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

  • #41
  • Nov 2, 2009 8:47pm Nov 2, 2009 8:47pm
Quoting hanover
It's impossible to gain an edge from randomness.
Yeah, whether your trading is discretionary, automated, fundamental, technical or a mutt - you're going to want to have a current assessment of Buyer/Seller dominance. Hopefully, not just at the current price level and hopefully based on what the market's telling you.

Save the darts for the bar.
  • #42
  • Nov 5, 2009 10:36am Nov 5, 2009 10:36am
Quoting hanover
Can you prove this?

No MM method, including Martingale, can improve expectancy - more here.
yes but I dont have the time to put it all into graphs and explain it out it would take a long time and I actually trade maybe I will some day
  • #43
  • Nov 5, 2009 11:18am Nov 5, 2009 11:18am
Quoting aiyahmarklah
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
I gave up on interpretation of fundamentals...."Smart money" do it for us...My job is to follow them ....Everyone can make money using MA and lets say fibo...In my opinion the most important things are discipline and money management.
The Market pays you to be disciplined
  • #44
  • Nov 5, 2009 11:26am Nov 5, 2009 11:26am
Quoting hanover
Can you prove this?


No MM method, including Martingale, can improve expectancy - more here.
MM and discipline can save you what you have...Trader is out of trading because s/he lost all what s/he had....not because s/he did not make enough for itself....Doesnt matter how much trader make...It matters how much trader lost....No money in account no trading.
The Market pays you to be disciplined
  • #45
  • Nov 5, 2009 11:52am Nov 5, 2009 11:52am
Quoting zarraman
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
how is that some time my MG trades can have risk rewards upto 10 times risk usually i protect my position at 1:1 and let the MG trade run highest I have is around 12.5 times risk lowest is breakeven.. i stop out maybe 5% of the trades made... MM is king... I cant say it enough TA will never help you ... fundies help a little 10%... stats and MM is king ...
  • #46
  • Nov 5, 2009 12:08pm Nov 5, 2009 12:08pm
Quoting mima
MM and discipline can save you what you have...Trader is out of trading because s/he lost all what s/he had....not because s/he did not make enough for itself....Doesnt matter how much trader make...It matters how much trader lost....No money in account no trading.
this is so true capital preservation MM is king...
Newbs come in with a strat and dont understand the simple concepts of ROR risk of RUIN .. they dont understand where true edge is from MM and skewing profits in a way that gives you edge they think entrance exit is edge... and thus they get burned cause they concentrate when and where to exit... In my world you can not predict the market only control your capital... create safe trading enviroment for myself and my account.. the longer i live the better my chance at profit... I know that over the past 5 years of my trading and over 20000+ trades later and staring at this screen everyday 10-14 hours a day for 7-8 years that i dont wanna pick directions I dont wanna be right ... I want my money to be safe I want it to work I want minimal draw downs and I know you cant time the market.
  • #47
  • Nov 5, 2009 12:42pm Nov 5, 2009 12:42pm
What makes a martingale strategy so difficult with forex is that you can't define a bottom where price will stop and turn around. If you trade E/U long martingale, where is the point that it will stop falling so that your trades will go into profit. There are markets out there with a defined bottom. Martingale works quite well in those markets.
  • #48
  • Nov 5, 2009 1:42pm Nov 5, 2009 1:42pm
Quoting deuce
What makes a martingale strategy so difficult with forex is that you can't define a bottom where price will stop and turn around. If you trade E/U long martingale, where is the point that it will stop falling so that your trades will go into profit. There are markets out there with a defined bottom. Martingale works quite well in those markets.
Absolutely there is no need to pick top or bottom of price action....Martingale? is that gambling?
The Market pays you to be disciplined
  • #49
  • Nov 5, 2009 2:06pm Nov 5, 2009 2:06pm
Quoting mima
Absolutely there is no need to pick top or bottom of price action....Martingale? is that gambling?


PA is an art that takes many hours of screen time to get a feel for. Some get it some don't. There are simpler ways to make money with low risk.

Martingale is only gambling when used in a market unsuitable for the strategy.
  • #50
  • Nov 5, 2009 10:39pm Nov 5, 2009 10:39pm
What works long term in Forex?

Most people would suggest indicator based systems. Look at the trading systems section it full of them. From simple MA based systems to systems with so many indicators you can barely see the charts.

Do you want to know the truth about indicator based systems? More often they are market condition specific. What I mean by that is they work in one type of market but not in another.

Most of the time this would be trending markets. Indicator based systems work amazingly well in trending markets. Not surprising really... the lagging indicator tells you to go long after the market starts moving in a bullish direction. Since it is a trending market when you go long it keeps moving in a bullish direction and you make pips.

But oh no wait! What about when the market changes from trending to ranging? That’s when most indicator based methods break down completely.

Before I go too far off topic let’s get back to the original question. What works long term? Price action based analysis is what works long term . Price action based analysis is applicable to all market conditions.

What Is Price Action Analysis?

Analysis that requires you to think about what’s happening with the market and how/why it moves.

- Support and resistance lines (the ones you place on your own)
- Trend lines
- Candlestick analysis

At the end of the day all these types of analysis require you to use your brain.... The problem is most newbie traders come to this market hoping to get rich quick. This is why you see a lot of no-thinking-needed indicator based methods flying around.

Oh and so there isn’t any mix up. When I say indicator based method I mean methods based entirely or mostly on indicators. I am not saying that you should never use indicators in any method of trading. I am just saying you shouldn’t use only or mostly indicators.
  • #51
  • Nov 7, 2009 9:18pm Nov 7, 2009 9:18pm
Quoting forex4noobs
What works long term in Forex?...
What is the difference between Support and resistance lines and Trend lines. How do you plot each of them. I agree with what you have said, but want to confirm that we are plotting the same lines.
  • #52
  • Nov 7, 2009 11:09pm Nov 7, 2009 11:09pm
Quoting Getrich Fast
Breakout is observation of price action. The price moves higher/lower compared to previous price.
Price is always breaking out. The only difference is where you place the lines.


Quoting Getrich Fast
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.
I concur.
  • #53
  • Nov 7, 2009 11:33pm Nov 7, 2009 11:33pm
May I add my 2 pips about price action?

Price action has to do with the movement of price (p) over time (t). If price does not change, there is no movement: p(t2) - p(t1) = 0. The idea that price moves sideways is incorrect. Price either increases ( moves up ) or decreases ( moves down ). Those are the only 2 ways price can move.

Many traders use bar or candle charts. If that is the case then when a candle closes and a new candle opens, price can only do one of the following: a) increase enough to rise above the previous bar's high, b) decrease enough to fall below the previous bar's low, c) do both a and b [called outside bar] or d) do neither a or b [called inside bar]. Those are the only actions price can make.

This is the crux of price action. You can not reduce it any further. It is complete. Nothing needs to be added otherwise it more complex than necessary.
  • #54
  • Nov 7, 2009 11:58pm Nov 7, 2009 11:58pm
Quoting hanover
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...

Yes, an edge can be gained from randomness. No one knows what will happen next in trading, it's a random event. Yes, we can acknowledge there are patterns that repeat, but they repeat "randomly". The way to gain the edge is to exploit the movement of price over time. There are "up days" and "down days". We don't know if tomorrow will be an "up day" or a "down day". If we are going to use a coin to decide which way to trade, the natural tendency would be to say, "heads go long and tails go short". That does not give us an edge. It would be better to say, "heads go long, tails do not trade". Why? If we "cut the losers quick and let the winners run", on up days, we will more than make up any loss on down days. If we forget the coin and only trade long, then we stand to win big and lose small.

http://i944.photobucket.com/albums/a...n/gbpusd-1.gif

Cutting the losers spared the pain of the big drops. Letting the winners run, more than made up for the small losses. But not switching sides, we prevent the possibility of always being on the losing side and gain the possibility of not letting the "big one" get away.
  • #55
  • Nov 8, 2009 1:17am Nov 8, 2009 1:17am
Fast,

As a professional trader pointed out, DIBS is not >50%; is under 40% success rate, but will make you money in the long run.

If you want a high hit rate, S&R is all you need.
  • #56
  • Nov 8, 2009 1:53am Nov 8, 2009 1:53am
not enough
  • #57
  • Nov 8, 2009 3:42am Nov 8, 2009 3:42am
Quoting hanover
It's impossible to gain an edge from randomness.
Hanover, I think you'll like this.

http://www.isigmasystems.com/implications.html

Of course the marking isn't a simply random walk like this, but I wish it were! Haha
  • #58
  • Nov 8, 2009 3:53am Nov 8, 2009 3:53am
s/r, trendlines, fibs, you need none of it really... its much simpler than that.. they are all really pointless.
  • #59
  • Nov 8, 2009 7:34am Nov 8, 2009 7:34am
Quoting domino
s/r, trendlines, fibs, you need none of it really... its much simpler than that.. they are all really pointless.
I tend to agree with you. Would you care to elaborate more on this?
  • #60
  • Nov 8, 2009 8:15am Nov 8, 2009 8:15am
I think it is just the trend which works..

Market goes up and down not in a linear fashion..so try to make some pips in up and down movement keeping the trend in mind.
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