Cant find a substantial edge!

I have read allot of your post over the last couple of yrs and you are a smart arse, but I like it. someone has to dehipnotize these people. lambs to the slaughter.....

Sadly that is true......as is the 'smart arse' remark!

Replied with a PM to you (didn't want my personal story public......)

I'm sure Mr T will be happy to help you with his edges...

1. you can enter and exit the market with one click of the mouse (the big boys cant)
2. no one made you take that trade
3. most retail traders are always 2-5 trades away from broke and very predictable ( big boys like to eat retail) hint.
4. your like a moped on the highway you can follow in traffic and get to where your going, when its jambed up you can get off at any time, go against the traffic you might miss some cars, but eventually a semi will hit you. (semis are the big boys and remember they cant do a uturn on a dime) and some times their smoke is thick.

Please read and reread my post. I just went to your profile and saw you were in the trading systems portion (now is that the place you should be?), I will never mentor anyone, not just because I dont want to, but because I am not a good communicator or teacher, The approach to the market has to be understood. I am not trying to say that you cant make a $$ every now and then in short term trading, but you most likely wont make it long term. And if you ever do make it in a short term trading style it will be after a certain level of savvy is achieved. My suggestion to you is fur-get-about short term trading and the $ you dream of making, because not only will you lose that money but you wont be making the money from the sweat of your brow. save all of that money you can and learn an approach such as james 16 or vsa or a simple trend approach, scale into it and be happy with small consistent returns. and let compounding do the rest. Maybe this will give you perspective, what do you need to live off of? Triple that before you start anything live. 1ST portion to live off of second and third portion to trade @ roughly 5-8% ror. should net you total of 60% worth of 2 yrs pay. that should replace your first yrs salary and sustain growth @ 20% anything above is gravy. To let compounding really take hold do not touch the money for 2yrs and get way out in front of your self. see why most retail dont make it.... work your self to death and learn on the side and trade as a result.

Mr-T,
I doubt that you are not a good teacher. Already, the bluntness of your paragraph shows that you are in fact a good communicator.
Really appreciate the response/advice. If by any chance you or a professional acquaintance of yours would like to help in this way please give me a ring.
Cheers,
Kostas

kostas, do this and ill check in on you from time to time. start a journal in that section on FF. Please dedicate this demo account to my approach and only my approach. It gets a little more complicated but here goes:

1. find a trending currency (needs to have at least 2 swing lows on an up trend and two swing highs on a downtrend) all this on the daily charts. connect with line (doesn't have to be exact)
2. subtract the difference between the trend line and the last swing high or low(even if that last swing dose not touch the TL) and add 1/2 the average daily range divide by 3.
3 first entry is @ or near the TL and is 44% of 3% of your account
4. second is right around half of the first current position last swing high or low and 33% of 3% of your account.
5. third position is right around the last swing high and 22% of 3% of your account
6. 4th area is your stop loss


these levels are all aprox, can use in conj. with fibs, ma, pivots, mid TL, etc.

its like Bruce lee said be like water conform to the market, your comfort comes from the large range you are with in. also the math and the money man are approx as well (just keep it all in check)

you may make money right off on your first entry(which is good) on your trade, but the real money comes when your second or third entry is hit and you ride the trend. so in essence you actually rote against yourself. always sell in to up pressure and buy into down pressure.

TAKE PROFIT. on this you can find what works best for you, but I try to take the third position @ the first entry and manage the second entry with the thirds profit to let the 1st entry and possibly the second run with the trend. very hard to explain but i will try to do more later.

This works in all markets (for now avoid ranging or large swings) I am sorry, but while there is pair correlations to verify and other things to know this is the basics and should let you scan for opportunities. It will keep you in the market more so be careful do not have more than one trade group at one time. In the time frames less than 1hr no one knows what is next with anything other than TA probabilities (ie. no long lasting certainty)

I have lurked here @ ff for a long time and spoke to myself answers to some of the post here. Now that i am posting i feel fragmented and unable to feel like i can convey what i know.

Mr-T,
I will gladly take the challenge, as soon as I make sure I understand your rules. Right now I am stuck at point 2.
I have found an uptrend on older EU data and connected the two swing lows with a line. Now for your point (2) I subtract the the difference between the trend line and the last swing high (1.4190-1.3816=374 pips) marked as the orange rectangle.
a) Which days should be used to calculate "add 1/2 the average daily range divide by 3"?
b) Let's say I used the ADR of the last 5 days during the second swing low (ADR of 127 pips), then I divide by three (42 pips) and add to the 374 pips (374+42=416 pips)? So what do I do with this number?
c) So first entry is at the third swing low?
d) lost it after that.....

That's as far as I can go.
Thanks for your time,
Kostas.

MrT Your input is invaluable and greatly appreciated. I have been trading similarly to this for the past week. Really simplifying my trading and going back to basics.Making sure i am with the larger trend and getting in on pullbacks.

Anyway thankyou for your advice- i think you are definately a better teacher than you give yourself credit. You are the first person on this thread to actually post some sort of definite edge without the usual cryptic fluff- (in my opinion).
Cheers mate .

I found this today and thought you may be interested:
http://www.forexfactory.com/showpost...0&postcount=12


@Dopey - Thanks for posting that link, it has led me to some very interesting nooks and crannies here at FF.

Thankyou LasVahGoose fantastic read. And this is the kind of mechanical edge that i was thinking about. However i imagine there are traders who trade in a more discretionary manner too. At the moment finding a mechanical edge for me seems unlikely. Too much time spent looking for something that has a statistical edge of over 50% but then may not last doesn't really seem the right way to go (for me) unless you are of the more mathematical mindset.

I am leaning towards keeping it more simple at the moment- looking for higher highs, higher lows and lower lows ,lower highs etc- Going with the larger trend and most importantly staying away from the lower time frames.

Also sometimes for entries i do like things like churn bars and high climax bars. (although i have not done a scientific study on it but at a glance high climax bars do seem to offer a high probability entry and also inside bars that are also high churn.
Cheers

The steps apply for discretionary trading as well. Even with discretionary trading you need to define what you are doing.

Yes -definately lasvahgoose.
I also like gastons reply in the same thread to topherhk88's excellent post.

Gaston:
The forex loser believes that everything you need is here at FF (or babypips). He believes that he can just plow through threads and get enough "opinions" about the market that he will be profitable. He thinks that because he read that a "trend is your friend", then went on to read Jacko's method or something, that he can now start retiring because it looks so easy. He also believes that if one system does not work, he can simply move on to another one. A loser believes that if he has been trading for 2 months and still has an account, he is being consistently profitable. A loser believes that back testing is a waste of time, or at most he will scroll back a few months and just eyeball his system. This is called shitty back testing. A loser believes that anyone can make it in forex.

Now, I know you don't want to hear all about losers. There are plenty of "Top Ten Reasons Losers Lose" threads. But I thought I would highlight some relevant reasons here. So anyway, how do you become a winner?

Again, Topher sheds some light on the importance of an edge. Now I know that "edge" is just another forex term thrown around, but what most traders do not understand is that your edge is the foundation of your system, and everything else is used to augment and exploit that edge. What you find on babypips and FF is the "everything else". Most of this "everything else" information fails to produce profits on its own because false edges are identified through self-fulfillment of these methods; but there is little, if any, edge behind them.

The reason edges are not found so easily on public forums is because a real edge would crumble if made public (assuming the readers were smart enough to use the edge given to them ). An edge is based on information that very few others know, but it can be implemented in a system that many others use. A breakout trader will use the same breakout formation that many others did, but his edge might keep him in long enough to make more profit, or it take him out before price turns around, or put him in the trade just a tad sooner, or identify a false breakout faster. Everyone saw the same formation and traded it. A handful got lucky, a few were successful.

You are fed up with all the "grail is in the mind" bullshit. This is because (or at least my theory) when a breakout pattern that everyone sees generates profit for only a few, it is easy for the system seller to say that, “the system is good (see I was profitable!), but it is YOU who sucks.” This is of course true, ie the trader probably does suck, but then again so does an edgeless system. A bad system will fail because it is bad, not because a weak trader traded it. A weak trader who trades a bad system will be forced to bend his discipline, and then be yelled at for breaking his rules. Hence the huge psychology movement in trading. Great psychological discipline and money management used on a bad system will only slow the bleed. You will ultimately fail if you are not exploiting a proven edge.

That being said, a trader does need to use his mind. I am a James16 member and my favorite section on that site is the psychology section. What I mean is, a good system will indeed fail if a weak trader trades it. A trader who finds, develops, back tests, and uses his own edge will trust it. A trader who trusts his system will be less prone to trade against it. This equals discipline.

So in search of the next step in your trading, I would recommend starting here. Look around at some traders who you deem successful, and try to identify what their edge is, or at least where it lies. Trend traders tend to find edges in their exits, while news traders find it in their entries. I personally exploit market inefficiencies through mispricing and crowd overreaction. Any successful trader should be able to tell you where his edge is = why his system works.

This is still no new information to you, I am sure. But again, this is what you get on a public forum. You get hints, pointers, suggestions, and vague concepts. There is great information on this site, but it is only the beginning. You need to be an expert in your field. This is why I do not trust someone who says trading is easy, and I hesitate when they claim it is simple. Keep it simple is a common phrase, but I believe it is misinterpreted. Many take the KISS concept and think that means they can be market morons, that they do not HAVE to know about price discovery, market participants, central bank interventions, orderflow, etc. True, they may make a little money without understanding why the market is moving, but how long do you think that will last. Talk to any trader who has made money consistently for over 10 years and they can tell you more about what influences the market than any website can. I strive to understand the complexities of trading. KISS can be applied to the system itself, meaning do not cloud your trading with so many rules and regulations that you only get one signal a year. However, KISS is by no means an excuse to be ignorant and lazy about this profession you have decided uptake. If reading a 650 page book on market microstructure seems too daunting and boring to the pursuit of success, maybe you need to reconsider why you are here in the first place.

With all of that being said, one possible route for you to take is to stop reading, get away from this website, and just trade for a while. Another component of success is experience. When you wake up in the morning and turn on your computer, where do you go first? The chart? Or this website? If you are trading from a chart (most, here do), then allow the chart to be your primary influence, not this website. Open the chart and interpret the data BEFORE jumping on the net to see what is going on. How many years have you been lurking around this site? Of that time, how many trades have you actually taken? You can still take trades without a system (demoing of course), but just get in the habit of making decisions about price movement, then track those decisions and the outcomes that occurred. Chart time is valuable, and you must manage your time to incorporate that.

I was just going over this thread and somehow missed the link Dopey posted

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

Thanks dopey one of the best posts - if only he posted more often as his posts are very insightful. He really articulates his points brilliantly.

FF is great....always guaranteed entertainment!

care to elaborate pipmutt?

Oh preconceptions, misconceptions, convoluted ideas and over-analysis.....

There's more than one way to skin a banana, no-one has the monopoly on profitable trading ideas or approaches.

I just find it amusing to watch people jumping through hoops

Definitely true pipmutt
cheers.

Like i said a smart arse!!!!!!!

I do not claim to have the only approach. I trade with several fellas and one lady and all of them have diff. styles, so for me to say that I have the only way is not true. My approach does let ANYONE make it in the market and if you have an account large enough and can live with proper expectations (not this 30-100% bullshit) month after month. will you have a 30% month? hope so because you might have a -5% month some where down the road. If you live by that ramp up high test high return attitude, you will die by that same sword. its just a matter of time.

What i am trying to say is that the EDGE all of you seek is useless if you 1. never make it long enough to find it (because the only short term edge is a market inefficiency. The TA probabilities is not an edge long term period and so what you are profitable this yr and last yr what about 5yrs 10 yrs. (dont fool your self) 2. once you find it, aren't savvy enough to keep it. 3. miss the basic principles of Markets. Study a trend and why a trend is a trend and the mathematical physics and emotional physics that are behind them and the energy it takes to reverse them.

I actually know of a true market inefficiency that my dad trades from time to time. I do not trade it!!! why? because my personality wont let me stalk it, raise my awareness to that level and maintain it long enough to capitalize. Believe that or not i simply do not care, but A man has to know his limitations. A cheetah can run 60-70 mph, but for how long?


one thing i will agree with the proprietary info and market savvy is crucial to filtering trades and having discretionary trading. This is the reason not everyone will make it. but if you keep it simple and give yourself the tricks of the trade (ie) mind games and emotional control you have a CHANCE.
play the game of Ta probability and some system's back test results, even if the system works long term (highly unlikely) you will be long gone.

I'm glad you like the posts and I hope you find what you are looking for as well.

Trade Well.