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Fibnacci trading..Are U thinking what i'm thinking? 76 replies

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Think Outside the Box 26 replies

Attachments: Thinking Outside the Box!?!
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Thinking Outside the Box!?!

Quoting Hedginghog
In order to think outside the box, you firstly need to understand what is inside the box very clearly indeed. This, in my humble opinion, is where many would-be traders fall at the first hurdle.

For many, the "forex market" (and many other markets for that matter) is defined by a screen with a price chart on it and with lots of indicators to choose from, provided by the retail broker, where there is a secret to be decoded and a "profitable system" to be discovered.

Within these confines it is a 2 dimensional game, with less than a 50%...
I enjoy your writing style and you come across as a very knowledgeable trader. You are quite clear in your views about the use of indicators as a worthless trading tool in one of your threads, and I tend to agree. In particular your own style of trading that requires greater patience and discipline for the correct set-up also resonates with my trading style. You argue here that one needs to understand how the market operates, who are the participants, what are they doing and why... What I do not understand, in another thread, is that you highly regard The Max Lite course, which seems to totally contradict your more valuable contributions.

Heavily laden with indicators the max seems to go against every notion of market logic of understanding market value, providing pure illusion through indicators, maximising risk by forcing one to trade at 'retail' prices. Please tell me it was a moment of madness. I hate to bring this up here (if only to not want to advertise the Max course, even in poor light!), but you have no messaging set-up.
Quoting Porkpie
I enjoy your writing style and you come across as a very knowledgeable trader. You are quite clear in your views about the use of indicators as a worthless trading tool in one of your threads, and I tend to agree. In particular your own style of trading that requires greater patience and discipline for the correct set-up also resonates with my trading style. You argue here that one needs to understand how the market operates, who are the participants, what are they doing and why... What I do not understand, in another thread, is that you highly...
Hi PP - Thanks for your comments and your raise a worthy question. I don't want to distract the direction of this thread, so will try to be brief in my answer.

In short I did not treat it as "system" (many would I suppose) but as a "method" and not surprisingly I made my own adjustments to some of the technical things taught in the course. I sometimes use the lite priniples on daily timeframes ticking away in the background, but it is with a relatively small number of contracts and really just for fun - it is very much a distant 2nd place to my existing trading activities, in time, focus, and of course outcomes. I am not a huge fan of trend trading (possibly it is more that I don't like the exposure of a single instrument without some form of hedging or insurance attached) but if I did like trend trading, then I would probably take it further, but with reference to your question who knows what it would look like if and when I'd "made it my own" as I believe needs to be done - each to their own I suppose.

Your point about indicators - yes, mostly complete BS - just a reflection of what has happened or what the price is doing now - but some indicators under some circumstances can assist traders to create a useful reference point around which to make decisions, informed hopefully by the wider market knowledge we both refer to. But it seems that this is not so common.
Quoting Darkstar
The reason I wanted to weigh in on the subject wasn't to start a debate about the zero sum aspect of markets. Clearly, they are zero sum, but that isn't the point. My point was to get people thinking about the implications for the zero sum nature in their trading decisions.

[color=black][font=Verdana]I've been writing extensively on the subject of outside the box thinking lately and one of the key premises...
Darkstar - I seem to recall we sledged each other in a previous context, but I just wanted to say that your posts in this thread are outstanding. When talking of "thinking outside the box" you are describing some of the practical underlying concepts far better than me and anyone else for that matter. There are quite some nuggets of gold in your posts here and the participants seeking to gain something from this thread should take note.. Kudos to you my friend. (Put me on this list to buy your book)
Quoting Hedginghog
Your point about indicators - yes, mostly complete BS - just a reflection of what has happened or what the price is doing now - but some indicators under some circumstances can assist traders to create a useful reference point around which to make decisions, informed hopefully by the wider market knowledge we both refer to. But it seems that this is not so common.

Yeah most traders seem to jump from one indi to the next never fully realizing or understanding there is no perfect indi. Some of them as you say can be used as reference points for sure. I do that all the time.

For me it's more about positioning. If I have a good haunch where the market is headed and positioned well I don't have to be all that right about how far the market will move or how much I think it may move.

Sometimes I may stick a toe in and be hugely right other times not so much... so bring the soldiers home and find a new battle to win.

It wasn't until I viewed the market in the 3rd dimension until it really started to click for me. But I spent thousands and thousands of hours in front of the charts watching price action and that is probably another big difference from what some will do and what some won't do.

To get completely outside the box you have to go where no trader has gone before. You have to do what others won't do and quite possibly what they will ridicule you for in forum boards such as this.
Quoting pip_seeker
It wasn't until I viewed the market in the 3rd dimension until it really started to click for me. But I spent thousands and thousands of hours in front of the charts watching price action and that is probably another big difference from what some will do and what some won't do.

To get completely outside the box you have to go where no trader has gone before. You have to do what others won't do and quite possibly what they will ridicule you for in forum boards such as this.
i love this. there's always this 'other' aspect or method or mindset or xyzabc. the problem with going down the path less taken is we first need to know the path is there. we need to be aware of it.

the problem for the failures is they can't see or know this other path. you can't know what you don't know!

it seems the only way to get to this nirvana is to keep smacking your head against the wall with charts and fundamentals and indicators and this and that and blah blah, until some day you trip over something new that you hadn't thought of before.

blind luck seems to be the only way to find this success, if success is even possible... after all, it is always hearsay and inuendo. hardly ever EVER cold hard facts and proofs.
  • Post #86
  • Quote
  • Edited 1:40pm Dec 3, 2010 2:02am | Edited 1:40pm
Quoting newyear498
Yeah but just remember trend analysis and support and resistance points.. they all go back to Dark Star talking about order flow.. those points just indicate where buyers and sellers are.. so it might be better to look at things less like technical analysis and more like order flow :-p

any insight into how your teacher predicted where price was going? and I'm not sure what you mean he could do it on any instrument? like indicators?

Thanks for your insight!
Order flow is nice and I need to learn more about that along with VSA, but for now pure TA does it for me. Keep it simple.

By instruments I mean any currency or index.

My mentor taught me to trade trends within trends, take a look at this mornings AUDUSD h1 uptrend, then look at the m5 chart. I went long using the newly formed m5 uptrend at 5.50 gmt, 0.9757 target next res at 0.9775 ish.

Sorry for the offtopic posts, Happy trading.
Quoting jag1966
Order flow is nice and I need to learn more about that and VSA also but for now pure TA does it for me. Keep it simple.

By instruments I mean any currency or index.

My mentor taught me to trade trends within trends, take a look at this mornings AUDUSD h1 uptrend, then look at the m5 chart. I went long using the newly formed m5 uptrend at 5.50 gmt, 0.9757 target next res at 0.9775 ish.

Sorry for the offtopic posts, Happy trading.
Thanks for the insight and it sounds like your have some very smart trading methods!
Quoting jag1966
Order flow is nice and I need to learn more about that along with VSA, but for now pure TA does it for me. Keep it simple.

By instruments I mean any currency or index.

My mentor taught me to trade trends within trends, take a look at this mornings AUDUSD h1 uptrend, then look at the m5 chart. I went long using the newly formed m5 uptrend at 5.50 gmt, 0.9757 target next res at 0.9775 ish.

Sorry for the offtopic posts, Happy trading.
i agree, thats all you need:

2 or 3 timeframes, watch price action & volume, high probability low risk entry, trail stop in trend, take profit in range

focusing on profit is not important, minimizing risk is, profits will take care of themselves

own psychological condition and market environment is more important in risk assessment than % of balance or (illusionary) win loss or risk reward ratio (they are statistics and relevant in hindsight)

i disagree that price is predictable, and even if it is under certain circumstances its not necessary to profit

indicators just assemble price information differently (mostly blur it) and make trading more complicated than it needs to be, by adding traps

thinking outside the box is an intellectual game, one can trade whats right in front of us
Invincibility lies in the defence, the possibility of victory in the attack
  • Post #89
  • Quote
  • Edited 7:00pm Dec 3, 2010 2:13pm | Edited 7:00pm
I have been doing a LOT of thinking about risk to rewards in the last few.. well years lol.. but I have an idea for unlimited gains (sorta) but I want to know what you guys think!

Any suggestions on the best ways to use risk to reward dynamically.. like you can have fixed risk to reward.. a 1:1 or 1:2

but I use it dynamically and still not sure on the best way to use it..

I usually do 1:1 but once it goes up to my target I only sell half, set other half to BE and let it run by trailing pull backs or if I have to leave the screen a trailing order


but what about ways to make infinite profit from risk to reward on a calculated entry.. ok so something like

wait for the main trend to pull back and have an order with 10 pips stop loss 1% of your account.. and like almost instantly as price moves in your favor just move to BE and we keep doing this untill eventually our BE doesnt get hit and price is running in favor..

once you get an order that didn't get hit.. leave it a day.. then every day start locking in profits to point where price should never come back to unless trend is reversing(not sure which points these would be so roll with the idea)

and as days progress if you can start locking in profits from the high of 3 days ago and stuff.. just keep it running

as an example find something like the USD is losing value.. and this method is all about capitalizing on some sort of information like this

the hard part is first getting your order to BE.. then getting your order to eventually not hit you BE for long enough.. but once you get a few days lead.. you could be a million in a year.. the more unrealized profits you get the farther you would set your Stop Loss..

I think everything I mentioned is an out of the box idea and would work very well if anyone could help define the exact entry and exit rules.. the most important part is just finding a high probable trade that will not hit our order so we can get things to BE.. the actual not hitting BE is luck.. and the capitalizing on the trade is fundamentally based information on the currency


PLEASE LET ME KNOW WHAT YOU THINK!
Another outside the box idea is we get everyone at FF to join forces and start our own brokerage that way we can make money from the spread hahah!

that will never happen tho.. I do like my first idea tho in the post above
Hello at all,

i ve just finished reading smjones journal in the recycle bin regarding his modified Parrondo's_paradox system.

Too bad he stopped the journal. The results looked great.

I am wondering if he is still using it ?

http://www.forexfactory.com/showthread.php?t=106515
Quoting newyear498
I have been doing a LOT of thinking about risk to rewards in the last few.. well years lol.. but I have an idea for unlimited gains (sorta) but I want to know what you guys think!

Any suggestions on the best ways to use risk to reward dynamically.. like you can have fixed risk to reward.. a 1:1 or 1:2

but I use it dynamically and still not sure on the best way to use it..

I usually do 1:1 but once it goes up to my target I only sell half, set other half to BE and let it run by trailing pull backs or if I have to leave the screen a trailing...
Extreme risk reward ratio may not bring you optimal profit factor. Your could have PF of 2 for RRR of 3 but only have PF of 1.2 for RRR of 30.
Quoting newyear498
I have been doing a LOT of thinking about risk to rewards in the last few.. well years lol.. but I have an idea for unlimited gains (sorta) but I want to know what you guys think!

Any suggestions on the best ways to use risk to reward dynamically.. like you can have fixed risk to reward.. a 1:1 or 1:2

but I use it dynamically and still not sure on the best way to use it..

I usually do 1:1 but once it goes up to my target I only sell half, set other half to BE and let it run by trailing pull backs or if I have to leave the screen a trailing order


but...
this is called picking tops or bottoms, and it is what we all want to do but fail at. depending on how you play it you might make it work, and reading TheRealThing's posts will elaborate more, or whatever that equity milliipede thread is also.

it's just one more way to spin light on scaling-in / pyramiding.
Quoting nubcake
this is called picking tops or bottoms, and it is what we all want to do but fail at. depending on how you play it you might make it work, and reading TheRealThing's posts will elaborate more, or whatever that equity milliipede thread is also.

it's just one more way to spin light on scaling-in / pyramiding.
I would not consider this picking tops and bottoms as the main focus.. its just about letting profits run for several days and weeks when your lucky

I guess it would pick tops and bottoms sometimes but overall if you play it the way I figured it out after some study of charts tonight.. you would almost always be able to ride the direction of the main trend for a few days

the MAIN problem I have.. is determining if letting profits ride is any better than simply taking profit when the time comes.. for example..

would it be more profitable to sell my entire lot at once or sell half and risk seeing if other can ride it..

because the times I do lose would feel like 2:1 lose to wins.. so can the ones I let ride make up for those?

I think overall they can since trends last several days.. but who knows maybe its break even at best

Hmm.. I think shooting for infinite profits are better goals tho than the inside the box thinkers shooting for 1:2 or 1:3
newyear, I've been spending a lot of time as of late also trying to calculate an optimal take profit level with respect to risk given on the specific trade, yet I can't rely on any set ratio. I'm in the belief that RRRs, like the market, have to be customary to the specific trade setup at hand. What we can rely on is every trade will never the same so our reward will have to differ since we only need to limit risk which will let profits ride. Like Silverheat said, risk:reward ratio is best viewed in hindsight as a measure of trade optimization.

I like the 'take half off the table' when PA reaches the nearest resistance level then move the stop to break even. Nubcake mentioned pyramiding in to a trade which I prefer to study. Correct me if I'm wrong, but if pyramiding in correctly, you can actually keep the same amount of risk throughout the trade.
Quoting EmeraldEyes
newyear, I've been spending a lot of time as of late also trying to calculate an optimal take profit level with respect to risk given on the specific trade, yet I can't rely on any set ratio. I'm in the belief that RRRs, like the market, have to be customary to the specific trade setup at hand. What we can rely on is every trade will never the same so our reward will have to differ since we only need to limit risk which will let profits ride. Like Silverheat said, risk:reward ratio is best viewed in hindsight as a measure of trade optimization.

I...
yes, you can pyramid and still have the same amount of risk available for the market to take from you. but once you are in the black you can do anything you like really, from increasing your risk (for whatever reason :/ ) or decreasing to to zero or simply locking in profit and letting the market work itself out and reveal itself further to you.

anything you do has repercussions. pyramiding will give you a big payoff if you bank coin at the end of the day, or it will be a big waste of time if the market retraces back and takes you out of the game at breakeven, or worse, with some amount you decided to leave at risk.

taking profits, moving to breakeven, taking half off and letting the rest ride. it's all the exact same thing packaged in a different dress. if you take half off and the market retraces back to breakeven then you earned the half position you took profit of, then on the next trade perhaps the market runs a bit further so you gain the half plus another half if it moves further then retraces... on the other hand you could have just take the full position the first time, or maybe have gotten stopped, then in the future it might run a bit further and you take full position at 2r.

the market movement will be optimal for one strategy one time, and then another strategy another time. what dictates which will be better or worse is where you leave your stop (if any). if you somehow knew that the market was going to trend like a mofo then you would pyramid all day long and trail the previous positions open price meaning you have locked-in profit no matter happens and will continue to do so until the market comes back to your sl and knocks your pyramid down. with the equity gained as the pyramid moves in your favour and more positions are added you will be able to continually add small positions and this in turn generates more equity and position-opening possibilities.

the ultimate setup and holy grail is buying the bottom or selling the top and pyramiding until your entire available margin is in the market and then continue to let it generate increasing amounts of equity / margin in turn allowing you to open MORE positions and wash rinse repeat. this is simply compounding an open position.

but, because the market is an ass and meanders all over the place you will be hard-pressed to accomplish this ever and it is simply a dream.

if you have some knowledge or intuition as to what the price is going to do (you jedi trader, you), then you would know if pyramiding is going to be possible of if you should just take profit at the first bar that moves the opposite direction or take half and move to break even etc.

trailing a stop, taking profit at some designated place, taking half profit and letting the rest ride, pyramiding.... it's all the same thing if it doesn't get used at the right time and will all lead to loss. if one knows when to use which approach then i say you know something about the market and you will have much coin coming your way. that's where we all want to be. milking the market in the most efficient manner, instead of it milking us in any way it can.
Quoting nubcake
yes, you can pyramid and still have the same amount of risk available for the market to take from you....
Ok, Sounds like determining which to use and when is the best idea overall thank you

but I am not sure what you mean by Pyramid.. I am new to that term as far as RRR

is pyramid just the same thing I talked about before?

do you have a link to how to set up a pyramid RRR?


Thanks!
Quoting newyear498
Ok, Sounds like determining which to use and when is the best idea overall thank you

but I am not sure what you mean by Pyramid.. I am new to that term as far as RRR

is pyramid just the same thing I talked about before?

do you have a link to how to set up a pyramid RRR?


Thanks!
Oh right. You really are green. It's adding positions to a winner. Averaging up. A google would surely have told you though
  • Post #99
  • Quote
  • Edited 5:57am Dec 4, 2010 5:43am | Edited 5:57am
Quoting tex
Hello at all,

i ve just finished reading smjones journal in the recycle bin regarding his modified Parrondo's_paradox system.

Too bad he stopped the journal. The results looked great.

I am wondering if he is still using it ?

http://www.forexfactory.com/showthread.php?t=106515
Yes, I still use it, but not with Metatrader. I do not trade anything seriously with MT4.

I had it sent to the bin, because I do not want to support the journal, as it served it's purpose and I saw nothing more to add to it.I will not respond to questions about it in the journal, as I consider it finished. Please bear in mind though, this is a modified method and not really a Parrondo paradox algorithm in the strict sense. I do not believe that the formula as written will work in financial markets. And even then, if you think about it, even Parrondo's own formula is not really a paradox, it just empirically appears to be one.
that is very cool that you still use it.

it's stuff like this which makes me feel like my brain is made of concrete. i can't wrap my head around some of the stuff you money-milking guys manage to pull-off.

kudos.
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