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Where is the EDGE in trading? The most important thing in trading!

  • #381
  • Aug 10, 2011 1:28pm Aug 10, 2011 1:28pm
Quoting reres
Dont be silly. A trader trading 4 contracts would have had 320 000 max drawdown so it would blow his account.
Obviously Reres does not even know that they are 2 types of drawdowns, the first one relates directly to the trader starting capital, and then there is the maximum drawdown, which is simply the largest drop in equity from a peak to a bottom in a certain time period.

In that case and that particular backtest the $320,000 drawdown (trading 4 contracts) comes from the trader's profits, not from his own pocket (starting capital) .

Quoting reres
I dont doubt this test is sincere but it would be nice to test it until 2011 at least. To see the difference.
Well do the backtest and see for yourself, there is absolutely no significant difference as far as the profitability of this system is concerned, but I doubt you have ever performed a single backtest in your life, that's why you keep saying stuff that is simply not true.

So far you have not presented a single shred of evidence to back up your imaginary claims. And yet you keep demanding proofs from others.
  • #382
  • Aug 10, 2011 1:53pm Aug 10, 2011 1:53pm
Quoting jag1966
I traded gu short twice using NAKED CHARTS. So did two of the guys I teach.

What is it you don't understand when I say I use naked charts with NO INDICATORS?
Good call Jag1966, you used two excellent price action tools on this trade :

1: the excellent lower-high lower-low principle. This pattern must necessarily precede any potential downtrend.

2: the change of polarity principle, when support becomes resistance and vice- versa.

Plus, and this is extremely important, you waited for confirmation before pulling the trigger (the new resistance must reject any price advance to the upside)

And finally your price target had the precision of a laser beam, while still giving you a remarkable risk/reward ratio.

No doubt Jag1966, you have all the marks of a ninja trader, keep up the good work
  • #383
  • Aug 10, 2011 1:58pm Aug 10, 2011 1:58pm
Quoting AllanS
I swear to God, if playing this game threatened my family I'd ditch it in a heartbeat.
Might as well just ditch it right now then. It's not for everyone... and certainly not for the faint-hearted.
  • #384
  • Edited 3:18pm Aug 10, 2011 2:39pm | Edited 3:18pm
Quoting Price
Might as well just ditch it right now then. It's not for everyone... and certainly not for the faint-hearted.
Not necessarily Price, if you are a swing trader and only trade once or twice a month (and your stop/take profit are in place), you will be left with plenty of time to spend with your family.

Of course the hardest part is to stay away from the freaking screen while the trade is still open!
  • #385
  • Aug 10, 2011 3:03pm Aug 10, 2011 3:03pm
Reres,

I haven't followed this thread too closely since it started venturing further and further in to the absurd, so forgive me if I have missed anything important since my last visit.

I'm not sure if you saw my post here: http://www.forexfactory.com/showthre...83#post4848783

I get the impression you are confusing "shape" analysis with technical analysis. What most people on forums such as this refer to as TA, is nothing of the sort, and you are quite right that it is nonsense with no edge. But I will state again (perhaps foolishly) that TA absolutely offers an edge. Just because most people inaccurately and inappropriately refer to looking at arbitrary shapes as TA, merely means they are wrong in their understanding, not that TA doesn't work.

Take a look at this:
http://www.snb.ch/n/mmr/reference/wo...2011_04/source

That paper would suggest there is a clear edge to be gained from intra-day time periods of differing volatility just as I suggested was my own personal edge in my style of trading. This paper has concluded their results based on technical analysis, which is hopefully food for thought on not only the topic of whether TA is of any value, but also harping back to the original question as to where an edge can be found in trading.
  • #386
  • Aug 10, 2011 3:07pm Aug 10, 2011 3:07pm
Quoting Mr Breakout
...if you are a swing trader and only trade once or twice a month (and your stop/take profit are in place), you will be left with plenty of time to spend with your family.
Yes that is quite true. I think I was pointing at desire and commitment. Or, poking at it anyway.

The learning process to get to that point of well seasoned swing trader can have it's costs. And I would say this is certainly not a place to look for easy money.
  • #387
  • Aug 10, 2011 3:17pm Aug 10, 2011 3:17pm
Quoting roughtrader
the edge is only based on logic.
we only have the past time to draw conclusions from,
there is no one that can see into the future,
so we use the things that has been winning more than loosiing in the past,
and thats all we can really do and we call that an edge.
but the thing is, will it really be an edge in the future?
who knows? but atleast that is what the logic is telling us,
example, if you see a major downtrend on the chart,
the logic tells you that it probably will continue to decline,
threre is your edge but it is only based on logic,
sure,...
roughtrader, that's the point exactly. No one knows when a trend will reverse or ends
  • #388
  • Aug 10, 2011 3:56pm Aug 10, 2011 3:56pm
Quoting Price
Might as well just ditch it right now then. It's not for everyone... and certainly not for the faint-hearted.
A man who chooses his family over his trading isn't faint-hearted but good-hearted. The faint-hearted turn to trading because they can't find the strength and courage to face the difficulties of real life. Instead, they look for a magic potion, a cunning trick that conjures money from thin air. If only they were rich, they fancy, they'd be happy ever after. It's weak. It's stupid. It's doomed to fail. It's delirium fuelled by desperation. And it's a gold mine for the bucket shops.
  • #389
  • Aug 10, 2011 4:07pm Aug 10, 2011 4:07pm
Quoting AllanS
The faint-hearted turn to trading because they can't find the strength and courage to face the difficulties of real life.
Oh, is that so Doctor Freud?
  • #390
  • Aug 10, 2011 5:34pm Aug 10, 2011 5:34pm
Quoting Mr Breakout
Well do the backtest and see for yourself
I did many. Most of them dont work but some do. Still looks like gambling to me altho some long term strategies do work when backtested only.

Quote
So far you have not presented a single shred of evidence to back up your imaginary claims.
Imaginary claims?? I told you which strategies do work and which have some logic behind. They are also being used by hedge funds. You tried foolishly to dismiss them but u failed. Anyway its not important who is right and who is not. Only evidence counts and so far i havent seen anything from you which would confirm TA can be used on 1 min charts.
  • #391
  • Aug 10, 2011 5:38pm Aug 10, 2011 5:38pm
Quoting AllanS
The faint-hearted turn to trading because they can't find the strength and courage to face the difficulties of real life.
Lol. This is so wrong it couldnt be more wrong.

So what are you doing here then? Looking for strenght to face the problems of real life?
Dont be silly. Forex is business like any other business in life where you are making money. Some like to work in McDonalds, some like to be a postman yet some prefer to click few trades here and there.
  • #392
  • Aug 10, 2011 5:50pm Aug 10, 2011 5:50pm
Quoting reres
Lol. This is so wrong it couldnt be more wrong. Looking for strength to face the problems of real life? Dont be silly. Forex is business like any other business in life where you are making money. Some like to work in McDonalds, some like to be a postman yet some prefer to click few trades here and there.
Perfectly said!! I don't know about him, but I've been trading a long time and those "difficulties of real life" are still alive and well!! Wouldn't it be great, though....??
  • #393
  • Aug 10, 2011 5:59pm Aug 10, 2011 5:59pm
Like many have said before, edge is a combination of an understanding of yourself, the ebb and flows of your market, and money management.
  • #394
  • Edited 6:03pm Aug 10, 2011 6:02pm | Edited 6:03pm
Quoting reres
I did many. Most of them dont work but some do. Still looks like gambling to me altho some long term strategies do work when backtested only.

Imaginary claims?? I told you which strategies do work and which have some logic behind. They are also being used by hedge funds. You tried foolishly to dismiss them but u failed. Anyway its not important who is right and who is not. Only evidence counts and so far i havent seen anything from you which would confirm TA can be used on 1 min charts.
Reres, you keep asking for proof but you haven't given any for the strategies you claimed work. It's obvious you aren't successfully using any of those strategies for yourself, so why claim they work? I'm not saying they don't, I'm just saying it's ridiculous for you to ask for proof from everyone else when you don't furnish any yourself. Also, there are hedge funds that use technical analysis as well, so that argument doesn't really mean much. And there are a lot of hedge funds that lose money or don't make money either, so I don't think citing them like they are the all-knowing source of what makes money in forex trading makes sense either. I know several traders personally who make a higher % return with less drawdown than most of them so I don't really care what they use.

Cory
  • #395
  • Aug 10, 2011 6:12pm Aug 10, 2011 6:12pm
Quoting Cbh123
I know several traders personally who make a higher % return with less drawdown than most of them so I don't really care what they use.
U have no real arguments here. Making 1 billion on 10 billion account or making 1000 usd on 5 k account is a big difference. They cannot afford 40% drawdown just like that. So your friends can afford to gamble with some magic tools and occasionally get lucky...hedge funds cannot gamble.
  • #396
  • Aug 10, 2011 6:14pm Aug 10, 2011 6:14pm
Quoting Cbh123
Also, there are hedge funds that use technical analysis as well, so that argument doesn't really mean much.
Exactly, hedge funds use simple moving averages and classical Donchian breakout techniques to follow the trend, nothing more, just like us.
  • #397
  • Aug 10, 2011 6:32pm Aug 10, 2011 6:32pm
Quoting reres
Hehe. Alot of bitching and no valuble point at the end. You didnt say anything useful except repeat classical money managment rules. Anyone who took some online course can say that. And with money managment alone you CANNOT be profitable. You can only be profitable by having a clear defined highier probablity win to loss ratio edge.



I dont use it at all becouse it just crap. Like i said i have yet to see someone who is profitable on long term from TA alone.


It makes perfect sense to me, but again except for following big trends i dont...
I started reading this thread and only got this far. I will stop reading here and give you a simple answer to your question: yes there are many ways to achieve an "edge" in forex trading. You are currently incapable of finding and using any of them. You would not recognize an answer to your question if it fell in your lap. Arguing with people who are trying to help you is a waste of their time.
  • #398
  • Aug 10, 2011 6:41pm Aug 10, 2011 6:41pm
Quoting GEfx
I started reading this thread and only got this far.
You know you should have read a bit more. Some people actually did provide some good adivces. Your post on the other hand is completly irrelavant to this thread. So why waste ur time if u dont have/know something usefull to say.
  • #399
  • Aug 10, 2011 7:32pm Aug 10, 2011 7:32pm
Quote
I dont use it at all becouse it just crap. Like i said i have yet to see someone who is profitable on long term from TA alone.

well, there are

* all the people from the early-mid 90's who got on to equity statistical arbitrage

* IKOS funds

* Jim Simons & Renaissance.

Of course we don't know if anything is "TA" alone, but they are all highly quantitative & systematic.
  • #400
  • Aug 10, 2011 8:45pm Aug 10, 2011 8:45pm
Perhaps the cup is half full.
Here's reres' indicators I've even read a little about --
Quoting reres

  1. -seasonal patterns (monthly, weekly, daily)
  2. -statistical patterns (like which days are best for trending currencies)
    ...
  3. -trading correlations (bonds, stocks, forex- they are all influenced by eachother)
  4. -order flow

First two sound like Commodity Trader's Almanac. Though I'm used a little to inter-pair correlation, some experienced ff members, I've seen do the third one, and it makes sense.
I don't know much about the last one. Strictly speaking, I'd guess it's watching the order book of the broke r. Beyond that, several data types could fill its shoes.
One that may is ff's new "liquidity" feature. Another, one I like, might be an indicator showing an ECN broke r's variable spread per bar.

Anyhow, interested in what reres may want to add to or correct about his method.
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