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Why exactly do EMA crossover systems not work?

  • #181
  • Jul 16, 2011 8:47pm Jul 16, 2011 8:47pm
Quoting ha-pattern
Sorry, no, you miss my point (which Crucialpoint understood well enough.)
Another way to say it:
Each bar has a distinct position in relation to every other bar, such that groups of bars follow pivotal bars that all align to create the next chart move.
If you simply treat every bar -- tick or otherwise -- like the last one serially, then the chart study ignores position.

One can argue there is an infinite number of groups of bars to which a bar can have the definition of its position changed, and thus one can treat the entire price-time line as...

The next chart bar is never made from the previous 1, chart bars are random as they just reflect what happened within the time of the chart bar, change the start and end time and you'll get a different picture, no one plans to make paint chart bars intentionally to close the M15 at high or whatever.

The next chart bar is formed purely from what buys or sells over that period, and you have no way to know what they will be, a Fund could stop buying or start selling for there own reasons if so price could turn down.

Thankfully you can see when people are buying but no one is willing to sell as the price goes up to find sellers the bit inbetween you can get in and out with some profit, to keep it basic. This creates momentum.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #182
  • Jul 16, 2011 8:48pm Jul 16, 2011 8:48pm
Quoting ha-pattern
Sorry, no, you miss my point (which Crucialpoint understood well enough.)
Another way to say it:
Each bar has a distinct position in relation to every other bar, such that groups of bars follow pivotal bars that all align to create the next chart move.
If you simply treat every bar -- tick or otherwise -- like the last one serially, then the chart study ignores position.

One can argue there is an infinite number of groups of bars to which a bar can have the definition of its position changed, and thus one can treat the entire price-time line as...
I see. You're right, I missed your point, since I don't work with bars anymore, only with ticks. My charts don't change their "look" when I zoom in or out:

http://dl.dropbox.com/u/190212/ff/veloce_no_candles.png
  • #183
  • Jul 16, 2011 8:58pm Jul 16, 2011 8:58pm
Quoting ha-pattern
One can argue there is an infinite number of groups of bars to which a bar can have the definition of its position changed, and thus one can treat the entire price-time line as having bumps a ma or similar is selected/trained to read somewhat well.

I prefer to believe there is hope to discern which groups of bars most define the next bar's position.
My answer is No.

But you can simplify and classify a chart and minimize its infinite number.
You see there are really only 7 possible outcomes

 

  1. big profit
  2. medium profit
  3. small profit
  4. break even
  5. small loss
  6. medium loss
  7. big loss

or

 

  1. big move
  2. medium move
  3. small move
  4. no move
  5. (-)small move
  6. (-)medium move
  7. (-)big move

There really are no more infinite move in this scenario because we are working on a 2Dimensional plane with the "physical" charts.

What if you simply eliminate 6 and 7 trades? Your trading would take on:

 

  1. big profit / big move
  2. medium profit / medium move
  3. small profit / small move
  4. break even / no move
  5. small loss / (-) small move

This model would tilt the edge even if we are playing in pure randomness environments. And this is what the Pro means when they say: "Cut your losses."

So, why beat your head with a rock.
"....to discern which groups of bars most define the next bar's position." - ha-pattern
You can only achieve this once you have everything set in place. You are trying to invent the atomic bomb, yet you haven't even discovered magnetism yet... it's a wrong way to approach things. Again, I admire your tenacity just remember that you can go about a research the right way or the wrong way, just make sure you go about it by doing it right

  • #184
  • Jul 16, 2011 9:21pm Jul 16, 2011 9:21pm
What a tangled web...

Turveyd,
yes, of course you're right. And that's where I begin my study, to avoid all that individual-candle reading if you will.

Crucialpoint,
your leap into mm befuddles me.
I meant, reasons at the level of bars (patterns, for instance)
or used to make bars (spreads or news (at the tick (or minute) it was made)) carefully select among bars to group some of them,
while a math-enhanced ma or the like applies its reason for the chart to move through
-- and this subject of how indicators are made is beyond me, really -- variable selection, simple comparison, and lots of trial and error.

Quoting Adal
I see. You're right, I missed your point, since I don't work with bars anymore, only with ticks. My charts don't change their "look" when I zoom in or out:
Yeah, I miss zoomable tick charts. Saw 'em on Accucharts -- the ultimate. Tried MT4's separate-window tick charts, not too flexible.


Look, I wouldn't know a profit if it stared me in the face. It's just a different path of chart study I took from most, and hope others can take something from it. Or at least I get to see my approach in plain view.
  • #185
  • Jul 16, 2011 9:47pm Jul 16, 2011 9:47pm
https://lh5.googleusercontent.com/-w...tf4/s800/1.jpg


A simple noiseless chart. Resize and shrink the window horizontally. we just need to look the price pointer moves up and down.http://static.kaskus.us/images/smilies/ngakak.gif

http://static.kaskus.us/images/smili..._batamerah.gif
  • #186
  • Jul 17, 2011 9:12am Jul 17, 2011 9:12am
some observations i wouldn't mind some thoughts on...

1. traders who stick different MA's on their chart no longer trade the chart at all. rather, as soon as they stick an MA (or an RSI, or a xyzindicator) on their chart the chart virtually vanishes and they start trading the indicator alone. it seems to me that somewhere along the way traders were using indicators to describe the terrain to gauge the potential for a trade but this stopped and people started using them as signals instead, even though an indicator is unlikely ever able to signal a buy or sell and can only indicate the potential to open/close a buy or sell. if this is accurate then it'd be interesting to know when exactly this transition occurred. maybe those who first started using indicators, likely by calculating by hand, never explained to those around them the actual point of the indicator and people just saw super trader bob using a MACD and figured they'd do the same and work it out for themselves. a bit like working-out a lost language / hieroglyphics and getting it all screwed-up.

2. if (1) is how it is... then once someone has this aspect of trading aligned with reality and working in their favour they have only scratched the first layer of trading profitably and there are in fact more layers above this that most people never get to see and realize. the journey continues past indicators before profits are reached?

3. quants, in their infinite research, are essentially trying to tap into a currently curve-fitted method, and continue to adapt the curve-fit as time progresses since a statically curve-fitted method will inevitably fail at some point? is this a fair summary? quants are beyond me so i'm as naive as anyone on the topic.
Congratulations ScalaFX for coming out of the closet!
  • #187
  • Edited 10:43am Jul 17, 2011 10:26am | Edited 10:43am
Quoting Turveyd
here is a screen shot I posted on my other thread, I trade entirely of MA's and Envelopes. ( EU M15 )
.

Hi,
I too believe that price turns from a level due to being watched by major players. It may be a Moving average, an ob/os indicator, volume .. but most importantly, its liquidiity which often comes in the form of stop/ limit orders.

I do use averages, in the form of b.bands or cci.. but not for entry criteria rather as possible trade alerts while watching multiple instruments.

We may take trades based on indication from our favourite moving averges or ob/os level of oscillators.. but most importantly we must look to left on our chart, what price did when it was there last time.
Well, have a look at ur chart (shown below)


Now remove the moving averages and just look at the points/levels where ur moving average gave indication for trade.. (below ur chart)


You would be surprised to see, how many times that level is a significant support/resistance, supply/demand, stop hunting level.

Theres a nice thread 'following the big money' by srmfx. Very often our entry points are same though his trades are based upon pa and moving averages and i trade bare charts.
Its not imp. what you look.. its what you observe.

Trade well.
KS.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: System%20better%20explained.jpg Size: 457 KB
Click to Enlarge Name: eu15 6-7-11b.gif Size: 42 KB
  • #188
  • Jul 17, 2011 10:42am Jul 17, 2011 10:42am
Quoting nubcake
some observations i wouldn't mind some thoughts on...

1. traders who stick different MA's on their chart no longer trade the chart at all. rather, as soon as they stick an MA (or an RSI, or a xyzindicator) on their chart the chart virtually vanishes and they start trading the indicator alone..
hey nubcake..... the chart does not neccessarily have vanish.... but your probably correct in that, clinically speaking, anytime someone places a trade along with a stoploss and profit target with no thought of adjusting them, the chart is in a sense no longer needed....

most ever ea i run trades all pairs from a single chart.... that single chart the ea is attached to has the price bars invisible...... there are some weeks even though countless trades came and went on a particular pair not a single chart of that particular pair was ever opened...... the chart is, in this case, somewhat excess information......

only the math matters.......h
to trade and code, keep both simple... no call to impress....h
  • #189
  • Edited 11:48am Jul 17, 2011 11:07am | Edited 11:48am
Quoting King Singh
Hi,
I too believe that price turns from a level due to being watched by major players. It may be a Moving average, an ob/os indicator, volume .. but most importantly, its liquidiity which often comes in the form of stop/ limit orders.

I do use averages, in the form of b.bands or cci.. but not for entry criteria rather as possible trade alerts while watching multiple instruments.

We may take trades based on indication from our favourite moving averges or ob/os level of oscillators.. but most importantly we must look to left on our chart, what...

I agree in principal, but to be honest I need something to orientate myself against and my entry zone works so might aswell use it.

My exit method has no MA's that work for it, I've got the low/high of the Envelope and S/R and just take profits if in doubt.

SL although generally other side of my entry zone, if there is a close previous S/R then I'll slap it the other side of that and load up more lots going into that SL.

It works more so cause, at that level your SL is relatively low and your potential profit is relatively high, risk 10 to make 20+ is key to me.


Also, the EMA area lets me take the trade earlier than waiting for S/R to be visible plan is to take most pull backs with trend where the ema's been respected previously for that pair, just playing the stat's most will work!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #190
  • Jul 17, 2011 11:10am Jul 17, 2011 11:10am
Quoting hayseed

only the math matters.......h

Everything is about Math, Math's are key to beating this game!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #191
  • Jul 17, 2011 1:38pm Jul 17, 2011 1:38pm
Quoting nubcake
some observations i wouldn't mind some thoughts on...

1. traders who stick different MA's on their chart no longer trade the chart at all. rather, as soon as they stick an MA (or an RSI, or a xyzindicator) on their chart the chart virtually vanishes and they start trading the indicator alone. it seems to me that somewhere along the way traders were using indicators to describe the terrain to gauge the potential for a trade but this stopped and people started using them as signals instead, even though an indicator is unlikely ever able to signal...
yep, I had that tendency as well in the beginning. Best is to rely only on price or only rely on things that complement each other. Normally price alone should be enough.
Quoting nubcake
2. if (1) is how it is... then once someone has this aspect of trading aligned with reality and working in their favour they have only scratched the first layer of trading profitably and there are in fact more layers above this that most people never get to see and realize. the journey continues past indicators before profits are reached?
not sure if the journey is about layers. I personally saw trading in a totally different light when I started than nowadays. I would say perspective changes after a while.
Quoting nubcake
3. quants, in their infinite research, are essentially trying to tap into a currently curve-fitted method, and continue to adapt the curve-fit as time progresses since a statically curve-fitted method will inevitably fail at some point? is this a fair summary? quants are beyond me so i'm as naive as anyone on the topic.
maybe some do. But what one should actually look for are methods that are profitable with lots of different parameters across several pairs / instruments. You need a robust method which works no matter if curve-fitted or not.
  • #192
  • Edited 1:28am Jul 24, 2011 1:22am | Edited 1:28am
I will emphasize some important things when trading. Many members have failed to understand what CP wrote that because they were still in the box.

Why so CP closed his own system to anyone? Because his most important system doesn't lay on the chart, but in his own mind.

Ok, lets assume suddenly he captures his screen and upload it to this thread. I am sure 100% his chart not difference with yours, even his chart probably is more simpler than yours.

The Most of you are trapped by your own mindset. You think that the key of being successful in trading lays on the chart setup in which there are indicator, MA, etc...etc. So why I'm not amazed that many of you still going in circle.

Ok, I don't against with indicator at all. But lets try to see the price, indicator, MA, etc..etc.. in difference approach.

What CP approach is similar with all other professional traders approach and he has written his approach in his own journal and many his posts.

But in my own view, his approach is the first approach in the world that is better than the other professionals approach that ever exists.

Let me take an example:

Quoting CrucialPoint
[color=DarkRed]Any form of analysis TA, FA, Contrarian etc.. will always have a convergence/divergence movement, which is enough to wipe out your account... in a single move or a slowly gradual decreasing of your account.

Even if the sentiment is UP, price will continue to fall to a level where your account will blow. When your broker call you for a margin call and ask you to put down your house, price will continue downward to wipe your account because of some unforeseen economic catastrophe occurring.

Even if by chance you get a super...
  • #193
  • Jul 24, 2011 2:51am Jul 24, 2011 2:51am
I quote Jet Li's Movie, entitled Hero:

Quote
A Perfect swordsmanship's notion that there is neither a sword in the hands nor a dagger in the heart but a broad mind that can embrace the whole world. When you embrace the whole world, you see only friends and no enemies. When you embrace the whole universe, you forget your own life and death.
http://t2.gstatic.com/images?q=tbn:A...lAdLOXL_TyefZI
  • #194
  • Jul 24, 2011 8:32am Jul 24, 2011 8:32am
Quoting 100m
I will emphasize some important things when trading. Many members have failed to understand what CP wrote that because they were still in the box.

Why so CP closed his own system to anyone? Because his most important system doesn't lay on the chart, but in his own mind.

Ok, lets assume suddenly he captures his screen and upload it to this thread. I am sure 100% his chart not difference with yours, even his chart probably is more simpler than yours.

The Most of you are trapped by your own mindset. You think that the key of being successful in...
If profitable trading was just a function of your mind and how you control your emotions, then why are not more ea's profitable?

No matter what, you need an edge to become profitable and then apply that over and over again. No magic mind mumbojumbo.
  • #195
  • Jul 24, 2011 8:51am Jul 24, 2011 8:51am
Quoting Custos
If profitable trading was just a function of your mind and how you control your emotions, then why are not more ea's profitable?

No matter what, you need an edge to become profitable and then apply that over and over again. No magic mind mumbojumbo.

You can't teach a computer to think, yes it's good at math's and basic logic but thats about the end of it, it can't look at the market and think thats kinda weak or read what news is coming and think I'll get out or stay in.

Your best bet is to have a selection of EA's for different market conditions / setups then you go, EJ seems to be performing well with these rules, so use this EA for entry then exits use this EA ( or do that manually, exits are harder than Entrys )
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #196
  • Jul 24, 2011 9:01am Jul 24, 2011 9:01am
Quoting Turveyd
You can't teach a computer to think, yes it's good at math's and basic logic but thats about the end of it, it can't look at the market and think thats kinda weak or read what news is coming and think I'll get out or stay in.

Your best bet is to have a selection of EA's for different market conditions / setups then you go, EJ seems to be performing well with these rules, so use this EA for entry then exits use this EA ( or do that manually, exits are harder than Entrys )
it can't? strange, I thought the banks already have programs that scan for certain words in news and then take positions immediately.

why can it not look at the market and say it is kind of weak? If chf is going down across several pairs, then a mutli-pair analysis will make that obvious (which can be programmed into an ea).

It's true, there are certain things that can't be programmed, but that mostly concerns fundamental data and maybe support & resistance (even though one can come pretty close, if you give it some thought).

Well anyways, my point in my last post was that you need an edge, not some mind crap.
  • #197
  • Jul 24, 2011 10:25am Jul 24, 2011 10:25am
@Turveyd: I agree with you.


@Custos:

EA is just a tool. It needs your own adjustment to run it in their appropriate conditions - a selection market condition.

By The Good approach, you can trade with many various tools or even naked chart (there is neither a sword in the hands nor a dagger in the heart but a broad mind that can embrace the whole world)

I'll give you an example from AASAM 2011 shooting competition. It will give you an illustration how a professional sniper depends on his own skill instead of tool. The link here:
http://goodnewsfromindonesia.org/201...in-aasam-2011/
  • #198
  • Jul 24, 2011 10:47am Jul 24, 2011 10:47am
Quoting 100m
@Turveyd: I agree with you.


@Custos:

EA is just a tool. It needs your own adjustment to run it in their appropriate conditions - a selection market condition.

By The Good approach, you can trade with many various tools or even naked chart (there is neither a sword in the hands nor a dagger in the heart but a broad mind that can embrace the whole world)

I'll give you an example from AASAM 2011 shooting competition. It will give you an illustration how a professional sniper depends on his own skill instead of tool. The link here:
http://goodnewsfromindonesia.org/201...in-aasam-2011/...
yeah man, whatever, I don't make adjustments to my ea's and have been using them in all market conditions.

I don't know how one sentence about ea got into a discussion about ea's. Maybe cause you have nothing to add to the real statement of my post: You have to have an edge to be profitable not some mind mumbo jumbo.
  • #199
  • Edited 11:28am Jul 24, 2011 11:26am | Edited 11:28am
EMA was created for a purpose. But the creator never teaches you the purpose of it.

Some peoples use it for smoothing a noisy chart but there are some other peoples use the crossing of two difference value of EMAs to find an entry spot.

That's two samples of the common practice approach how to use EMA . You need to do a difference approach to find its best purpose for you.

So it's the same with other _MAs, indicator..... etc, etc.
  • #200
  • Jul 24, 2011 11:27am Jul 24, 2011 11:27am
I must admit im pretty ignorant of indicators per se and should start looking further into how they truly work (not the bs entry/exit crap).

So, can ema's (or watever) be used as a way of "classifying" market conditions?

I was curious as to this because if we break it all down into segments then this allows one to clearly see the repetitive actions/movements the markets do over and over again, be it with an ma (if possible) or even a grid/lines placed on price.

Or am I just talking crap?
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