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Thinking Outside the Box!?!

  • #281
  • May 26, 2011 5:13am May 26, 2011 5:13am
Quoting Monroe
My advice to anyone is definitely use a news feed if you're trading intraday. You don't have to look at 1000 things. I look at a few things before the sessions and then I'm only waiting for my trades and have a news feed up... simple.

Not saying you can't do without it though.

The problem with news is it's a "fickle" crowd and depending on how things are worded --- if you're not in the know to know what or how a certain word or phrase is interpreted... IE Bernanke opens his mouth or even Greenspan for that matter... the news itself probably won't do you much good.

Not saying that I don't occasionally look at the news if I see a big spike or something. If news works for ya though more power to ya. For me it just stirs the FX pot.

With that said, I personally think news is more inside the box, because there is a good amount of pros out there that think you need it to trade successfully.
  • #282
  • May 26, 2011 5:33am May 26, 2011 5:33am
Quoting jag1966
In the interests of pointing some of you in the right direction I would just like to add, forex CAN be be traded using a systematic approach, almost 100% mechanically with just a tiny look at major/longer term fundis (monthly).

My point is if you CLOSE your mind to possibilities you are doing yourselves a great dis service. KEEP AN OPEN MIND.
Yes, exactly.... this is directly related to your EGO. It is an emotion and can get you into more trouble than you realize.

Example: I know I'm right, I'm never wrong... therefore I am always right. I never lose... not even a single trade ever! I am the FX wizard... and so on. Control your ego --- leave him inside the box with all the other trash.

There are multiple ways to skin a cat. To look from things out side the box you don't or I should say shouldn't focus on only 1 way to skin the cat.

If the cat does this then I skin him this way....

If the cat does that then I skin him this way....

You do this because you don't want the cat to scratch you or bite you. (this is not to mean I have skinned any cats, so don't beat me... it's an analogy or parable if you will... maybe a poor one but oh well it's early)

There can be multiple things you employ this way. You could consider them "reactionary" methods. The more fluid it is the better your chances of not being discovered.

Think in terms of 3D..... the herd is looking at the market in 1 dimension. You are outside the box when you look at it in 3D, because you see the box.... rather than just talking about it.
  • #283
  • May 26, 2011 5:58am May 26, 2011 5:58am
Quoting pip_seeker
The problem with news is it's a "fickle" crowd and depending on how things are worded --- if you're not in the know to know what or how a certain word or phrase is interpreted... IE Bernanke opens his mouth or even Greenspan for that matter... the news itself probably won't do you much good.

Not saying that I don't occasionally look at the news if I see a big spike or something. If news works for ya though more power to ya. For me it just stirs the FX pot.

With that said, I personally think news is more inside the box, because there...
Looking at the news after you see a big spike is not what I'm talking about, I think you're implying a news event... which is a different then what I am talking about, although I have a strategy for that as well.

I trade news for very short term trades that are not spikes, they are things that change perceptions and expectations of market movers, and as a result cause order flow. sometimes for long periods, sometimes for shorter periods, they are not priced in immediatly, nor are they whipsaws as a result of priced in data and illiquid markets around news events.

Thinking trading news is inside the box because pro's think they need it doesn't make any sense to me whatsoever. It's the pro's that move the markets (pro's as in institutions, banks, very large speculators) and they don't put million/billions of dollars on the line because of charts alone no matter if you can or can't trade profitably using just a chart.


For me inside the box is just having a rigid mentality while looking at the markets. simple as that...
  • #284
  • May 26, 2011 6:09am May 26, 2011 6:09am
Quoting pip_seeker
Yes, exactly.... this is directly related to your EGO. It is an emotion and can get you into more trouble than you realize.

Example: I know I'm right, I'm never wrong... therefore I am always right. I never lose... not even a single trade ever! I am the FX wizard... and so on. Control your ego --- leave him inside the box with all the other trash.

There are multiple ways to skin a cat. To look from things out side the box you don't or I should say shouldn't focus on only 1 way to skin the cat.

If the cat does this then I skin him this way.......

i just want to say that i, personally, find this post to be fairly intellectually offensive. a lot of fluff, and little content. the way it reads to me is along the same lines as saying that the next time i see someone who is cut and bleeding i should tell them to simply stop bleeding. just stop bleeding.

Quote
Think in terms of 3D..... the herd is looking at the market in 1 dimension. You are outside the box when you look at it in 3D, because you see the box.... rather than just talking about it.

wow. that's as helpful as punching me in the face. i should think in terms of 3D? it's easy to say this when you know what the fuck you are talking about. colour-blind people should simply see in colour, right? dumb people should be smarter?

you can't expect someone who is missing a leg to just walk it off like nothing is wrong. they need a little more help than "think in fucking 3D"!

Congratulations ScalaFX for coming out of the closet!
  • #285
  • May 26, 2011 6:10am May 26, 2011 6:10am
Someone I kept in touch with shared (some of) the following thoughts with me:

1. Trend/Range = 90% outcome, simply more erronous chartist drivel, wrong path!

Part of any successful technique will incorperate it's own inbuilt risk management, therefore no need for stops, another sucker play!

2. Charts = Past History therefore 90% outcome

Virtually anything beyond basic advice on blogs is an example of the blind leading the blind who are just cannon fodder for the professionals.

The markets are a battle ground, one of the most important weapons you require in your arsenal is accurate information ( I'm not talking about tips), if you know where to look the professional will always tip their hand but by the time this is reflected in the charts more often than not the low risk opportunity is gone leaving you fumbling around with the 90% (high risk low reward).
  • #286
  • May 26, 2011 6:20am May 26, 2011 6:20am
Quoting xXTrizzleXx
Here's something that was recommended to me a while back by a fellow trader:

'Try to see if you can come up with a trade such that it is won before it is placed.'

If you're not willing to consider the possibility that such trades exist, then you're not thinking outside of the box. If you can identify such situations, then I'm quite sure you have a robust working idea, whose only shortcomings will be:
[list][*]you; your inability to correctly identify such situations and;[*]the inability to account for unexpected/shock...

Not to down play some of the great content added already.. but this post stands out to me.. the more and more I try to break down the markets I forget that yes I am trading a market... it starts looking like a video game or something.. thats probably true for most the losing traders as well..
  • #287
  • May 26, 2011 6:27am May 26, 2011 6:27am
Quoting pip_seeker
The problem with news is it's a "fickle" crowd and depending on how things are worded --- if you're not in the know to know what or how a certain word or phrase is interpreted... IE Bernanke opens his mouth or even Greenspan for that matter... the news itself probably won't do you much good.
I agree with Monroe's response to this.

We don't seek to "analyze" the news or any of that. We simply need to be aware of their serious short-term orderflow implications.

Also this:

"news is more inside the box, because there is a good amount of pros out there that think you need it to trade successfully"

makes no sense to me either.

Quoting Pipalicious
The markets are a battle ground, one of the most important weapons you require in your arsenal is accurate information ( I'm not talking about tips), if you know where to look the professional will always tip their hand but by the time this is reflected in the charts more often than not the low risk opportunity is gone leaving you fumbling around with the 90% (high risk low reward).
My point exactly.
  • #288
  • May 26, 2011 7:02am May 26, 2011 7:02am
Quoting Marv
"news is more inside the box, because there is a good amount of pros out there that think you need it to trade successfully"

makes no sense to me either.
To elaborate a bit more on this, I don't care if something is deemed "inside the box" or "outside the box" (the subjectivity of such terms is already evidenced by the variety of interpretations in this thread). If it's something that enough market movers are looking at, then I'll look at it too. Why? Because it's one more piece to the puzzle of attempting to read their minds, which, to me, is the ultimate goal. You see, no matter what happens to the market, there will always be an elite, a small percentage of market participants who actually move price (and movement is all we're trading, right?). It doesn't matter where *I* consider as "cheap to buy" (I fully acknowledge that such "opinion" and analysis of mine wouldn't mean shit since I'm not the one with the big money, you need to trade with no ego), what matters instead is where they might consider as "cheap to buy" and rush to concentrate their orders. Just an example.

I just happened to find that most of the useless approaches are the most popular out here, and most of the actually useful mindsets are barely ever discussed, which makes it "outside the box", I guess?

As I said, it's an information game and, in my humble view, stepping outside the box = Doing the best you can to position yourself in the real realtime of information flow. By "information" I'm not simply talking about the news or quotes or charts, but the realtime invisible money-flow and realtime motives behind all of that, not some after-the-fact manifestation. To explain even further, "realtime" is not a recent move on your chart or the current bid/ask quote, it's where the big orders are currently placed and/or about to be placed.

If you see the trend, if you see the move, chances are you're too late (i.e. chances are the orders where already filled and about to be closed).
  • #289
  • May 26, 2011 7:12am May 26, 2011 7:12am
Why do most assume that thinking inside the box is not profitable, but outside is?

Market making is as old as the markets, but it is still profitable and will continue being so as long as markets exists. Of course, the methods change, but the basic principle is the same: provide liquidity and be rewarded for that.

Thinking outside the box can open new avenues, like the guys who first did dispersion trading. But eventually the method leaks and everybody starts doing it. Then you need to do it better then the rest to profit. But that's just engineering work.

I starting working on a second system that might pass as being outside the box - trading against FF sentiment (not the simplified one linked on the left). But it's not outside the professionals box. In fact I read about these things from their papers. What is outside the box for retail can be inside for professionals.
  • #290
  • May 26, 2011 7:21am May 26, 2011 7:21am
You guys really piss me off when you start going into if something is inside or outside the box..

for me just attempting to think about the market in this thread is "out of the box" in all aspects as the majority inside the box don't consider any higher level of thought (example: no care as to what there indicators are measuring)

Quoting Marv
To elaborate a bit more on this, I don't care if something is deemed...
I believe Marv has made references to how this is an information game in the past but this sums up a lot of good points
  • #291
  • May 26, 2011 7:22am May 26, 2011 7:22am
Quoting Adal
I starting working on a second system that might pass as being outside the box - trading against FF sentiment (not the simplified one linked on the left). But it's not outside the professionals box. In fact I read about these things from their papers. What is outside the box for retail can be inside for professionals.
what papers are these? do you have a link? I can't see professionals giving a rats ass about FF or retail sentiment... but I am curious...
  • #292
  • Edited 7:32am May 26, 2011 7:30am | Edited 7:32am
Quoting Marv
what matters instead is where they might consider as "cheap to buy" and rush to concentrate their orders. Just an example.

If you see the trend, if you see the move, chances are you're too late (i.e. chances are the orders where already filled and about to be closed).
Supply and Demand in its most simplest terms?

Imbalances in S & D create the trends.

I get carried away looking at all sorts of options (not option trading...) and ideas, to end up back at the beginning...

1) Markets are based on supply and demand.

If Phil 'knows' there is inmense demand for the new iphone 4 (or watever...).

And he also knows theres a limited quantity/supply to be sold, then he knows people will pay what he asks for.

A market is a market. S/D is S/D.

back to basics i guess hehe

EDIT: Phil is the big player lol. Hes the man!!
  • #293
  • May 26, 2011 7:31am May 26, 2011 7:31am
Quoting Monroe
what papers are these? do you have a link? I can't see professionals giving a rats ass about FF or retail sentiment... but I am curious...
I will provide the paper link in one month, after I finish the first phase. Linking it now has a high risk of compromising my operation. You will understand in one month why.

Retail forex accounts for 10% of the market. That's more than C, GS or JPM.

And about sentiment:
http://www.newscientist.com/blogs/on...und-launc.html
http://correlate.googlelabs.com/sear...rice&t=weekly#

Sentiment is order-flow. People trade what people talk about.
  • #294
  • May 26, 2011 7:40am May 26, 2011 7:40am
Quoting Adal
I will provide the paper link in one month, after I finish the first phase. Linking it now has a high risk of compromising my operation. You will understand in one month why.

Retail forex accounts for 10% of the market. That's more than C, GS or JPM.

And about sentiment:
http://www.newscientist.com/blogs/on...und-launc.html
http://correlate.googlelabs.com/sear...rice&t=weekly#

Sentiment is order-flow. People trade what people talk about.
Fair enough.

I don't know about those figures... and also retail traders are all over the place so it still seems useless to me even if they are 10%.
  • #295
  • May 26, 2011 8:14am May 26, 2011 8:14am
Quoting Monroe
I don't know about those figures... and also retail traders are all over the place so it still seems useless to me even if they are 10%.
You forgot that forex is a zero-sum game. Spot market is $1.5T. Thus retail is $150B. If retail in aggregate loses 1% of it's account each day, that would be $1.5B daily profit for the other side(s).

But more importantly, retail is the weak hand at the table. Always over-leveraged and easy to push around when they concentrate too much (excessive sentiment or stop hunting).
  • #296
  • May 26, 2011 8:21am May 26, 2011 8:21am
just some crap i want to put out there to bring some perspective, or rather, my perspective and issues...

trading is like a rorschach test. everyone sees things differently. many might still see a butterfly, but with differing spins on the specifics. others might see a horse. others might see their mother.

it's not that we all can't see the damn ink on the paper, it's the way we are perceiving this ink. you see one thing, yet i see something entirely different or nothing at all but mess.

the old axioms of follow the trend and watch support and resistance zones just DOES NOT CUT IT.

you take any trend and i will show you another trend within it and another trend surrounding it of the opposite direction. you take any support/resistance that held and i will show you where it didn't hold.

you make a play supposedly with the trend, and you get caught on a reversal. ok, so instead you take a reversion to mean perspective and make plays against the trend, but instead now the trend holds.

you make a play away from a s/r but it doesn't hold, so instead you attack s/r zones and now they do hold.

either way you play it you will get caught-out just as much as you don't. actually, you will get caught-out more times than not.

apart from the absolute extremes of prices ever touched all other prices have had multiple touches at one point or another. every price level that has been a s/r has also been a part of a trend that momentum went right through without even a goodbye cuddle and kiss.

it's all the same type of mental masturbation as the whole "what stoploss and takeprofit amounts should i use?". there clearly isn't an answer to it because any way you cut it you will still get shafted in the end. s/r, trends, pivots, etc etc etc just does not work... it's that EXTRA thing, that somehow differing perspective or understanding or knowledge or whatever that makes the difference and brings in the money instead of perpetual failure.

those who are actually carving a profit from this game are seeing something that the rest are not. they might be making the same types of plays as everyone else, but there is a fundamental difference between the winners and losers.

thinking outside of the box, for me, isn't about making some stupid system based on something absurd like which way a donkey sleeps at night. thinking outside of the box, for me, is about that extra degree of understanding that is lacking. it is that level of thinking or perception above what is sitting in front of everyone's face.

thinking outside of the box, for me, is seeing the dollars in the rorschach test instead of the mess that everyone else sees. it is absolutely also about seeing the dollars in the rorschach test when others are seeing all kinds of goddamn ridiculous rubbish that makes no sense to anyone with half a brain.
Congratulations ScalaFX for coming out of the closet!
  • #297
  • May 26, 2011 8:33am May 26, 2011 8:33am
Quoting Adal
But more importantly, retail is the weak hand at the table. Always over-leveraged and easy to push around when they concentrate too much (excessive sentiment or stop hunting).
No sir Adal, I did not forget.

I agree with the second part of your statement, no argument there. I was just saying looking at 10% of the retail market where strategies vary so greatly, it doesn't make much sense. If we are talking about concentrations of retail orders, thats a different story, and they may very well be used for liquidity, but it's not just retail. If retail left the market, I don't think things would change much at all.
  • #298
  • May 26, 2011 8:39am May 26, 2011 8:39am
further to my last post :

it's also important to remember that as much as some of you might be seeing something that the rest of us aren't it is entirely possible that others never will see what you see.

you can't explain a math problem to me in chinese or arabic. it has to be in english, but it also has to be in such a way that resonates with me.

that's a barrier for everyone right there. again, we all see different things and also relate different ideas in differing ways. one person explains gravity in a scientific way, and another person simply throws a rock in the air and says watch this. both are right, but both are worlds apart in their delivery and perspective.

this game is hard.
Congratulations ScalaFX for coming out of the closet!
  • #299
  • May 26, 2011 8:56am May 26, 2011 8:56am
Quoting nubcake
further to my last post :

it's also important to remember that as much as some of you might be seeing something that the rest of us aren't it is entirely possible that others never will see what you see.

you can't explain a math problem to me in chinese or arabic. it has to be in english, but it also has to be in such a way that resonates with me.

that's a barrier for everyone right there. again, we all see different things and also relate different ideas in differing ways. one person explains gravity in a scientific way, and another person...
Yes but what if you were given a system that said go long when the price is above a 100 level and has minimum 75 pips to the next 100 level, be conservative and target the next 80 level NOT the next 100, put a stop 30 pips below the trigger 100 level.

Everyone in our group will see those levels, entries, targets and stops. It is a mechanical system.

Over simplistic I know but then add loads of other rules that are necessary, time of day, higher timeframe analysis and a thorough understanding of what the big money are trying to do to each other.

It is a system, it will have losses but the rules and win rate will give you confidence to hold trades through the dealers games.
  • #300
  • May 26, 2011 9:06am May 26, 2011 9:06am
Quoting jag1966
Yes but what if you were given a system that said go long when the price is above a 100 level and has minimum 75 pips to the next 100 level, be conservative and target the next 80 level NOT the next 100, put a stop 30 pips below the trigger 100 level.

Everyone in our group will see those levels, entries, targets and stops. It is a mechanical system.

Over simplistic I know but then add loads of other rules that are necessary, time of day, higher timeframe analysis and a thorough understanding of what the big money are trying to do to each...
Yes it can work, the rules are the important part... threads like James16 s/r PA for example can work, they try and make it simple, though it requires time and discipline. When I look at it, I know it involves lots of stuff that are in the rules which don't require you to have a phD understanding of on a deep level, but they are there for a reason. Time of day, and other market structure/micro-structure stuff is in there...

though, I would argue it is not mechanical 100%, it certainly requires discretion, I don't believe there is a system 100% mechanical that will last in the long run, but thats just how I see it.
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