what really works through test of time ... ...

As the title shown,

I'm been thinking .... (cut long story short, below is what i shared in other post/forum)

This is just my observation/opinion:
- Seems every strategies have their strength/weakness, for all strategies that used indicator, it's just a matter of time market sentiment changed and the indicator might not be effective.
- With above statement is true, only a few strategy that can be used throughout time : one of them is Without indicator.
- Without Indicator , there;s only 3 i knew (feel free to add more, i want to learn) : Martingale , Grid, Breakout
- For breakout, since usually used High/Low of the day, so not necessary EA.And even then, there are many fake breakout, so hit SL is quite frequent. But again, in the long run still profitable.
- For Grid + Martingale worked best in range market. When market trend in one strong direction, it would usually kill these 2. And these 2 need large account to sustain high DD.
- For Grid, need to painfully kill many "hanging" trades to reduce DD, which might wipe out the entire week/months profit or wait for the market to return, which sometime never.
-For Martingale, for the DD, just need "enough" retracement to hit TP, and everything restart again .
- With these knowledge, I would prefer Martingale, thats why i'm posting here for more questions . With these, I hope we can share can learn more. Please correct me anything that i understood wrongly .

The above observation were through few years of experience, and it seems that in the long run without an edge or "what really works through test of time", a trader is doomed to be the 95% clubs loosing $$$.

Since we can;t predict the future of any currency pair, is there others ways to make a living in FX ?
Please open my thought to other possibilities ....
Let's discuss this topic, what really work in FX through test of time .....





PS: one of the way is sure guarantee is either becoming a broker or IB, but this path is not for me .

Forget martingaling, it doesn't help.

If you have a winning strategy it's not of additional use and if you have no winning strategy, martingaling won't help in the long run.

discuss? lets start with this chart. tell me what you think.

It's obviously a one minute chart and not worth to watch.

Martingale by itself doesn't work. You need indicators and other "things" whatever they might be.

how do you know its a one minute?

Probably because it looks so useless

(It can be even lower tf)

If you want to hear my opinion, it's wise to forget martingaling and focus on finding multiple systems that work on different markets. That way you will have a very nice combined curve. I would suggest looking only at d1+ and using r% (risk percentage) position sizing.

Also, breakouts really work - I could go into reasons (fat tail) but the main thing is that they work.

Markets are governed by the law of supply and demand. Understanding the supply/demand dynamic via price and volume goes back at least as far as Wyckoff (late 1800's to early 1900's). Understanding the supply/demand dynamic thru price alone goes back to at least the creation of the second wheel.

Scrap the Maringale idea. Martingale is a sure fire way to become the part of that 95% that loses in forex.

Another thing I have noticed in forums ... the word "Edge". Most trader when speaking of or about the word Edge, the words "Indicator" or "Strategy" is right behind it. Has anyone wonder as to word Edge really means. In my opinion, its a word to describe ones level of knowledge of the market. Without a true understanding of the how the market works, traders are destine to fail, not matter what strategy or indicator on might use. I love to see huge movements (such as Eur today) then watch traders post on forums with suprise as to why or how did the market move in the way it did, with such disbelief. It shows me that those traders hold no clue as to how the market works.

If you are doubling down on losing trades, then you better have deep, deep, deep pockets.
The market can remain irrational longer than most traders can remain solvent.
Doubling down on losing trades accelerates the race to insolvency.

True. The only way a Martingale system would win is if the trade following a loss had a higher probability of being a winner.

Martingale doesn't offer an edge in forex regardless of the probability of winning the next trade which of course can't be measured. The trader must first of all protect his capital and I don't see how he is doing this by increasing the risk based on a lost trade.

It is the poorest risk vs reward scenario. As your losses build your risk X grows far greater than your reward which usually remains as the initial variable. You do get your reward eventually but that depends on how deep your pockets go and your margin setup. In the end though it takes that 1 extra loss and your account is busted all in attempt to gain that "initial variable"

Razor

I remember going to the casino not to long ago (to feed the gambler in me) and after reading something interesting, regarding punters, roulette and the desire to pick the change of colour after a "certain change due to probable exhaustion". By this I mean the umpteen times you have seen 6 or 7 spins of black and every man and his dog betting on red only to look on in disbelief as black rolled in. It was an amazing experience and it was exactly as I read it.

The shear number of bets that where place against the momentum of the wheel to the comments of "next spin for sure", FOR sure next spin was met with the groans of pain. But still they place more money against it. 9 times black, then 10. After 10 you could read it on there face. The odds of 10 coming in in a row is unheard of. The only thing that changed where the number of bets. Most were well out, and by calculation the table limited bets at around 8 spins. This meant that starting off with the minimum bet and doubling on the loss after 7 spins the table maximum was reached meaning that your next bet didnt cover your initial loss (in most cases $10). Some came later in the event getting in around 5th or 6th spin but even at the 11th spin they were risking far far greater than there reward.

The 13th spin, which naturally had only 1 punter and 500 spectator all claiming that same chorus "red, red red, gotta be red" finally got the elation as the little white ball nestled itself in the red pocket. There were great cheers, but only 1 person to take the spoils.

This is a clear outline of the human need to tackle probabilities with a system (martingale) that will lead, eventually, to bust based on the rationality that it has to happen sooner or later. Martigales cant afford the later.

Not sure what compelled me to write this but I felt humour watching those placing 'irrational' bets. Had they taken momentum (black) with the same approach they may have quit after 7 spins or 8 with the table maximum, a far greater return on the initial bet. Had it come unstuck after 5 they would have lost the initial bet for an opportunity at a higher reward.

Guess thats human nature.

Razor

Very nice post! Thanks.

Bluefish

to martingale doesnt mean you need to continue to increase lots for no reason while getting eaten alive... I use a martingale system as one of my most stable systems... its all about how you use what you have.

Business and gambling is somewhat different. If you treat forex
as a casino, then go ahead and use your martingaling stuff.

Hey, it's your money: win or lose, just don't blame others for your
failure. Understand???

I, for one, use nothing more than old fashion price action. And I
don't use stoploss whatsoever. Call me naive, I could not careless.
In the end, it is how effective you are with your entry, exit, and your
management.

Therefore, the holy grail is me. It is not my strategy but me.

It should be obvious by reading this thred that Martigale in trading the FX markets is a loser's game.

I believe the original question was "what really works through the test of time?" Well the answer is simple. Its not sexy but it works. Learning to read what price tells you about the market. Matching that with fundamentals of BOTH countries on each side the the currency pair and following the overall trend.

That's it. Its very simple but its NOT easy. To this end I am attaching this link from FXstreet. http://www.fxstreet.com/forum/showthread.php?t=53230

There are three links (parts 1,2 & 3) of a series of FREE education on how to read price...yes price. Not inidcators...oscillators..."systems"...or even suppoprt/resistance...just good old fashion price analysis on the chart.

It is the ONLY thing that has stood the test of time since man first decided to represent prices in the form of a graph. Check it out...

I think this chart is a weekly chart.

[quote=paogeh;3173875]As the title shown,

I'm been thinking .... (cut long story short, below is what i shared in other post/forum)

This is just my observation/opinion:
- Seems every strategies have their strength/weakness, for all strategies that used indicator, it's just a matter of time market sentiment changed and the indicator might not be effective.
- With above statement is true, only a few strategy that can be used throughout time : one of them is Without indicator.
- Without Indicator , there;s only 3 i knew (feel free to add more, i want to learn) : Martingale , Grid, Breakout
- For breakout, since usually used High/Low of the day, so not necessary EA.And even then, there are many fake breakout, so hit SL is quite frequent. But again, in the long run still profitable.
- For Grid + Martingale worked best in range market. When market trend in one strong direction, it would usually kill these 2. And these 2 need large account to sustain high DD.
- For Grid, need to painfully kill many "hanging" trades to reduce DD, which might wipe out the entire week/months profit or wait for the market to return, which sometime never.
-For Martingale, for the DD, just need "enough" retracement to hit TP, and everything restart again .
- With these knowledge, I would prefer Martingale, thats why i'm posting here for more questions . With these, I hope we can share can learn more. Please correct me anything that i understood wrongly .


Hello folks

I have started to dig into Forex about 2 years ago. Recently I came to the conclusion that price action with adequate money management is what will take you the path of winning.

Breakouts:

Turtles demonstrated that it definitely works. Just have a look on any commodities daily chart and you will see that a simple 20 or 55 day breakout still works great.

Breakout is observation of price action. The price moves higher/lower compared to previous price.

I do understand that with currencies the same breakout model does not work as well as with equities or commodities. Also necessary is the use of the same model in a portfolio; you need to observe many non correlating currencies and take every signal without fail and have a portfolio management system in place that prevents overtrading.

Just check AUD/USD: Breakout in March 2009 until now - imagine how a simple breakout would have got you into the right side of the market. Holding onto such a position would have earned you a lot in PIPs and in overnight interest. That move was based on carrytrade interest difference, and that is what the big money does.

This is the big trick that successful traders use: Have a model that lets you do what the big money is doing and ride the wave.


My trading rules:

From my studies of some really good comments in FF made by traders I put together my personal list of trading rules:

Be on the right side of the market:
- be long when market in trending higher
- be short when market is trending lower

(Attention: No Martingale or whatever moneymanagement system will help you here on being on the right side of the market. Only: get out of the wrong position and take the loss!!!)

Be in the market as long as possible. (From reading: Most successful models stay in the market at all times or at a large % of time)

Position yourself in a market situation where the chance of being on the right side of the market is higher then 50%

Try to enter a position with a small stoploss, so that a large move earns you an imperial load of pips to offset the many trials to get into the market.

When the market goes against your already profitable position, scale out of your position until market reaches a point where your model tells you to reverse.

Get out of the losing position when everything tells you that you are on the wrong side of the market.


I was inspired by following posts in order to get my knowledge:
DIBS: http://www.forexfactory.com/showthread.php?t=86766
Vegas1h: http://www.forexfactory.com/showthread.php?t=4113


My rules seem to be trevial, but honestly, just recently I had eyeopeners that made me rethink many ideas and get to the simplicity of trading. And I came to discard all those many technical indicators I have tried. So far I am not yet there to be a successful trader, but I am trying hard and harder.

Good trading,
Fast