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

  • #721
  • Aug 16, 2011 9:06pm Aug 16, 2011 9:06pm
Quoting nubcake
you don't need 2000 bars of data you muppet! i was asking for that much so i had enough data to conclude that i was looking, or not looking, at a 1m chart. this has nothing to do with trading, and was only about the fact that a 1m chart IS different to higher timeframe charts and can be identified on the basis of purely looking at enough data (HENCE THE REQUEST FOR 2000 BARS!). get the point, or keep quiet.

fact... timeframe matters. if you think the volatility on a 1m chart over a day scales upwards and resembles the volatility on a daily...
whoa, I just put out 2000 as an example, not any reference to your 2000

very emotional, caffeine just hit your system or you know your arguments have no foundation?
  • #722
  • Aug 16, 2011 9:09pm Aug 16, 2011 9:09pm
Quoting nubcake
you can't seriously tell me that just by looking at the bar data alone that you can't see where the day starts, end, and where the london session begins! seriously. i'm not even going to bother hiding shit... the point is obvious just by looking at the chart. it's clear as day.

anyway. i'm over it. you won't believe it even when it's staring you in the face.
Why do I need to know when day starts and ends?

The market is continuous, no?

And, yes, I could trade that chart, if I wanted to trade 1 min.
  • #723
  • Aug 16, 2011 9:25pm Aug 16, 2011 9:25pm
Quoting nubcake
i'm done talking to people who TRULY don't know any better.
Yes yes, you are always done talking to people... until the next time that is.

As far as I am concerned I am done with you for good, period, as soon as I hit that Ignore button.
  • #724
  • Aug 16, 2011 10:19pm Aug 16, 2011 10:19pm
Those of you who are interested can get a glimpse of the fractal nature of the market by consulting the now famous Scientific American article (February 1999 issue), "A Fractal Walk Down Wall Street", by legendary mathematician Benoit Mandelbrot.

This idea behind this principle is that market fluctuations on the smaller time frames are no different than those on the higher time frames.

In fact, this idea is behind the whole Elliot Wave trading concept.
  • #725
  • Aug 17, 2011 12:40am Aug 17, 2011 12:40am
Quoting nubcake
the market is not a fractal.

the market charts are ALL generated from ticks. that's as low as it goes. period. and from that the first summary is the 1m chart... and upward we go. then you have effects from different hourly participants creating patterns of volatility within each day... then different days of the week having unique patterns again of volatility... finally hitting the weekend when everyone is out of the market.
Agreed. Markets are not fractal due the lower limit. Mabye some daily chart looks like 1 min chart at first glance but they dont behave the same way. Volatility is not the same.
  • #726
  • Aug 17, 2011 12:50am Aug 17, 2011 12:50am
Quoting Mr Breakout
I used to play the option game and I got burned bad. Sure you can make a "quick" $1,000 profit if you aim for a small $0.10 move, but if the stock never exceeds your strike price or if it goes south your could lose $5,000 or more depending on the price of your out-of-the-money option. Volatile, high range stocks have expensive options.
From what u wrote i conclude u just gambled "if it goes my way i can make soooo much money, but then it can go other way as well". I think options can be very profitable if you are playing on volatility. Buying unerpriced options and selling overpriced. Taking the advantage of mispricing. Or simply buying straddles and strangles 2 weeks prior to the earning announcment. When earnings come both options will rise due to implied volatility rising and than on the top of that a big move can happen. Thats one good strategy to play that.
  • #727
  • Aug 17, 2011 1:03am Aug 17, 2011 1:03am
Quoting reres
From what u wrote i conclude u just gambled "if it goes my way i can make soooo much money, but then it can go other way as well". I think options can be very profitable if you are playing on volatility. Buying unerpriced options and selling overpriced. Taking the advantage of mispricing. Or simply buying straddles and strangles 2 weeks prior to the earning announcment. When earnings come both options will rise due to implied volatility rising and than on the top of that a big move can happen. Thats one good strategy to play that.
I am not so familiar with options, but aren't upcoming earning reports already priced into an option?
  • #728
  • Aug 17, 2011 1:17am Aug 17, 2011 1:17am
Quoting hanslachmann
Hi, you can trade AUDUSD only buy positions. AUDUSD gives positive swap daily 1,4 pips (august 2011) on FxPro.. Some brokers gives less swap and some also gives you negative swap on buy positions.

Attached Script displays on your chart what is the current swap.

I created a very simple EA that opens a trade on daily candle open if trend is up. Take Profit = 1000 pips and Stop Loss = 500 pips
Parameters are not optimized.

Fortunately the MT4 backtester calculates swap.
Take a look at Attached backtest (from 2006 - 2011) as you can see the profits...
Nice results. How did you determined the trend on the daily chart? With MAs? Why didn't you make a 10-year backtest?
  • #729
  • Aug 17, 2011 1:19am Aug 17, 2011 1:19am
Quoting Custos
I am not so familiar with options, but aren't upcoming earning reports already priced into an option?
Not really. Implied volatility is a big variable and it is not substantially priced in until 2 weeks prior. Then it starts rising. After the earnings it falls again.
The key in this strategy is to buy at least 3 month options so time decay for holding them 2-3 weeks doesnt eat u.
  • #730
  • Aug 17, 2011 2:11am Aug 17, 2011 2:11am
Oh pls! Study about fractal properly! Does Koch snowflake look like a Koch snowflake at the beginning stage?
  • #731
  • Aug 17, 2011 2:27am Aug 17, 2011 2:27am
You only need look at the threads on FF to see clearly that there are more folks who have no idea about the markets than those that do. Easy to get into a debate with people who have never traded real money in live markets in their lives. So the debate comes down to their demo efforts. Not real and does not test you as a trader.Get real.

Let's face it who needs ANY knowledge or skill to make 10 to 20 pips per day or per trade. Markets do not move in 10 to 20 pip denominations, do they !!! If that is what you think then you need to look again.

Price is price regardless of the timeframe. Know your market and take advantage of what it does. No need to be a gold medal winning trader. Its about making a profit and being familiar with your preferred market(s).

You can trade one market and make a great living (one or two trades per day can give you significant pips). All you need to know is how it confirms a rise or a decline and let the move develop to a pre-determined price point.

How you do it is really irrelevant. If your method works then why worry about what anyone else thinks. Who cares what anyone else thinks.

There is more than one way to skin a cat. Just because you opt for a different approach does not mean there are NOT alternatives that also work.

So what is it that we are all talking about here ?!!!

Some people cannot accept what the markets do or they are so gripped by fear or greed they can only stick in a trade for a few minutes before bailing out. If you know your market then you will have a reasonable idea how far it will travel before a change in direction. It is not rocket science.

The edge is with the trader, ability to follow a workable/consistent strategy and lots of common sense is needed. If you cannot describe your entry,exit strategy in a few words it is too complicated. Your stop loss should also have a logic to it and should be as important an element of your strategy as your entry and exit rules.

Most everything else is just BS. People also seem to get satisfaction from a Break Even trade.......what is all that about. You have either entered the move too late so it is concluding or you are trading in the wrong direction or you did not take profits when you should have.The only upside of a BE trade is that it is not a loss. Period.

Happy Trading

makingpips
  • #732
  • Aug 17, 2011 2:35am Aug 17, 2011 2:35am
Quoting ForexQuant
Oh pls! Study about fractal properly! Does Koch snowflake look like a Koch snowflake at the beginning stage?
fine, the market is a fractal. all timeframes look the same. yadda yadda yadda. oh, and no one can tell that they are looking at a 1m chart when given enough data, as clearly proven by the muppetry above.
Congratulations ScalaFX for coming out of the closet!
  • #733
  • Aug 17, 2011 2:40am Aug 17, 2011 2:40am
Quoting makingpips
You only need look at the threads on FF to see clearly that there are more folks who have no idea about the markets than those that do. Easy to get into a debate with people who have never traded real money in live markets in their lives. So the debate comes down to their demo efforts. Not real and does not test you as a trader.Get real.

Let's face it who needs ANY knowledge or skill to make 10 to 20 pips per day or per trade. Markets do not move in 10 to 20 pip denominations, do they !!! If that is what you think then you need to look again....
I like your post. Yeah, there are lots of ways to skin a cat.
But I do think time-frame matters cause of transaction costs, as I stated in another post. At one point the profits will be so miniscule, that your transaction costs will evaporate them. The higher the pips you shoot for per trade, the less impact transaction costs have on your balance.

Well, and concerning b/e trades, or trades with a tiny profit/loss. They are indeed important for profitability purposes. If you are sizing your positions according to a percentage of your account, it is best to keep losses at a minimum. Example: let's say you have a $ 1000 account and are down to $ 800, you have a 20 % drawdown.
Now you need to increase your account by 25% to be at $ 1000 again.
However, if many of the losses would have been minor or at b/e, you wouldn't have had such a deep drawdown and need much less to come back to $ 1000 and then can reach faster new equity highs.
Not losing too much money when in drawdown is indeed very important.
  • #734
  • Aug 17, 2011 3:14am Aug 17, 2011 3:14am
Quoting tom2009
Nice results. How did you determined the trend on the daily chart? With MAs? Why didn't you make a 10-year backtest?
Attached 10 year backtest...
the only time you loose whith this strategy is when you have financial meltdown like in 2008.

Yes, Im using Daily chart. Trade is always opened when opening of daily candle.
First test (2006-2011) trend is determined with EMA10 > EMA20 and EMA20 > EMA30 (not optimized)

Second backtest (2001-2011) is only using the CCI indicator.
you need 2 CCI's: CCI5 crosses CCI6 below -240 (these values are optimzed by the MT4 backtest/optimizer)
and max 30 trades can be opened at the same time. Max one trade can be opened each day. Fixed Take profit = 1000 pips and Stop loss = 500 pips

Will post the EA soon...
Attached File(s)
File Type: pdf file____C__Temp_StrategyTester_10Y.htm.pdf   216 KB | 442 downloads
  • #735
  • Aug 17, 2011 3:20am Aug 17, 2011 3:20am
Quoting Custos
I like your post. Yeah, there are lots of ways to skin a cat.
But I do think time-frame matters cause of transaction costs, as I stated in another post. At one point the profits will be so miniscule, that your transaction costs will evaporate them. The higher the pips you shoot for per trade, the less impact transaction costs have on your balance.

Well, and concerning b/e trades, or trades with a tiny profit/loss. They are indeed important for profitability purposes. If you are sizing your positions according to a percentage of your account,...
Hi Custos,

Yeah I know about how important it is to keep losses to a minimum.........just making the point about not getting too excited about a BE outcome. It is better than a loss. I do not move my stop to protect accummulated profits (just my preference) as I expect my limit to fill as limit placement avoids any price point where there may be a problem.

I only take a position in my preferred market if 47 to 67 pips on offer on the first move (so I tend to go for 57 pips with a limit in place to take profits automatically).........beyond that the next move should deliver 67 to 100 pips (or more) and again I would aim for probably 87 pips on a limit order. I do not use leverage. I do not monitor my positions I just let the market do its thing after entry based on what PA has indicated. I look at my preferred market at around the same time each day for the first move and then later for the second one. Beyond that I am not interested until the following day unless something really significant is afoot. I am in the UK so the mechanics/trading platforms do differ.

Think we are on the same page though.

makingpips
  • #736
  • Aug 17, 2011 4:13am Aug 17, 2011 4:13am
Quoting Mr Breakout
The goal of this little experiment was to prove that it is very hard to distinguish between lower and higher time frames, given let's say 200 bars of data.

Reres claims that is impossible to make money on the 5 min bars for example because these bars are "different" (??) than the daily bars . Well there are dozens of powerful EA that make consistent profits daily on the 5 min time frame, day in and day out.

Of course these EA's make very small pips on each trade, but since they trade 20 or 25 times a day on autopilot, the profits quickly...
what do you mean dozens of EA's where the hell did you get that idea as I have never seen one EA in my years personally so dozens is too funny.. wheres my cut!?!
  • #737
  • Aug 17, 2011 4:16am Aug 17, 2011 4:16am
Quoting Mr Breakout
Look at this image Nubcake, it's called a fractal image (google for "fractal images" and see how beautiful they are). It has been generated by a computer using a complex mathematical formula.

At first glance it seems like a unique image, but if you keep zooming you will quickly notice that the same exact motif keeps repeating itself over and over and over and over.

Well the market behaves the same exact way. Like I said in another post, the market is fractal in nature, what goes on the monthly chart also happens on the 1 min...
No the market does not behave the same exact way on all time frames.. maybe Japanese candles do, thats why you always have a high low open and close and that might be why you mistakenly view the market as a fractal.....
  • #738
  • Aug 17, 2011 4:22am Aug 17, 2011 4:22am
Quoting Mr Breakout
Look at this image Nubcake, it's called a fractal image (google for "fractal images" and see how beautiful they are). It has been generated by a computer using a complex mathematical formula.

At first glance it seems like a unique image, but if you keep zooming you will quickly notice that the same exact motif keeps repeating itself over and over and over and over.

Well the market behaves the same exact way. Like I said in another post, the market is fractal in nature, what goes on the monthly chart also happens on the 1 min...
I've been watching you rant the last few days my conclusion is your out here unknowingly looking for confirmation bias.

You remind me of a very disturbed woman I once saw trying to ensure her own religion. Praise her ideas and I was welcomed into her friendship.. offer my own views that go against her and I am not welcomed.
  • #739
  • Aug 17, 2011 9:49am Aug 17, 2011 9:49am
Quoting newyear498
what do you mean dozens of EA's where the hell did you get that idea as I have never seen one EA in my years personally so dozens is too funny.. wheres my cut!?!
Hold on NewYear498, let me write this profound idea down before I forget: "if we have never seen something before then it simply does not exist, period".

Marvelous! Simply brilliant! Why didn't I think of this before?
  • #740
  • Aug 17, 2011 10:15am Aug 17, 2011 10:15am
Quoting reres
Agreed. Markets are not fractal due the lower limit. Mabye some daily chart looks like 1 min chart at first glance but they dont behave the same way. Volatility is not the same.
Well, while you were busy repeating that we cannot make money with the lower time frames (??), I just picked up 32 pips on the AUD/USD on the 1 min this morning.

Now look again at this 1 min chart and tell me if it is any different than the 1h, the 4h, the daily, the weekly or the monthly chart.
Attached Image (click to enlarge)
Click to Enlarge Name: audusd1min.png Size: 58 KB
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