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Thinking Outside the Box!?!

  • #421
  • May 29, 2011 7:02am May 29, 2011 7:02am
Quoting Pipalicious
PS: just read this and im talking crap, still a bit pised from last night. just ignore it.
count me as the same, minus the alcohol aspect. i'm just spinning text while watching tv. don't have the drive at this time to actually stick my face into a chart and haven't for a few days. just can't do it.
Congratulations ScalaFX for coming out of the closet!
  • #422
  • May 29, 2011 7:31am May 29, 2011 7:31am
Quoting nubcake
pip_seeker part 1 : watched the number 23 today. admittedly i'm still quite sleep-deprived, but i found it entertaining at least. if i had to correlate it to fx i'd say that the entire skunny fib thread is a great partner to this movie. you could also say that new trading students often search for the inner-secret codes within markets... but that's not to say that there isn't an underlying degree of order to the markets that can be exploited, there has to be else no one would truly be 'making' money and they would simply be 'winning' money.
I figured you would find it entertaining and you did catch the meaning..."trading students often search." They would have never discovered so many calculations of "23" if they did nothing. FX is pretty much the same way. Do nothing and you will find nothing. Say everything is irrelevant and it is. The point is keep thinking, keep challenging yourself.


Quoting nubcake
pip_seeker part 2 : you have misunderstood my faith statement, but as per above with sauron i can't always express to the degree necessary what i want to say. wins, losses, bigger wins than others, bigger losses than others, streaks of either... these things don't concern me more than they should. what concerns me is trading behaviors such as not using stoplosses or drawing lines on my screen expecting them to have meaning and so on or trading fib lines as an example. interestingly, i'm not one to say that s/r trading isn't viable as jag puts it...
Not using stops, using stops, drawing lines or not drawing lines... everyone has their own methodology in how they trade. None of it is wrong if you are profitable. If it's not profitable only the person losing is the biggest dufas.

Using stops - broadcast your vulnerability
not using stops - risk ruin of account
draw lines - shade or fade
no lines - candles or moonlight

You could search the world over and never find nothing. Remember what I said when you boil everything away all you have is risk. Find the risk you can live with and trade. All that matters is that you are profitable. Rhyme and reason doesn't matter. If you want a guarantee go to your local bank and open a CD, but don't complain when inflation eats you for lunch.

It always comes back to the same thing... risk. You can try to run from it, make excuses that you can't explain yourself whatever. I am in the business of reading people as FX is not my main profession. It's a hobby of mine that will likely grow into more as time goes on.

I am a profectionist when it comes to pretty much anything I do outside of FX. In FX I have come to realize perfection is profitability. The rest doesn't matter.


Quoting nubcake
i suppose another way to spin it is to say that an underlying story is applied to the movements of a market by each trader. some are following the correct story and others are taking guesses and getting it wrong. no one wants to blindly follow rules if they don't make sense and don't have a "why" factor. knowing why something is or is not true is a step in the right direction and one less "faith" factor.
no one knows how something will turn out before it does, some may say they do but this is a complete lie. Not even a central bank can control where the market goes if enough participants ganged up on a currency. The main motivation of a central bank is playing off emotions... just the threat of intervention scares people to change their behavior.

In the end every trade is a guess... because if it wasn't you would never have a loss. But if you go by statistics and you know from previous results that 75% of the time you are right it wouldn't appear so much as a guess now would it?


Quoting nubcake
that's my take on the point of this whole thread. we can all make up stories and throw nonsense at a chart. not everyone can squint the right way and see the dollar signs hiding right there on the chart.
Not without looking and searching. You can't find the number 23 in anything without looking for it. Remember big discoveries are often made by accident. I can attest to that 1000%... I wouldn't be where I am today without looking and making mistakes I made along the way.
  • #423
  • Edited 11:24am May 29, 2011 10:09am | Edited 11:24am
Quoting pip_seeker
The point is keep thinking, keep challenging yourself.
i do. it's on my mind too much sometimes *twitch*.

Quote
Find the risk you can live with and trade. All that matters is that you are profitable. Rhyme and reason doesn't matter. If you want a guarantee go to your local bank and open a CD, but don't complain when inflation eats you for lunch.
that seems awfully conflicting. trading without reason but making profits is basing profits on the unknown, isn't it? doesn't one need to know where there profits come from to ensure that they continue to generate profits and continue to replicate the positive results as time goes on?


Quote
no one knows how something will turn out before it does, some may say they do but this is a complete lie.
Quote
In the end every trade is a guess... because if it wasn't you would never have a loss. But if you go by statistics and you know from previous results that 75% of the time you are right it wouldn't appear so much as a guess now would it?
but surely those who claim an edge will at least be able to explain it (even if only to themselves) and know why over time it will make coin. whether it be a particular bar pattern, or magical fish-eye MA cross pointing to the moon, etc. there must be a rhyme or reason to pull the trigger, but am i wrong to think that why this rhyme or reason exists is (EDIT) NOT (/EDIT) some unknown factor... that is to say, do you think some people have an edge that they don't fully understand and / or appreciate why this apparent edge exists?
Congratulations ScalaFX for coming out of the closet!
  • #424
  • May 29, 2011 10:55am May 29, 2011 10:55am
Quoting Sauron
What I like about the conversation between Trizzle and Jag is that Trizzle waits for the price to reach a S/R level before a trade but doesn't find the approach of Jag to be rational. I'm always asking myself, if Trizzle fundamentally analyses 2 currencies and decides on a direction, why waiting?
Hi there, Sauron,

I am not a practitioner of S/R nor am I a Fundamental Analyst. However if I were to obtain information, and can draw from it the conclusion that it will motivate enough participants to trade, then I will embrace the outcome risk and enter a position immediately whether it be on MT4 if I'm at home, or on my phone if I'm at school. Like you said, why wait? The speed of processing the information is absolutely critical to me, as sometimes price shoots off and never looks back for hundreds of pips. My analysis will be graded based on the PnL of this feeder stake, and if I like what I see, I begin to monitor and add along to the trade to milk the move, at what I deem to be low-risk opportunities.

Quote
There's also the problem of why somebody wins a trade. If based on price action around S/R jag wins in average 8 from 10 he actually has a good reason to continue trading in this way.
Like I said, jag1966, obviously has a way of trading that works, and more importantly suits him. So I agree with this point here.

Quote
But if Trizzle fundamentally analyses and then waits for S/T to minimize the risk, he doesn't know why he wins: is it because the price usually reverses around S/R or because the big money used the same analysis?
Seeing as I don't use or define S/R to be a low-risk entry point in my trading, my experience strongly supports the latter reasoning. Is it correct? Who knows? It works, and it suits me because I know why each of my trades work out as they do.

Quoting nubcake
but surely those who claim an edge will at least be able to explain it (even if only to themselves) and know why over time it will make coin. whether it be a particular bar pattern, or magical fish-eye MA cross pointing to the moon, etc. there must be a rhyme or reason to pull the trigger, but am i wrong to think that why this rhyme or reason exists is some unknown factor... that is to say, do you think some people have an edge that they don't fully understand and / or appreciate why this apparent edge exists?
Quoting nubcake
i suppose another way to spin it is to say that an underlying story is applied to the movements of a market by each trader. some are following the correct story and others are taking guesses and getting it wrong. no one wants to blindly follow rules if they don't make sense and don't have a "why" factor. knowing why something is or is not true is a step in the right direction and one less "faith" factor.
I like these quotes, and share your sentiments here. It's like in the Florida Orange Juice example I gave.

 

  1. One individual can happen to go long based on expectations of a shortage due to the hurricane, and will manage the position in relation to these factors.
  2. Another individual goes long at the bounce from a support, and exits/goes short at the next resistance.


What they have in common is that they are placing trades according to how they believe the markets to be moved.

I don't want to come off as my way being the only way, or comparing one method of trading to another - to each his own. That was not my intention of the direction of this discussion, which is bordering on the point of circular now - we are getting nowhere.

Perhaps we should just resume helping others to 'think outside of the box'...maybe there's more to it than just TA or FA?

Just a suggestion,
xXTrizzleXx

  • #425
  • Edited 4:49pm May 29, 2011 11:10am | Edited 4:49pm
For a pure chartist S/R is the best tool that you have. It does work for the simple reason that S/R provides reference points for future trades to be made. Limit orders get placed on them. Market orders get entered into them. S/R is where the bulls and the bears draw their lines in the sand. Cross the line and you run into market orders and limit orders. If price is going to reverse or break it's going to do it at those S/R lines. S/R is an important tool and I think it should be placed in every traders tool box.

It's just ONE tool though. You have a powerful brain. Why not take it and dedicate it to understanding the dynamic relationships that make up the foreign exchange market. Analyze them and extract probabilistic knowledge from it. Too many traders write off news, wires, and fundamentals. Your brain is wired to process information. Fuck analysis paralysis analyze EVERYTHING. I analyze the chart, I analyze the wires, I analyze news releases, I analyze fundamental economic factors, I analyze sentiment, Then I analyze how all these factors will work out with each other. As a result I have a very clear picture of how the market played out. All you have is some lines on a chart. I can tell you that there was corporate buying interest and middle eastern banks protecting your S/R line. I can tell you that the false break out was because sentiment was weak and was used as an opportunity to take stops out. I can tell you what the huge 500 pip drop was caused by. All you can say is "Looks like S/R held @ 1.3500, Oh I caught a runner!"

Does it take a while? Yes. Is it easy? Fuck no. That doesn't matter though cause it's fun as hell. Find out what's meaningful and what's useless. If you search long enough and hard enough you WILL start to find these things. You will understand how these dynamic relationships play themselves out again and again and again.

With that said I do believe that you can be profitable trading purely S/R. After all, I am a lifetime J16 member. The definition of technical analysis is to take advantage of reoccurring patterns. They do occur. It's just ONE edge though.
Cautiously optimistic. . .
  • #426
  • May 29, 2011 11:15am May 29, 2011 11:15am
here are my thoughts on different systems, methods and approaches to trading

what's 4 + 4?
  • #427
  • May 29, 2011 11:17am May 29, 2011 11:17am
Quoting Tact1cal
For a pure chartist S/R is the best tool that you have. It does work for the simple reason that S/R provides reference points for future trades to be made. Limit orders get placed on them. Market orders get entered into them. S/R is where the bulls and the bears draw their lines in the sand. Cross the line and you run into market orders and limit orders. If price is going to reverse or break it's going to do it at those S/R lines. S/R is an important tool and I think it should be placed every traders tool box.

It's just ONE tool though. You have...
My goodness. +999 If this isn't out-of-the-box thinking then I don't know what is. Excellent post Tact1cal.

Regards,
xXTrizzleXx
  • #428
  • May 29, 2011 11:38am May 29, 2011 11:38am
Quoting newyear498
here are my thoughts on different systems, methods and approaches to trading

what's 4 + 4?
i have a feeling you are expecting an answer like :

2^3
16/2
23 - 15

and so on...
Congratulations ScalaFX for coming out of the closet!
  • #429
  • May 29, 2011 11:46am May 29, 2011 11:46am
Quoting nubcake
i have a feeling you are expecting an answer like :

2^3
16/2
23 - 15

and so on...
If this is what the OP is trying to get at, then...what's the point of thinking outside the box?

Surely he does not think all trading approaches are equal..because if he does..he's still stuck in said box after all this time...

Perhaps a box within a box? Like a Russian stacking doll?

Regards,
xXTrizzleXx
  • #430
  • May 29, 2011 11:48am May 29, 2011 11:48am
Quoting nubcake
i have a feeling you are expecting an answer like :

2^3
16/2
23 - 15

and so on...
no but that works sorta you thought more out the box then I did..

trying to demonstrate everyone has different methods.. some count on fingers, some use paper/equation.. some use a calculator..

several methods can get the same answer and some methods will get the wrong answer etc..

I just feel like people bicker on and on.. my point being STFU with the "my method is better then yours.. not uhhh.. my methods is..) and move on... ROFL

  • #431
  • May 29, 2011 12:04pm May 29, 2011 12:04pm
Quoting newyear498
I just feel like people bicker on and on.. my point being STFU with the "my method is better then yours.. not uhhh.. my methods is..) and move on... ROFL

i must be more tired than i realize. i actually haven't noticed any bickering at all in this thread.
Congratulations ScalaFX for coming out of the closet!
  • #432
  • May 29, 2011 12:09pm May 29, 2011 12:09pm
Quoting nubcake
i must be more tired than i realize. i actually haven't noticed any bickering at all in this thread.
or it could simply be our perceptions differ as do many in the forex realm..

to me I felt like I had a Christian, a Muslim, and a Jew all trying to convert the other to their way of worship


  • #433
  • May 29, 2011 1:11pm May 29, 2011 1:11pm
Quoting nubcake
that seems awfully conflicting. trading without reason but making profits is basing profits on the unknown, isn't it? doesn't one need to know where there profits come from to ensure that they continue to generate profits and continue to replicate the positive results as time goes on?
I also think edges need to be understood. If you don't know why your method is making you money, then your profits will only be short-lived. The method needs to make sense.

Quoting Tact1cal
For a pure chartist S/R is the best tool that you have. It does work for the simple reason that S/R provides reference points for future trades to be made. Limit orders get placed on them. Market orders get entered into them. S/R is where the bulls and the bears draw their lines in the sand. Cross the line and you run into market orders and limit orders. If price is going to reverse or break it's going to do it at those S/R lines. S/R is an important tool and I think it should be placed in every traders tool box.
Awesome post about using a range of tools. The strength of technical analysis is that you have a pre-defined exit point (stop loss) (you know when you are wrong). That is pretty hard to find when you only rely on let's say fundamental analysis, cause then you will only know that you are wrong when you are already deeply in the red. Combining all kinds of approaches is I think a good approach in itself.
  • #434
  • May 29, 2011 1:13pm May 29, 2011 1:13pm
this is just getting pointless folks...

im going back to my dart board and tight risk management
  • #435
  • May 29, 2011 1:24pm May 29, 2011 1:24pm
Quoting Pipalicious
this is just getting pointless folks...

im going back to my dart board and tight risk management
perhaps your box, and suspiciously my box, are partially due to the tools on hand that are being used? i'm aware of some mt4 backtesting limitations that i have yet to overcome which might be creating very large blind spots for me and my simulations. i can't yet see a way to overcome these particular limitations without simply rolling an entirely new application designed to sim, and i really don't like that idea and the amount of coding involved
Congratulations ScalaFX for coming out of the closet!
  • #436
  • May 29, 2011 1:34pm May 29, 2011 1:34pm
Everyone has heard about the advantages of diversifying your portfolio with various instruments..... currency, petroleum, equities, etc. etc.

How about choosing one instrument and diversifying your strategies.
Take a single pair like the EUR/USD because of it's liquidity, tight spread, and trendiness and apply multiple strategies to it.....

Just some food for thought.
  • #437
  • May 29, 2011 3:37pm May 29, 2011 3:37pm
Quoting Pipalicious
In the end, everyone trades their own way that makes sense to them, be it trends, ranges, continuation, fading, name it what you want,...fundies, techies,.....on and on....

But the reality of the matter, is that any market, whatever it may be, is based on nothing more than supply and demand.

Each person interprets this in their own way or describes it with 'cool trendy' words.

If one knows the 'why' he has an understanding about what is going on.

If one where to trade a random line then by no means does he/she know 'why' it works...
Made perfect sense to me.

Make a framework to trade to, then analyse why it wins and fails, keep improving the framework.
  • #438
  • May 29, 2011 3:43pm May 29, 2011 3:43pm
Quoting Tact1cal
For a pure chartist S/R is the best tool that you have. It does work for the simple reason that S/R provides reference points for future trades to be made. Limit orders get placed on them. Market orders get entered into them. S/R is where the bulls and the bears draw their lines in the sand. Cross the line and you run into market orders and limit orders. If price is going to reverse or break it's going to do it at those S/R lines. S/R is an important tool and I think it should be placed in every traders tool box.

It's just ONE tool though. You...
Great post, thanks.
  • #439
  • May 29, 2011 3:47pm May 29, 2011 3:47pm
Quoting nubcake
i must be more tired than i realize. i actually haven't noticed any bickering at all in this thread.
I agree, no bickering, very good discussion.

Thanks.
  • #440
  • May 29, 2011 5:11pm May 29, 2011 5:11pm
The way I see it.. is support and resistance indicate lack of liquidity
(which is either in these areas constantly or simply at a given time)

due to the lack of liquidity price cannot stay in these areas for long.. any indication of price hanging around at previous support and resistance would indicate a change in liquidity for those area's compared to its past.. otherwise these supports and resistances would continue to hold true

now if you look at the areas between these supports and resistances you would find the highest levels of liquidity this is where price is hanging in these areas more often then not... if price begins moving away from these areas then its a sign liquidity is drying up in these areas..

but an easier approach might just be to stop drawing support and resistance lines and just looking at where price wants to hang around and where price does not want to hang around.. thats my approach personally.

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