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Ridiculous Trading Myths

  • #201
  • Nov 7, 2010 12:27pm Nov 7, 2010 12:27pm
Quoting nasir.khan
Is it like an inefficiency in you brokers pricing...
I mean I heard some people talking about those and exploiting them and making huge amount of money. But those kind of inefficiencies dont stay for a long time.
What about an inefficiency in pricing caused by the "crowd psychology" taking price where it shouldn't be considering trend/support and resistance
over a short period of time?
  • #202
  • Nov 7, 2010 12:29pm Nov 7, 2010 12:29pm
Quoting Noloqy

However, from a macro perspective, the market remains zero-sum, as agents do not necessarily incur costs, and non-settlement does not enter the real market.

Of course agents incur a cost, they have offices, personnel, connection cost and yes execution cost. You are using a very simplistic approach ignoring the bigger picture trying to sustain a myth in your own head.

You may as well tell us you won the London Marathon, as long as you ignore the 11,000 or so that finished ahead of you.
  • #203
  • Nov 7, 2010 12:31pm Nov 7, 2010 12:31pm
Quoting hubbahubba
That is simply not true and the reason is fundamentals. A market that jumps up the minute a good jobs or manufacturing report comes out is NOT random!

The market ultimately follows the fundamentals. Nothing random about that. Lower time frames are noisier but they are still working off the fundamentals.
So it takes us back again to higher time frames... no?

When talking about fundamentals, Lets say we know stock are going to go up and dollar will go down until QE2 is in progress. Pretty simple huh.

But what does it have to do with a trade in 5m or 30m time frame with a 20 pip Stop.......nothing!!!

Looking at a ship from a distance of 1 meter and telling which side is it turning to is difficult but from a mile away is easy.
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  • #204
  • Nov 7, 2010 12:38pm Nov 7, 2010 12:38pm
Quoting hubbahubba
And if that were true all charts would become a straight horizontal line the higher up in time you go. The market is not driven by speculators. It's driven by fundamentals.
True very true.

But again the point is fundamentals are not shown on a 1m or even a 1h chart. They are there on a Daily and above.
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  • #205
  • Nov 7, 2010 12:38pm Nov 7, 2010 12:38pm
Quoting hubbahubba
And if that were true all charts would become a straight horizontal line the higher up in time you go. The market is not driven by speculators. It's driven by fundamentals.
Like I said, that's the way I see it and trade it.

PA just allows me to ride on the back of fundis and the big money.

I am not trying to convince anyone of anything here, I have spent serious time and money working out how best to profit from the markets.

It took six months in a live room with a fundi trader, he traded multiple accounts, million dollar plus I would say and 10 years experience to prove to myself PA was the better choice for me.

He lost a small fortune in front of my eyes, PA told me why every time he pulled the trigger, he will get his mojo back but to see PA beat a very successful trader was proof enough for me.
  • #206
  • Nov 7, 2010 12:40pm Nov 7, 2010 12:40pm
Quoting hubbahubba

The market ultimately follows the fundamentals.

Here we have another myth. The market does not care about the funnymentals or the technicals, price only changes due to the collective consensus of the participants, irrespective of whether they are informed or uninformed, it is the net effect of the participants, muppets and all that move price.
  • #207
  • Nov 7, 2010 12:46pm Nov 7, 2010 12:46pm
Quoting cloggie
the largest part of the volume in FX is non-speculative.
I read the opposite is true....another myth?
  • #208
  • Nov 7, 2010 12:47pm Nov 7, 2010 12:47pm
Quoting hanover
If I may be permitted to speculate, and also be brutally candid:

1. Entertainment and possibly some stress relief. It can be fun discussing semantics to pass time while waiting for the next valid setup to occur.

2. Many unprofitable traders outwardly claim that that success is impossible, but inwardly believe otherwise. They cling to the possibility that somebody on a forum will share a trading secret that will become the "aha" moment that turns their trading around. That's possibly a harsh statement, but I suspect that it's true.

3. Even more...
you are probably right, i guess this is all just hitting me at this moment. when i first started coming here, i guess, i had a an idea of what i wanted it to be, maybe i should start a new thread where only positive thoughts are allowed and see where that goes........
  • #209
  • Nov 7, 2010 12:49pm Nov 7, 2010 12:49pm
Quoting Four Kids
Yes, and everything that I think you are referring to has been removed in the last 12 hours.

And here I am thinking this was an open public forum.

Public yes, open no.
Yes, it's a world wide anti-bickering conspiracy.
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  • #210
  • Nov 7, 2010 12:58pm Nov 7, 2010 12:58pm
I think there are at least two types of 'fundamentals':

1. News announcements, that can cause intraday spikes, some of which possibly adjust overall long-term sentiment regarding the economy of the nation involved. I believe there are some expert 'news traders' who are able to exploit the intraday spikes.

2. Macroeconomic factors, such as the carry trade, or increasing strength or weakness in a nation's economy relative to others'. These appear to fuel the longer term trends. For example, the problems in Europe earlier this year coincided with the decline in EU shown in the screenshot.

It's my view that long term chart trends/patterns are more reliable, due largely to both macroeconomics and greater opportunity for collective averaging (more participants). However, I'm in no way adamant about this; trends definitely exist on intraday charts, and there are scalpers and swing traders who are proficient enough to exploit them.
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  • #211
  • Nov 7, 2010 12:59pm Nov 7, 2010 12:59pm
Quoting jag1966
Like I said, that's the way I see it and trade it.

PA just allows me to ride on the back of fundis and the big money.

I am not trying to convince anyone of anything here, I have spent serious time and money working out how best to profit from the markets.

It took six months in a live room with a fundi trader, he traded multiple accounts, million dollar plus I would say and 10 years experience to prove to myself PA was the better choice for me.

He lost a small fortune in front of my eyes, PA told me why every time he pulled the trigger,...
I never said anything about trading fundamentals. I simply said the market is driven by it and is therefore NOT random. I also trade PA. On news days I stay away until the market sorts itself out. The reason is that I am not trying to predict the future and trading news announcements is a fools game. It's how those fundamentals ultimately drive the market that I am interested in and that is done with PA.
  • #212
  • Nov 7, 2010 1:00pm Nov 7, 2010 1:00pm
This has got to be one of the best ones out there.
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  • #213
  • Nov 7, 2010 1:01pm Nov 7, 2010 1:01pm
Quoting cloggie
Here we have another myth. The market does not care about the funnymentals or the technicals, price only changes due to the collective consensus of the participants, irrespective of whether they are informed or uninformed, it is the net effect of the participants, muppets and all that move price.
Yeah this is what happens everyday after news announcements and is visible on lower TF's. But in the end of the day/week/month all of the participants have to correct themselves and so does price.

and some people are exploiting it....
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  • #214
  • Nov 7, 2010 1:02pm Nov 7, 2010 1:02pm
Quoting nasir.khan
True very true.

But again the point is fundamentals are not shown on a 1m or even a 1h chart. They are there on a Daily and above.
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Yes but all those ticks on the lower time frames are people trying to predict the future and the future is what the fundamentals ultimately say it is. So of course there will be a lot more noise on lower time frames.
  • #215
  • Nov 7, 2010 1:08pm Nov 7, 2010 1:08pm
Quoting Intu
What about an inefficiency in pricing caused by the "crowd psychology" taking price where it shouldn't be considering trend/support and resistance
over a short period of time?
Nice one sir.

Something like this trade right? Yeah i so trade these at times when i am 100% sure about what i am doing but again these do not occur everyday.

Or something like correlations, For example u have 2 heavily inverse-correlated pairs like EU and Uchf. Eu shoots up a 100 pips and Uchf just hangs there and only goes down like 30 pips.

So what do we do here?

When Eu hits resistance and stops buy hell outta Uchf.

But can those examples could really be called an inefficiency??

I think its intelligent trading or again this could be an edge that trader posses I.E exploiting those opportunities when ever they occur. But u have to be well informed and be quick on your hands.
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  • #216
  • Nov 7, 2010 1:19pm Nov 7, 2010 1:19pm
Quoting Slack
Yes, it's a world wide anti-bickering conspiracy.

Thank you Slack.

Sorry for side tracking your thread, but it is the nature of some threads. It was a slow Sunday after-noon.

I had no doubt that it would come back on track when the northern hemisphere woke up.
  • #217
  • Nov 7, 2010 1:37pm Nov 7, 2010 1:37pm
Quoting Four Kids
Thank you Slack.

Sorry for side tracking your thread, but it is the nature of some threads. It was a slow Sunday after-noon.

I had no doubt that it would come back on track when the northern hemisphere woke up.
No worries, man.

You're more than welcome to post in this thread.
  • #218
  • Nov 7, 2010 2:10pm Nov 7, 2010 2:10pm
Quoting Monroe
...
1-2% risk with no real edge playing TA patern/indicator probabilities fine... but if you have a real edge things are different aren't they?
the answer/reason lies on the trader's personality.
2 traders with 90% win rate wont risk the same percentage.
  • #219
  • Nov 7, 2010 2:23pm Nov 7, 2010 2:23pm
Yes but both are more likely to still risk 1-2% because that's what the common trading "education" says you should risk.
  • #220
  • Nov 7, 2010 2:26pm Nov 7, 2010 2:26pm
Quoting supremeChaos
the answer/reason lies on the trader's personality.
2 traders with 90% win rate wont risk the same percentage.
I think the percentage they risk depends on a few things, especially the system and it's expectancy.
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