS NOT FLAT" ...

well... i'd honestly like to know:

who is "everybody",
why "everybody" states markets are random...

and yeah ... why the face of earth is not flat has WAY TOOOOOOOOOO MANY DEMONSTRATIONS ... why not giving at least one of his statement?

because he has no way to prove it ... maybe he was told was random.. and he believes it .. that is ok ...

but coming rudely enough just to state that EVERYBODY is right except the ones that dont agree ... is very childish.

we are in a forum ... and a scent of a forum is the debate ... debate is ONLY enhanced by arguments ... solid ones ... not one line stating whatever .. that is not debate ... that is fundamentalism.

in that case ... this guy is most likely to go and look for a forex sect ... not a forex forum.

that is my opinion though.
  • #139
  • Oct 21, 2009 6:17am Oct 21, 2009 6:17am
This is kind of like a theological debate there is a god, no there isn't, but yes there is, but no there is not. This ends up being another discussion you have to be careful what you say based on who is around, just like religion and politics.
  • #140
  • Oct 21, 2009 6:23am Oct 21, 2009 6:23am
Quoting endroute
This is kind of like a theological debate there is a god, no there isn't, but yes there is, but no there is not. This ends up being another discussion you have to be careful what you say based on who is around, just like religion and politics.
according to what i've found and starting to test ... i am for a NON-RANDOM market ...

i respect the ones that dont think alike.. because maybe i am wrong ... or maybe it doesnt matter what we believe.. maybe markets are so vast that u can profit from them being a random or non-random enthusiast ...

but again ... there are some etiquettes to address respectfully the ideas in a forum ... and we shall demand them for the sake of preserving a healthy debate enviroment.

i agree with u ... this tends to turn as a religious debate ... but truely smart ppl know that they are not flawless ... and that becomes a virtue called tolerance...

when ppl think they are flawless ... they become ... as i said above "fundamentalists" ... in other words "fanatics"...

and THOSE are dangerous for a free-society ... just ask hitlerian germany ... stalinist USSR ... etc...

anyways.. this is trading debate ... and i an FOR a non-random market...

and yeah ... i see not a single tick out of a pattern ... that is my OPINION ...
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