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Trading Differently

  • #1
  • First Post: Jun 20, 2010 8:34pm Jun 20, 2010 8:34pm
I would like to get some opinion of trading different. I think that one can not make money in forex by doing the same thing as everyone else. I also think that just being a retail forex trading you are already starting at a disadvantage.


My questions range from different types. Some being stupid. will only post two for now.


 

  1. Should you be working on a system that is like no other? Should you be trading a system that does not even come close to another system?




2. Can you find a system that is really bad and trade it in reverse? (To Some Degree)

What I have noticed over the past couple of years is that really good systems don't seem to become to public. Once it is widely known and widely used that it could no longer work.




My system was devolved by realizing that I had to change my thought process of trading. That what I was doing and thinking was not working. The questions I wrote above are very simplified to what I have studied. Because going into to much detail would just throw people off.


Opinions appreciated.

  • #2
  • Jun 21, 2010 5:39am Jun 21, 2010 5:39am
Quoting naddix
I would like to get some opinion of trading different. I think that one can not make money in forex by doing the same thing as everyone else. I also think that just being a retail forex trading you are already starting at a disadvantage.


My questions range from different types. Some being stupid. will only post two for now.


 

  1. Should you be working on a system that is like no other? Should you be trading a system that does not even come close to another system?



2. Can you find a system that is really bad and trade...

1/ You don't have to reinvent the wheel, consider yourself like those little fish that swim along with sharks. What to the retail trader is a great income is to banks petty cash. Go along with the flow, keep your stops large to avoid noise and don't risk much on any trade.

2/ I don't think it is as simple as reversing a system but if you look for example at Oandas open positions it is often a good idea (imo) to trade against the majority.

The main "flaw" with my system is me, I still tend to over trade at times.
  • #3
  • Jun 21, 2010 6:04am Jun 21, 2010 6:04am
HI, after reading your post l recall thinking something similar a few years ago. Lets break this down into what is really going on

1. 2 parties at play here, Instutions ( market makers ) and retail ( me and you)

2. They have to trap you in the market and take the otherside of your trade to fill their massive orders. Counter party to retail if you like

3. So, simply put, you want to join them and be on the rightside, yes?

The GOOD thing here is, IT CAN'T BE DISGUISED IN THE BARS, or price configurations as l like to term it. So what does it look like on a chart when the otherside is taken? ENGUILFING PATTERNS


Only the instutions have enough volume to produce these patterns, its simply when they take the otherside of retail therefore the only consistant winning formulae, imo, is to follow enguilfed money and trapped money


Retail get trappped, enguilfed by instutions and the market moves like all hell


So, study enguilfing patterns is the best advice l can give you


Will give you a couple of examples of a pattern l trade often and it works on any pair, any tf so you have a system already with this one pattern


http://img4up.com/images/08603556761533712795.gif

http://img4up.com/images/92988780528665267245.gif


Ok, the trap was set, made it look bearish, then otherside taken and the ATM is open. So, l never trust it how it appears, only trust it if it gets enguilfed the OTHERWAY, the traps come in various shapes. Hope this makes sense and l don't need any complicated indicators or flashing blue and green arrows and moving lines to trade, follow the enguilfing patterns and use other indicators and references like pivots or divergence if you like, but there it is, hidden in plain view


Kind regards


Red
  • #4
  • Jun 21, 2010 9:48am Jun 21, 2010 9:48am
Here is an entry based on an enguilfing whipsaw pattern


http://img4up.com/images/08176117003857951274.gif


Low risk and its got potential, lets see how it goes


Kind regards



Red
  • #5
  • Jun 21, 2010 10:02am Jun 21, 2010 10:02am
TG1 reached, 2/3 of short position closed, leaving 1/3 in and stop in original position


http://img4up.com/images/31359837046715040913.gif


Red
  • #6
  • Jun 21, 2010 10:31am Jun 21, 2010 10:31am
Quoting redsword11
HI, after reading your post l recall thinking something similar a few years ago. Lets break this down into what is really going on

1. 2 parties at play here, Instutions ( market makers ) and retail ( me and you)

2. They have to trap you in the market and take the otherside of your trade to fill their massive orders. Counter party to retail if you like

3. So, simply put, you want to join them and be on the rightside, yes?

Kind regards

Red
If you were trading in a closed system, like at a casino, and you were the only trader, the perception you have would probably be valid. But you're not just trading against your broker - you're trading both with and against all other traders, most of whom have a heck of a lot more money invested than your broker. (Spot Forex isn't the closed system many think it is - the rates provided by your broker come from a variety of banks).

If you think your broker is out to get you, you should bring up charts from two or three different sources - the one from your broker and one or two free chart services such as those from Daily FX.

Compare your charts to theirs. If your charts go up 50 pips, while theirs go down 50 pips, then your broker is screwing with you. Otherwise, the problem is with your approach.

Rob
  • #7
  • Jun 21, 2010 10:37am Jun 21, 2010 10:37am
l have the tools l need


Thanks


Red
  • #8
  • Jun 21, 2010 11:34am Jun 21, 2010 11:34am
http://img4up.com/images/16010676939246724143.gif



Red
  • #9
  • Jun 21, 2010 1:16pm Jun 21, 2010 1:16pm
Quoting Rob Mondave

Compare your charts to theirs. If your charts go up 50 pips, while theirs go down 50 pips, then your broker is screwing with you.

Rob
Here, here, yes it is as simple as that - it's obvious is it not? The other problem you need to look out for is slippage of more than 5 pips and a delay of more than 5 seconds, to me that is obviously a poor broker, but normally you should nearly always expect near instant execution except for news times.
  • #10
  • Jun 21, 2010 2:22pm Jun 21, 2010 2:22pm
Closed this short near tg2


http://img4up.com/images/61539241032690655851.gif


A simple trading plan without all the the noise, hype and the rest of the junk out there. Simple pattern developed, clear entry and defined stop above the pattern and demand zone below, done


Kind regards


Red
  • #11
  • Jun 21, 2010 4:06pm Jun 21, 2010 4:06pm
who says the market makers are working alone? dont you think they all work together for the same goal? also good trades red congrats

regards damien
i pull the trigger when others are fearful---me
  • #12
  • Jun 21, 2010 4:31pm Jun 21, 2010 4:31pm
My personal trading method is not to reverse another's system but to watch for momentum. After a nice momentum burst then I start looking for the signs of a reversal. This lets me set tight stops. I rather not look to join the trend but to take some junks out of retraces or reversals. For me this fits my habits. For some reason believe it or not I feel Like im in more control of my trade. I have better judgment. theres a lot more to it then just what I said but the reson I ask the main two questions was for the purpose of logic.

Quoting Marrethiel
1/ You don't have to reinvent the wheel, consider yourself like those little fish that swim along with sharks. What to the retail trader is a great income is to banks petty cash. Go along with the flow, keep your stops large to avoid noise and don't risk much on any trade.

2/ I don't think it is as simple as reversing a system but if you look for example at Oandas open positions it is often a good idea (imo) to trade against the majority.

The main "flaw" with my system is me, I still tend to over trade at times.
  • #13
  • Edited 5:16pm Jun 21, 2010 4:43pm | Edited 5:16pm
Wonderfully put. i agree very much. Simple! Cut out all the crap. Thats about how I trade. i think a lot of people ignore that it can be simple. Most people and like I was will not allow losses. As soon as they get a few there onto another system. I got sick of everything out there and decided to make my own based on the reversing of momentum getters. I like to watch the rhythm of the market when things start changing. There seems to be patterns behind it.

Quoting redsword11
Closed this short near tg2


http://img4up.com/images/61539241032690655851.gif


A simple trading plan without all the the noise, hype and the rest of the junk out there. Simple pattern developed, clear entry and defined stop above the pattern and demand zone below, done


Kind regards


Red
  • #14
  • Jun 22, 2010 1:26pm Jun 22, 2010 1:26pm
I'd say just watch the rhythm, you're patterns will be a result of the rhythm! Not vice versa.
  • #15
  • Jun 22, 2010 1:58pm Jun 22, 2010 1:58pm
Current trade


http://img4up.com/images/29521344411293344137.gif



Red
  • #16
  • Jun 22, 2010 6:27pm Jun 22, 2010 6:27pm
http://img4up.com/images/30190197356757076808.gif



Red
  • #17
  • Jun 22, 2010 9:04pm Jun 22, 2010 9:04pm
Quoting naddix
I would like to get some opinion of trading different. I think that one can not make money in forex by doing the same thing as everyone else. I also think that just being a retail forex trading you are already starting at a disadvantage....
In an attempt to steer the conversation back to what the OP was asking about:
1)Should you be working on a system that is like no other? Should you be trading a system that does not even come close to another system?
Ans: If you are a genius maybe you can pull this off. Otherwise it is better to follow the herd. Really... If you don't know how the market works, you can't come up with a better strategy. Before you become a leader you have to be a follower. So... imo don't reinvent the wheel. Just pick a nice looking wheel and use it for now.

2)Can you find a system that is really bad and trade it in reverse? (To Some Degree)
That is not exactly true. Every system will experience +ve periods and -ve periods. No 1 system can capture all market movement. For example, a trend following strategy would do poorly during sideways periods. Does this mean that the strategy is bad? No... it just means that it doesn't work all the time. This is true for all strategy.

The problem with most people is that they change strategy too fast as soon as they see a few losing trades. You need to understand that there are periods where your strategy is weak.

I define a good system as one that makes me more money than I lose. Any system that does that is good.


What you need to do now is to find a strategy that works and stick with it for 1 or 2 months. Once you know that it works (or not) then you can modify it, reinvent etc.
  • #18
  • Jun 23, 2010 6:55am Jun 23, 2010 6:55am
I'm reminded of a song that goes something like "know when to hold 'em, know when to fold 'em. Know when to walk away, know when to run".
I think trading is like this too. Professional poker players have to learn when not to play just like we do. I was listening to a pro poker player on the radio and he says that there are some people he doesn't play against because there is no margin. If the other players are in the same range of skill then it is more profitable to go elsewhere.
I think trading is also like this. While I usually stick to aud/usd and eur/gbp (weak correlation) I don't try and force money from them. If there are no signals I look else where. I also have (just recently) tried to cultivate a habit of not trading again for a few days or a week after a really good trade. This is because (like I posted earlier) I believe over trading kills more accounts than anything else. The belief that what I did once I can automatically do again when ever I want is dangerous.
Even now I'm looking at the eur/usd thinkin' geeze that would be a good short. But discipline tells me that the eur/gbp trade has too close a correlation and it would therefore need to be closed first.
  • #19
  • Jun 23, 2010 7:03am Jun 23, 2010 7:03am
With regards to your sig and fools
I am personally quite happy the GFC hit when it did. I had been trading well for several months with a smallish account. I was talking to my spouse about our plan to put more money in. I think now that if the GFC had arrived a year later then I could have lost quite a few more dollars than I did. The extreme volatility of the event made most of my trades into losses. Even if like the OP asks about and I'd reversed my strat, I still would have lost (only a lot more). But when I lost a trade I went straight back in.

So hopefully this fool has learnt and is better for it
  • #20
  • Jan 1, 2011 12:50pm Jan 1, 2011 12:50pm
I walked away from this thread for the reason it never stayed on subject. This thread was some part of a joke that if you can pick trades wrong more then you can pick winners then reversing would be the way to go. This is not true due to many other factors besides just reversing the trade.

Instead of trading in reverse the idea would be to find out why this trade didnt work, rather then reversing and trying to find a easy way out.

Doing the work pays off in the end.
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