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Cant find a substantial edge!

  • #41
  • Feb 26, 2010 4:09am Feb 26, 2010 4:09am
Alot of the time i feel like being successful in forex is like climbing a mountain. You see what you think is the top- you get there only to find another hill in front of you. I just wonder how many people here are actually at the top or are we all still in the foothills believing we are nearly at the summit!!
  • #42
  • Feb 26, 2010 7:04am Feb 26, 2010 7:04am
Imo, the hardest thing to do in trading is to see the market.

This is, imo, one of the best posts on FF.

http://www.forexfactory.com/showthread.php?t=67217

People like to argue for their points of views about the markets and how to trade them. Most of them are probably right to one degree or another. I'd say there are very, very few absolutes in trading, yet if you read these boards, so much info is presented as absolutes. Why this is done is of no concern to us, it's enough to know that it is done.

Trading is very much a zen thing.
  • #43
  • Feb 26, 2010 7:04am Feb 26, 2010 7:04am
Hi Abritton,
I think we are in the same boat. I have been trading for about 1 year now and am still not profitable. There are so many systems, the beginner trader can think that the problem is with the system, but probably this isn't the truth. I think the main point is the price action around your technical levels. This isn't easy to decide where the price will go from the price action and that's why you need many time to overcome it. It was just the entry point, you need to know when you will exit from your trade. If one trader knows from the PA that the entry point was bad, this trader can be successfull, because he will cut his loss. This isn't too easy, i think.
And there are the others: psychology, money management, etc...

So you are not alone with your struggle.

Sorry for my bad English..



Brian
  • #44
  • Feb 26, 2010 1:45pm Feb 26, 2010 1:45pm
Quoting Dopey
Imo, the hardest thing to do in trading is to see the market.

This is, imo, one of the best posts on FF....
Very, very profound, IMO. Great post.
  • #45
  • Feb 26, 2010 2:12pm Feb 26, 2010 2:12pm
Quoting Dopey

Trading is very much a zen thing.
Care to expand on that opinion?
  • #46
  • Feb 26, 2010 3:11pm Feb 26, 2010 3:11pm
The best edge is timing, regardless of any strategy you might think of.
A very good entry on the market is extremely rewarding as far as I've noticed. Beware of slippage and volatility, that might kill a good setup or idea.
Hope it helps.
  • #47
  • Feb 26, 2010 3:43pm Feb 26, 2010 3:43pm
Quoting pipmutt
Care to expand on that opinion?
I tried to write a thoughtful answer. It's too hard for some reason for me to clearly articulate my beliefs about this. The one phrase that is stuck in my head is, You have to let go of your attachment to all of it. Only then does it become possible to see the market and what it's doing at any given moment. And I don't mean to look and predict, but simply to look and see.

That's probably as clear as mud, but I can't find a way to say it any clearer.
  • #48
  • Feb 26, 2010 5:35pm Feb 26, 2010 5:35pm
i love threads like this, hats off to everyone who helped so kindly and without hesitation.. tons to learn no matter our experience
  • #49
  • Feb 26, 2010 7:24pm Feb 26, 2010 7:24pm
Quoting abritton76
Hi supremechaos thanks for your reply...
Trading is ok.
Not consistent yet (it says beside my avatar "borderline yahoo & oh-no"); im in the middle (or near the end) of a psychological & physiological 'war'. without going into details (personal stuff), i believe i have experienced a 'perfect storm' very few traders, imho, would have experienced.

again, in general, for all traders, imho,
the minor battle is the learning curve (& time spent in learning),
& the major battle is psychology (inside your head: how u handle things & how u think)
  • #50
  • Feb 26, 2010 7:31pm Feb 26, 2010 7:31pm
Quoting pipmutt
Care to expand on that opinion?
Quoting Dopey
I tried to write a thoughtful answer. It's too hard for some reason for me to clearly articulate my beliefs about this. The one phrase that is stuck in my head is, You have to let go of your attachment to all of it. Only then does it become possible to see the market and what it's doing at any given moment. And I don't mean to look and predict, but simply to look and see.
That's probably as clear as mud, but I can't find a way to say it any clearer.
indeed it is sometimes hard to articulate certain thoughts.

i'll try to 'interpret' what Sir Dopey is trying to say using these short words/phrases:
(something similar to) meditation [having a clear mind with only the market in your head];
detachment (from the 'noise');
insulate but dont isolate;
concentrate. focus. look & see. feel the market

Hope this makes sense. (& hopefully it's related to Sir Dopey's thoughts)
  • #51
  • Feb 27, 2010 1:49am Feb 27, 2010 1:49am
Guys thanks so much for all the anawers! All very thought provoking.
I wanted to ask some of you who have quite a bit of experience what you think about market makers.
I am currently reading "Taking a Professional Approach to Trading & Investing by using Volume Spread Analysis" Its exactly the kind of thing i want to know- Who is moving the market- when and why, the underlying dynamics of the market."
This is what i consider to be most important. But is it really possible that these "Professionals can really move the market to such a degree? VSA is meant to work on all timeframes which implies if you were looking at a daily chart that they could move it 100's of pips which seems unlikely. I am aware also that "Taking a Professional Approach to Trading & Investing by using Volume Spread Analysis" is also trying to sell there TRADEGUIDER system so it does set off some alarm bells.
What do you guys think (Supremechaos i believe you have an interest in ths area right?)
Otherwise do u think we need level II data to confirm weather the S & R levels will hold? If we could see the white areas beyond the level (the ladder) I.e whether there were orders above or below the level then surely this would be very useful.
I know we cant get our hands on level ii data as its not centralized but what about using options??
Would love to hear what you guys think - i know you have been in discussions about this kind of thing a long time ago - just wondering what your thoughts are now.
  • #52
  • Feb 27, 2010 2:13am Feb 27, 2010 2:13am
Quoting Dopey
I tried to write a thoughtful answer. It's too hard for some reason for me to clearly articulate my beliefs about this. The one phrase that is stuck in my head is, You have to let go of your attachment to all of it. Only then does it become possible to see the market and what it's doing at any given moment. And I don't mean to look and predict, but simply to look and see.

That's probably as clear as mud, but I can't find a way to say it any clearer.
Quoting supremeChaos
indeed it is sometimes hard to articulate certain thoughts.

i'll try to 'interpret' what Sir Dopey is trying to say using these short words/phrases:
(something similar to) meditation [having a clear mind with only the market in your head];
detachment (from the 'noise');
insulate but dont isolate;
concentrate. focus. look & see. feel the market

Hope this makes sense. (& hopefully it's related to Sir Dopey's thoughts)

In other words 'trade what you see'?
  • #53
  • Feb 27, 2010 2:16am Feb 27, 2010 2:16am
Quoting abritton76
Otherwise do u think we need level II data to confirm weather the S & R levels will hold? If we could see the white areas beyond the level (the ladder) I.e whether there were orders above or below the level then surely this would be very useful.
Whose data are you seeing though, your brokers, their liquidity provider's?

It's a waste of time in my opinion, I've never seen that data used effectively because it's pretty meaningless and never shows the whole picture.
  • #54
  • Feb 27, 2010 3:19am Feb 27, 2010 3:19am
Yeah pipmutt thats kind of what i thought. Whats your opinion on market makers - specifically regarding forex.
  • #55
  • Feb 27, 2010 3:26am Feb 27, 2010 3:26am
Also Pipmutt something from Darkstar a long time ago which you have probably read -


"To trade order flow you need data from outside the chart. Level 2, a brokers orderbook, a service that gives you info about brokers orderbooks, etc. There is a fuckton of money to be made from orderflow trading if you know what your doing, but you need the datafeed.

And no, I won't tell you where to get a datafeed. Some things are better off not being shared."
  • #56
  • Feb 27, 2010 4:06am Feb 27, 2010 4:06am
Quoting abritton76
Also Pipmutt something from Darkstar a long time ago which you have probably read -


"To trade order flow you need data from outside the chart. Level 2, a brokers orderbook, a service that gives you info about brokers orderbooks, etc. There is a fuckton of money to be made from orderflow trading if you know what your doing, but you need the datafeed.

And no, I won't tell you where to get a datafeed. Some things are better off not being shared."
Excuse me for being skeptical but that sounds like a crock, "I could tell you but I won't", lol

I believe the nature of the market makes it necessary for players (banks, financial institutions) to be secretive, showing their intentions would be self-defeating. Some levels seem obvious (big figures, support/resistance, stops) but then how reliable are they? Bluffs and double bluffs, spin and more spin.....how can we reliably risk money on that? And that's why, in my opinion and experience, the only thing to trade is what is actually happening, price can't lie. If we accept that the future is unpredictable with any certainty then we have no choice but to trade the market as if it were random because for our purpose it is. What does that leave us with? A risk, a gamble to a certain extent, based on probability. If we cut the risk short when we're wrong and exploit the market when we're right then the end result should be profit. If we understand that simple concept then strategy becomes about the least important aspect of trading, whether it's MA's crossing, breakouts, support/resistance, moon cycles, it all means diddly.

As far as market makers, NDD's, ECN's, bucketshops, I really don't think it matters as long as you pick a mainstream broker, there are pros and cons to all of them. They shade price, quote according to their book and the underlying market, and skew in their favor but that doesn't mean they're out to get us and our money! If you're concerned then trade futures or another non OTC market, they're all tradeable using the same basic principles.
  • #57
  • Feb 27, 2010 4:33am Feb 27, 2010 4:33am
Hi pipmutt thanks for your reply.
I dont realy wont to get into whether or not markets are random or not ( i believe though in treating them as random we are losing any edge we could get- they may appear random but i would say they certainly are not. I firmly believe any who thinks so will never consistently profit in trading)

Also when i am talking about market makers i am not talking about brokers. I am referring to (as referred to in the book "master the markets") the professional traders i.e private syndicates than can move huge blocks.

Who else around here uses VSA?? I know there are threads on this matter too, just curious. To me this seems to make more sense than anything else i have come across.
Cheers
  • #58
  • Feb 27, 2010 5:36am Feb 27, 2010 5:36am
Quoting abritton76
Hi pipmutt thanks for your reply.
I dont realy wont to get into whether or not markets are random or not ( i believe though in treating them as random we are losing any edge we could get- they may appear random but i would say they certainly are not. I firmly believe any who thinks so will never consistently profit in trading)
I agree, I don't think they're random either, but they're not reliably predictable enough therefore we need to treat them as random when we make a trade (manage risk). If they were reliably predictable we'd all bet the farm and be millionaires overnight!

Your edge isn't whether the market is predictable or not, your edge is how you manage risk and what you do with a trade once you're in it.
  • #59
  • Feb 27, 2010 5:55am Feb 27, 2010 5:55am
I don't really consider that an edge.
I do think certain elements are predictable and i don't think everyone would be doing this as they take a lot of understanding of market structure to see them but a simple predictable edge is High volatility following low volatility i.e breakouts.
Whether they are reliably predictably enough to bet the house on- of course not but they dont need to be.Just have a slight edge- betting your house would be some crazy Risk management however sure you were
Money management is not an edge in itself and wont make you money without one. Cutting losses while letting winners run is not an edge .
  • #60
  • Feb 27, 2010 6:28am Feb 27, 2010 6:28am
Quoting abritton76
I don't really consider that an edge.
I do think certain elements are predictable and i don't think everyone would be doing this as they take a lot of understanding of market structure to see them but a simple predictable edge is High volatility following low volatility i.e breakouts.
Whether they are reliably predictably enough to bet the house on- of course not but they dont need to be.Just have a slight edge- betting your house would be some crazy Risk management however sure you were
Money management is not an edge in itself and wont make...
You're still talking about probabilities though, not certainties.

Why do you think some people can make some of the strangest strategies work for them? Earlier in the thread you dismissed several workable strategies which have proven profitable for the authors, what does that tell you?

You don't need any convoluted strategy, deep understanding, or specialist knowledge to trade profitably, just some very basic principles, common sense, and discipline. The majority fail because they spend too much energy and focus on discovering/developing a strategy which will predict direction, much the same as you're doing. Eventually the penny drops and they realize consistently profitable trading has very little to do with strategy.
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