There are no secret patterns and there will never be one | Page 12 | Forex Factory

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  • #221
  • Oct 10, 2010 4:51am Oct 10, 2010 4:51am
Typically, the trader looks at a certain currency pair and starts applying various technical analysis, using it to "calculate" the reversal points.
But it is useless labor. All discrepancies will show itself with a probability of 50/50, leading eventually to the loss of deposit. And the fact is that the trader does not see the trees for the forest. And the properties of the forest is not like the properties of wood.

If the currency pair EUR/USD is growing, it can not be seen looking only at one price chart with a certain accuracy to say, a dollar cheaper or more expensive euro. Can this be determined? Yes, looking at other charts containing the same currency!

Pair is not alone in the market and sets defines the property of it. This property - interdependence. Currency can not go all against all! "This is the" Achilles heel "of Forex and its fundamental difference from the other markets.

Any imbalance in market prices of currencies, ultimately is eliminated, to trade imbalances - that's the whole strategy of the game on the market.

Regards
  • #222
  • Oct 10, 2010 5:10am Oct 10, 2010 5:10am
A chart studier's aim may be to get the underlying motion of a chart and, to trade between, a couple of examples of the affect of a small, specific chart piece. There's an infinite number of ways to do this, so I guess 50% chance of getting it right enough makes sense. It puts randomness on the chartist's skill.

This is important, because a thread like S/R and TL on Randomized Price Movement, which shows that patterns are found, and that chart drawing devices may be used effectively, on random charts, suggests the argument whether price is random or not is a moot point.
Thus, I, for instance, may like to argue 'cycles of human nature', sessions, fundamentals, differences between symbols' charts, or other definitive portion of a chart, against randomness, only it doesn't really matter.
  • #223
  • Oct 10, 2010 5:17am Oct 10, 2010 5:17am
Quoting WaveTop
Hyper imagination maybe on your part? And, what is a "Twee," exactly? Inquiring minds want to know.

Lastly, the disclaimer stands as written. Its not meant for "believers." Its meant to clarify a point. In my mind, whether one believes it or not, the point ha been duly clarified. If you see racism in a post about Cause and Effect, then you probably see Elephants and Gingerbread Sticks in cumulonimbus cloud formations, as well.

People typically see what they want to see, not what's obviously sitting in front of them, more often than I would...
Thanks again for taking the time to post Wavetop, all very thought provoking stuff. I have enjoyed reading all your older posts
here on FF.
  • #224
  • Oct 10, 2010 4:32pm Oct 10, 2010 4:32pm
Quoting OceanOfPips
Just finished reading the PDF. Interesting read, especially the section on "past performance does not guarantee future results".

So my question is this...

If you're doing well as a trader, how do you really know that you're a good trader or if you've just been extremely lucky?

If you know why you enter, and can continue to understand why you enter, and it is consistently profitable, I would not even come close to calling that luck.

Besides, if you are relying on luck alone, you still have a 50% shot. Pretty damn good odds if you ask me... even if you are gambling.
  • #225
  • Oct 11, 2010 1:47am Oct 11, 2010 1:47am
Quoting jag1966
Thanks again for taking the time to post Wavetop, all very thought provoking stuff. I have enjoyed reading all your older posts
here on FF.
+1

Edit: Oops, I was referring to this thread, will search the older posts.
Good Trading
  • #226
  • Oct 11, 2010 3:53am Oct 11, 2010 3:53am
As a new trader in forex I find this discussion "Pure Gold".

Thank you so much to KingFisher,Wavetop and thread starter esuffw.I will not pretend to know the Market at all, but you have set me on my path to discovering and researching all I can into understanding the best I can the market forces which are in play.

My account managment has improved out of site, I have picked up lots of gold nuggets in this discussion.

Cheers
  • #227
  • Oct 11, 2010 6:30pm Oct 11, 2010 6:30pm
I disagree. There are patterns. I see them everyday and I trade the same patterns everyday. Your just not looking hard enough.
  • #228
  • Oct 12, 2010 9:38pm Oct 12, 2010 9:38pm
Hey traders

Sorry, still havent posted charts regarding Method of observation. I see there are a lot of replies, it will take me some time to read and to post. (Its been hard to get to a computer... My email was hacked, then after that my pc dont work anymore, so I can only pop in a light message durning my work time. bear with me, DELL is coming to save me soon.)

Glad to see the discussion
Life is a school for the soul
  • #229
  • Oct 13, 2010 8:41am Oct 13, 2010 8:41am
Quoting WaveTop
Being busy, I won't get to post here everyday, and I won't be able to respond to Private Messages, sorry about that....
Brilliant Wavetop. Mate, accept my salute and a voucher. Reading your thought process can change life of many loosing traders.

I have read your post thrice spending 3 hours on it. I know thats the real truth in trading- repeated pattern numbers game. It is going to be a long journey for me to decipher patterns, make notes of them and trade them with discipline.

Thanks for your outstanding contribution.
  • #230
  • Oct 13, 2010 8:53am Oct 13, 2010 8:53am
Quote
Why do Patterns exist in the first place?

This whole thing comes down to an understanding about the Universe in which we live out our lives: There are no random coincidences. Not one. Not even a single one. Not even a fraction of a single one.

There are no random happenstances in the Universe - you won't find one anywhere. Think about it. If the Universe were truly "random" and truly "chaotic," there would be no human beings, no earth, no solar systems, no galaxies and most importantly, no laws of physics existing independent of our ability...

I have 3 questions for you Wavetop. Please do let me know your thoughts on it when ever you are free-

1) Why do patterns change itself? I see if unemployment claims are bad then expected, then market will rise and if next week unemployment claims are again bad, market will fall this time.

Same thing with NFP- Bad NFP data on june 4, 2010 caused Minus 300 points loss on Dow Jones while bad NFP data on Oct 1, 2010 caused Plus 57 point gain on Dow Jones.

2) Are all news item important? I read one of the top CME trader interview- He said dont focus on news too much. Similar news on two occasions can give 2 different results. I have analysed it. Making fixed pattern on news can be disastrous.

Now if news is not that important, then what is the 'cause' which produces effect? Is it individual sentiment of traders of what is high or low?

3) Trading looks to me a mystical process just like meditation. I heard top meditators saying practice, practice, practice and you will experience peace and silence from inside. Yes with practice, i am able to work on meditation process but most people fail in meditation because it is a sort of mystical process.

Is trading also a kind of mystical process?

Thanks Wavetop for your precious time.
  • #231
  • Oct 14, 2010 6:31am Oct 14, 2010 6:31am
Quoting esuffw
Moving force is MARKET ORDERS

Resistance force is LIMIT ORDERS
That's a great illustration of the market, thanks for posting this. You could perhaps also include STOP orders with the moving force as they are market orders really. This is interesting stuff when you consider the above within the context of breakouts and trading ranges.
  • #232
  • Oct 15, 2010 12:09pm Oct 15, 2010 12:09pm
Quoting esuffw
Hey traders

Sorry, still havent posted charts regarding Method of observation. I see there are a lot of replies, it will take me some time to read and to post. (Its been hard to get to a computer... My email was hacked, then after that my pc dont work anymore, so I can only pop in a light message durning my work time. bear with me, DELL is coming to save me soon.)

Glad to see the discussion
Hope you get things sorted soon esuffw.

Also I just wanted to bump this thread, IMHO it is one of the best on FF.
  • #233
  • Oct 17, 2010 2:36am Oct 17, 2010 2:36am
I found the thread below very useful regarding how the markets work.

I apologise if I have broken thread etiquette, I just thought it may be of interest to some of the contributers on this thread.

It is a fascinating read, surreal when they start talking of multi million dollar trades towards the end of the thread.

http://www.forexfactory.com/showthread.php?t=5809
  • #234
  • Edited 1:21am Oct 18, 2010 1:19am | Edited 1:21am
The patterns are the mistakes we make. Surely there are repeating patterns and designs in how & when we go wrong, a particular behavioral structure.

If we can list and eliminate each and every mistake we make in trading, what remains would be perhaps the "Way to trade"?

I am not saying I have done all this - Just a thought.
  • #235
  • Oct 18, 2010 8:31am Oct 18, 2010 8:31am
Hey all

I am back with a netbook! (New PC coming in very soon, ) There are no trading software on this little thing which is a little annoying, but hey, I am HERE!

First of all, thank you everyone who have taken the effort to contribute. There are many good points made. Again, it makes me a very happy man to see collective knowledge at work.

"To Parazite"
Another piece of gold! Know the power of crosses and the story they tell. Sometimes they give hints beforehand.

"To Jag1966"
The thread is excellent. Point of view from an insider, a must read. Notice he mentioned how the dealers trade. It is simpler then most would imagine.

"To Kingfisher"
I notice you mentioned meditation. Do you train your T.E by any chance? (If you do, you will know what T.E is)
Life is a school for the soul
  • #236
  • Oct 19, 2010 3:42am Oct 19, 2010 3:42am
This is today Asian morning.

Where range breaks happened like this on muti-currencies, at asian morning with no big news, you know it is going to hit the yellow boxes very hard! DONT FORGET ABOUT POSSIBLE RISK THOU!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: JPY.JPG Size: 130 KB
Click to Enlarge Name: EUR.JPG Size: 107 KB
Life is a school for the soul
  • #237
  • Oct 19, 2010 7:08am Oct 19, 2010 7:08am
Could you please explain a little more what we are looking at here.
  • #238
  • Oct 19, 2010 4:45pm Oct 19, 2010 4:45pm
Quoting WaveTop
There are no random happenstances in the Universe - you won't find one anywhere. Think about it. If the Universe were truly "random" and truly "chaotic," there would be no human beings, no earth, no solar systems, no galaxies and most importantly, no laws of physics existing independent of our ability to perceive them.
I call hogwash. Basing your whole reasoning on this is building a house on quicksand.

You don't need to know how the universe started to become a successful trader. You don't need to know about the big bang to work with probabilities and know that the markets are made up of people who experience fear and greed.

If you do your homework studying price action patterns enough to turn the probabilities in your favour, then that's all it takes to trade with positive expectancy.
  • #239
  • Oct 19, 2010 5:52pm Oct 19, 2010 5:52pm
One thing that I truly believed help make me a better trader...

1. Open up your practice account.
2. Always keep a position open. Stocks are either moving up, down, or sideways. If you believe it is going down, short it. If you believe it is going up, go long.

If you feel a long is going to reverse... short it... you get the idea, but always keep a position open.

Why would you close out a correctly chosen direction if you didn't plan on getting back in? Because you thought it found the bottom? Well, if it found the bottom, doesn't that mean it's time to go long?

This exercise will build an immense amount of confidence.
  • #240
  • Oct 20, 2010 12:05am Oct 20, 2010 12:05am
Thanks Venice, this helped me in the past too.
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