On the topic of BS in trading forums...

Nod. I suppose it probably is, at that.

It really doesn't matter, since even when a person is handed a winning method, chances are, they won't follow it and still lose. Only a handful of people would be able to take advantage of the opportunity. So, it's pretty much a moot point. Heck, there are several methods right here at FF to make one wealthy beyond their dreams (Gold laying Goose completely available to anyone that wants it). Naturally, there are 'other' factors that would prevent one from achieving their trading dreams...



EDIT: Nothing will beat being able to build your method and trading style, so build your own gold laying goose.

Thanks for all the replies. I didn't have time to post more than a summary, so there are a lot of sentences that should perhaps begin "In general, and everything else being equal, ......". There's more detail in some of the links that I posted.

Obviously it's up to each individual to interpret and use the info as he sees fit. Some concepts (e.g. what constitutes 'early' and 'late' entries into a move) are necessarily going to be interpreted differently by different people.

But therein lies the problem - many people (I'd argue the majority) aren't accustomed to thinking for themselves. While you may agree that much of it was generalising to be brief and could be heavily expanded, I'm sure many people took your post for only what it stated, rather than taking the concepts into consideration.

.7*.7= 4.9

Not that it invalidates your point...

Great post/thread hanover. Much wisdom in those words.

.7 *7.0 =4.9

.7 * .7 =.49

just clearing
V

Congratulations on reaching this realisation so soon in you trading career, Hanover

The post below by LVG sums up the truth of the matter very well indeed.

Kind regards,

O N D

[quote]

Did you use a calculator to get that answer? If so, buy a new one

Hanover makes a lot of great points, excellent post

LOL. As has been pointed out, .7 * .7 = .49, not 4.9.

Multiply any two real numbers less than 1 and greater than 0 and you will get a number greater than 0 but less than 1.
The resultant product will always be less than the initial two numbers.

This is important to realize when working with indicators and expectancies. Better results often comes with less, rather
than more, for basically two reasons. Above is the first one, the law of large numbers is the second.

This is why adding a filter, even a filter with an edge, often times makes the resultant system worse. This is usually true,
unless you're working across trading categories. For instance: adding fundamental factors into a technical counter trading
system, adding momentum factors into a trend system, adding trend factors into a counter-trend system, etc.

Note to self: If your going to be a smartass, make sure you check your facts.

hey hannover......... round here we would call that post 'taking the bull by the horns'...... ride'em cowboy......

//----

learn't long ago that even if you can hang on for 8 seconds, you still take a beating..... so tend to keep my opinions to myself.....

with some reluctance i might mention, there are quite a few ff members that a very high signal to noise ratio..... at least in my mind......h

or edit the post quickly before anyone quotes you

Lots of us have done it lol.

Price action is as close to order flow we have. It doesn't lag nor lie. Couple that with understanding of trends, whether short or long term (i.e. lower lows, higher highs) a trader would have it made in the shade.

Indicators are great when a trader truly knows how to uses 'em. Lets face it, most trades believe this line crosses with that line is an entry. I'll go back to what someone has said earlier about MACD being momentum based. I use MACD on the higher timeframes to help me identify price momentum and trend. I talked about it in another thread. http://www.forexfactory.com/showpost...33&postcount=7

With indicators such as Stochastics, if a trader knows anything about trading higher highs or lower lows, they will be able to use stoch (5,2,2) to find exhaustion/reversals in price.

If you look at price and identify lower lows (trend) and use stoch to, trading only in the direction of the trend, a trader could follow the trend, exit on retrace, and reenter/reload short position upon watching stoch fall again.

Traders need to learn how to properly use indies. If you follow the "traditional" way of using stoch, a trader would be losing money left & right.

EXCELLENT post hanover, from so many perspectives. One for my reference file... thanks.

Hey, do I get some credit for inspiring this thread? Forex Trading for a living..anyone?

Well put, this should be the first thread any prospective trader reads.

all in good spirit...


V

Good post with much I agree with you about. Here are some thoughts obviously addressing perceived weaknesses in the first post and ignoring areas where I largely agree.

1. Re independence of indicators. Obviously if they have the same inputs then they can't be independent. But given that some only use C; some use an average; and some process for the relationship of C to OHL etc then they can have a degree of independence. Hence, a stoch or williams %R can contribute something to a trend measure such as a MA.

1b. This is the equivalent in an indicator world of PA at S&R. Both are price based but the sum is greater than 1. An important and profitable class.

2. Entries also combine the two with a pullback to some definition of value and then a pa pattern to determine probable restart of the prior move.

3. Scaling in and out can be treated as multiple systems with those scaling entries and exits. If you think of them in this mode they provide the opportunity to smooth your equity curve. That smoothing is why they are attractive to discretionary traders.

4. Martingale is based on the theory of runs. If the theory applies to your trading then it could be worth while. If it doesn't obviously it isn't. Many traders over a number of years develop the ability to identify A++ setups as opposed to A setups. This provides an opportunity to bet more heavily on A++.

5. Agreed re psych not providing an edge - its primary function is as an enabler to help people with the issue of reliably executing their edges should they have found one or more.

6. I think your summary of what works misses things that can work for some traders and also your focus on independence of contributors to your ultimate edge is slightly exaggerated. They don't have to be fully independent ... they may overlap ... but they must each contribute something (or they can be discarded).

Totally agree with that.

One point though. You use the misleading term "self-fulfilling prophecy" which is often used disparagingly. First, most of these things are absolutely NOT self-fulfilling; they rely on others to fulfill them. Second, markets generally move for fundamental reasons or psychological reasons (interactions between the people and computers playing in response to what the markets are doing), and these sfp's generally fall into the second category - they are movements generated in response to what the market is doing and a traders ability to map the probabilities involved in them and respond to them is a source of profit to many - and not to be disparaged.

l



Second, markets generally move for fundamental reasons or psychological reasons (interactions between the people and computers playing in response to what the markets are doing), and these sfp's generally fall into the second category - they are movements generated in response to what the market is doing and a traders ability to map the probabilities involved in them and respond to them is a source of profit to many - and not to be disparaged. [/quote]

but if the market is moving due to fundemental or psychological reasons doesnt this mean you can find an edge in fundementals and or pyschology ?

regards damien

Which is why category #4 (from me, at least) is fundamental.