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

  • #21
  • Oct 30, 2009 8:31am Oct 30, 2009 8:31am
Quoting gspajon
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....
so do me a favor define price action... and then explain it. dont worry i know you cant
  • #22
  • Oct 30, 2009 9:13am Oct 30, 2009 9:13am
Quoting gspajon

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...
Thats it, cat is out of the bag. Thanks for posting it.
  • #23
  • Edited 10:31am Oct 30, 2009 9:59am | Edited 10:31am
Quoting domino
so do me a favor define price action... and then explain it. dont worry i know you cant
My definition of price action would be the following: A series of price movements both up and down defined by a given amount of time. (1 min - 1 day - 100 ticks).

Explanation of said definition: The movements seen in any given time frame no matter how long or short represent individual traders or insitutions expresing their believe or speculation about future price movements. If the volume of buys is greater than the volume of sells the time frame will be bullish. If the volume of sells is greater then the time frame will be bearish.

As I said before it is very simple but NOT easy. The clue lies in your interpretation of any given price action. How you interpret this allows you to make a decision on whether to buy or sell or do nothing. I say YOUR interpretation because that is precisely what it is YOURS.

However learning to read what price tells you about the underlying market is again difficult, but simple and can be done if you truly WANT to do it.

Once you have this skill, you will be able to "read" changes in the market, no matter how slight and derive a meaning that YOU (and only you) can interpret to assist you in making a decision.

Robots, EA's, programing no matter how well written, canNOT do that. They can be useful, but as something that "stands the test of time", I think the jury is still out. This is not to say that I don't use EA's or Bots, but they are a tool like anything else. A Tool and NOT the master craftsman. I have many tools in my kit but only I decide which one to use. I do this based on my ability to "read" what price action tells me about the market.

Again it is simple but not easy. Learning to play the blues is simple. Three chords...12 bars, but playing like BB King is difficult (but not impossible).

I digress...I hope my definition can satisfy your challange.
  • #24
  • Edited 10:42am Oct 30, 2009 10:27am | Edited 10:42am
Quoting domino
discuss? lets start with this chart. tell me what you think.
As you first requested here is MY interpretation of the chart you submitted.

There are a series of higher highs and higher lows that formed a bullish trend. However most recently, that trend seems to be at the point of reversal. Price retraced and has now formed a new lower high and has now moved below both the trend supprt line and the low of the most recent low point (thereby forming a new lower low).

Lower high & lower lows = bearish sentiment. This could be the start of a new bearish trend but until you have a SERIES of lower lows AND lower highs that will not be confirmed.
Attached Image (click to enlarge)
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  • #25
  • Oct 30, 2009 11:44am Oct 30, 2009 11:44am
Quoting gspajon
My definition of price action would be the following: A series of price movements both up and down defined by a given amount of time. (1 min - 1 day - 100 ticks).

Explanation of said definition: [i]The movements seen in any given time frame no matter how long or short represent individual traders or insitutions expresing their believe or speculation about future price movements. If the volume of buys is greater than the volume of sells the time frame will be bullish. If the volume of sells is greater then the time frame will be...
main points - price action is price moving up and down over time... the action of price.. also refered to as the footprint of money.. aka a chart so if your looking at a chart your looking at price action... and your saying to understand price action is key.. so using

what i learned in logic class at penn state...

to be profitable you must understand price action
price action is footprint of money
footprint of money is a chart
price action is a chart
thus to be profitable you must understand reading a chart..

awesome i feel like ive really discovered something today to be a profitable trader i must understand charts.

its so incredibly guruish - and discretionary.. anything can really be price action so everything is price action so you could teach moon cycle trading and could lable it price action or andrew pitchfork and lable it pa or 1-2-3 high low breaks... or pin bars. or trendlines or whatever and thus no matter what it is its price action...

thanks i like it when people say trade PA but no one knows what it is and if they do they couldnt define it ... PA generally means trade hiow you feel about price...
  • #26
  • Oct 30, 2009 11:48am Oct 30, 2009 11:48am
Quoting gspajon
As you first requested here is MY interpretation of the chart you submitted.

There are a series of higher highs and higher lows that formed a bullish trend. However most recently, that trend seems to be at the point of reversal. Price retraced and has now formed a new lower high and has now moved below both the trend supprt line and the low of the most recent low point (thereby forming a new lower low).

[i]Lower high & lower lows = bearish sentiment. This could be the start of a new bearish trend but until you have a SERIES of...
this chart is a randomly generated excel chart i can create a 100 of them in 2 sec....
its funny how randomness fits into these ideas about charting and TA but if you ran simple test on the data the stats come back as close to 50/50 the E10 is close to .998 -e50 is 1.01 pure randomness.
  • #27
  • Oct 30, 2009 12:00pm Oct 30, 2009 12:00pm
[quote=Getrich Fast;3190168]
Quoting paogeh
As the title shown,

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

[color=Blue]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...
you assume that martingalers enter at random and continue to martingale into huge drawdowns until they blow there accounts..

true martingales realize their edge and their money management and how it works together.. since you are a turtle trader or whatever you of all people should realize this as per in "the way of the turtle" curtis faith talks about edge from entry and exit and the strategies to buying and selling to create edges from randomness. How to skew the distributions of profitable trade by simply entrance tactics exits tactics cutting the bleeders and pumping the runners.
A good martingale strategy will take a edge and amplify the efficiency and safety
a good martingale strategy does trade with a stop in log style charting which few use
and controls risk well with an edge.
  • #28
  • Oct 30, 2009 12:08pm Oct 30, 2009 12:08pm
Quoting domino

thanks i like it when people say trade PA but no one knows what it is and if they do they couldnt define it ... PA generally means trade hiow you feel about price...
If I may,......
PA is a movement of the price, but you are right, it is how I feel about it.
I don't see this as a bad thing though.
In my minds eye, I see traders worldwide ready to pull the trigger.
My job is to figure out, most likely place and time when most of them will hit that "enter" button.
Discretionary? Yes...
I believe my brain is better equiped to recognise right time and place, then any EA.
Answer is psychology, not math.
It is my opinion, but it works for me, and thats........
  • #29
  • Oct 30, 2009 12:16pm Oct 30, 2009 12:16pm
Quoting ALThau
If I may,......
PA is a movement of the price, but you are right, it is how I feel about it.
I don't see this as a bad thing though.
In my minds eye, I see traders worldwide ready to pull the trigger.
My job is to figure out, most likely place and time when most of them will hit that "enter" button.
Discretionary? Yes...
I believe my brain is better equiped to recognise right time and place, then any EA.
Answer is psychology, not math.
It is my opinion, but it works for me, and thats........
its not a bad thing... a bad this is saying doing this is a surefire way to blow your account... being directed towards a style its like saying my martial art is better then yours so you fight to ko to see whose better but in the end the martial art is a martial art and the person who one has just practiced his longer and is more skillful. Discretionary is awesome ... Im a numbers guy i run numbers like numbers and trade random numbers all day long is it any better ? no not really.
  • #30
  • Oct 30, 2009 12:20pm Oct 30, 2009 12:20pm
Quoting domino
its not a bad thing... a bad this is saying doing this is a surefire way to blow your account... being directed towards a style its like saying my martial art is better then yours so you fight to ko to see whose better but in the end the martial art is a martial art and the person who one has just practiced his longer and is more skillful. Discretionary is awesome ... Im a numbers guy i run numbers like numbers and trade random numbers all day long is it any better ? no not really.
I think you can see the wrong wording in the title itself "what has worked through the test of time" as if there is one mystical answer the answer is money management and discipline .. I can trade coin flips and make money im sure with great MM and discipline unfortunately not much is discussed about Money management and exit tactics.
  • #31
  • Oct 30, 2009 12:23pm Oct 30, 2009 12:23pm
Quoting domino
its not a bad thing... is it any better ? no not really.
Yep, good point.
To each it's own. Whatever works.
And whether or not it works, is whats important.
  • #32
  • Oct 30, 2009 12:40pm Oct 30, 2009 12:40pm
Domino,

I'm overwhelmed by your sinicism. I'm sorry you have taken such great energy to denounce or minimize what most consider a legitimate from of speculation.

But to clarify a couple of things. You are quite correct, price action, IS price chart and learning to understand the "randomness" that come in this chart is extremely difficult but abundandly simple.

Your revelation that the submitted chart was random only supports this fact. Price action is random but our ability to interpret that randomess can allow us to make decisions that are right more often than they are worng. Assuming that you make more money each time you right, is what those inclined toward math call, an "edge". But often this assumtion is misleading...that's a whole other topic.

A derivative of this math (probabilities) is commonly used in gambling. Where even though the outcome of a series of games are random, the use of a mathamatical "system" of probability combined with increasing a position size produces a "positive expectancy" out of random results.

These systems taken from this kind of gambling have at their core a finite number of possibilities. There are only 52 cards in any given deck. A roulette wheel only has a certain number of positions. A die has only six sides. Thus when calculating the probabilities there are a finite number of outcomes and one can justify placing a larger position (bet size) knowing that the mathematical probability of loss is smaller.

This is not so with the markets. At any give moment there are an INfinite number of possiblities. Quantifying how many traders may be using what ever different methods or "systems" to speculate the market is daunting at best and I dare say next to impossible. With each trade the probability of win or loss is the same....50/50. It is only YOU the trader using your skill that improves those odds. Thus you cannot say that I lost 3 times already, the next trade has a higher probability of success.

Learning to interpret price action IS descretionary at best. In some cases even intuitive. This doesn't match will with logical or statistical probabilities in an never ending equation. Thus descretionary trading is never 100% correct...but then again neither are the mathematical models. Thus those that engage in descretionary trading often begin to doubt their skill when faced with a series of losing trades making them insecure. They will often seek refuge from their insecurity by turning to "pure logic" in an arena that is anything BUT logical. True mathematical models are successful for a period of time, but not 100%...thus, one must know WHEN to use them, and thus must once again rely on their descretion and perhaps listen to their intuition to make that call.

Price chart interpretation has long survived math models and I say again, is "what really works though the test of time" as the originator of this thread originally asked.
  • #33
  • Oct 30, 2009 1:19pm Oct 30, 2009 1:19pm
what really works through test of time ?

I would say judgment. Everybody reads the same fundamentals reports and sees the same support and resistance lines. Those that make money are the ones making sound judgments. ( I am talking about facts and figures here, not some analyst opinions on TV or newspaper. )

The other key I believe is having a plan B.

regards
  • #34
  • Oct 30, 2009 1:20pm Oct 30, 2009 1:20pm
Good explanations and insight, gspajon.

Have a great weekend everyone!
  • #35
  • Oct 30, 2009 1:43pm Oct 30, 2009 1:43pm
Quoting gspajon
Domino,

I'm overwhelmed by your sinicism.
your overwhelmed by my chinese characteristics??? what does that mean...
Quote
I'm sorry you have taken such great energy to denounce or minimize what most consider a legitimate from of speculation.

denounce what PA.. im not denouncing anything im just saying when you guys say pa your talking in circles... acting guruish since all things are PA... im cool with all trading styles you are the one who wanted to talk crap on grid and martingale and wanted to decode a random chart by the way prop to xaron for calling it meaningless lol.

Quote
But to clarify a couple of things. You are quite correct, price action, IS price chart and learning to understand the "randomness" that come in this chart is extremely difficult but abundandly simple.
no you decoded a randomly generated computer chart that had nothing to do with any buyers or sellers just a computer outputting random numbers..
Quote
Your revelation that the submitted chart was random only supports this fact. Price action is random but our ability to interpret that randomess can allow us to make decisions that are right more often than they are worng. Assuming that you make more money each time you right, is what those inclined toward math call, an "edge". But often this assumtion is misleading...that's a whole other topic.
no decision made from that chart could be more right or wrong at any point its random... completely random.. no human intervention at least in a real market you would have a point but the fact you are stating that understanding this chart has none and thus nothing to decode... it makes no sense.
Quote
A derivative of this math (probabilities) is commonly used in gambling....
you should probably lookup understanding intersections of probabilities... and it sound like you never took the time to understand statistics. and there is only two outcomes up and down.. its not rocket science.
Quote
Learning to interpret price action IS descretionary at best....
no it hasnt mathematics is slowly killing that ... there are tons of algorythms and mathematical models analyzing every second of this market compiling data ... aparently you missed the forbes article with the microscalpers using computers to place orders and never even seeing the pattern scalping small fractional moves... moving markets and walking with tons of money... then again it does work cause you cant do it right?
  • #36
  • Oct 30, 2009 1:46pm Oct 30, 2009 1:46pm
...what really works through test of time is staring at charts almost all the time and getting an intuitive feel, which the 95% crowd is unwilling or unable to do.
  • #37
  • Oct 30, 2009 2:08pm Oct 30, 2009 2:08pm
You beat me too it. Totally agree.
Quoting fxterrapin
...what really works through test of time is staring at charts almost all the time and getting an intuitive feel, which the 95% crowd is unwilling or unable to do.
"Every battle is won before it is ever fought." - Sun-tzu, The Art of War.
  • #38
  • Oct 31, 2009 1:21am Oct 31, 2009 1:21am
Quoting Razor_trader
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
True. At the end of the run of the MArtingale, all you have profited by is the initial variable. A terrrible risk for such a small reward
  • #39
  • Edited 7:41pm Nov 2, 2009 7:20pm | Edited 7:41pm
Quoting domino
I think you can see the wrong wording in the title itself "what has worked through the test of time" as if there is one mystical answer the answer is money management and discipline .. I can trade coin flips and make money im sure with great MM and discipline unfortunately not much is discussed about Money management and exit tactics.
Can you prove this?

The market doesn't care whether a small retail trader is entering or exiting. If (and I stress IF) price movement is too random for entry-based analysis to provide any kind of advantage, then surely it's equally random when the trader is making an exit. Hence no exit-based algorithm could provide an edge, for the same reason. Some more thoughts on exits here - the whole thread is worth a read, IMHO.

If MM and discipline are all that's required, then any EA is the perfect solution.

Quoting domino
true martingales realize their edge and their money management and how it works together…… curtis faith talks about edge from entry and exit and the strategies to buying and selling to create edges from randomness....
It's impossible to gain an edge from randomness.

No MM method, including Martingale, can improve expectancy - more here.
  • #40
  • Nov 2, 2009 7:52pm Nov 2, 2009 7:52pm
whole/half numbers work. as long as you can tell which way the market will be balanced statistically, (sorta like a "balance beam") then you can win more than you can loose. I just think after seeing so many indicators and live trading for only a year. a lot of them (not all) are way too slow for forex. they were made for the stock and commodities markets and that's where over 90% of these indicators out here should stay.

I guess if you can make them work, then great. but that special setting may not work forever and it most likely won't
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