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

  • #761
  • Aug 18, 2011 10:40am Aug 18, 2011 10:40am
Quoting makingpips
Price is price regardless of the timeframe and yet so many folks set their whole strategy around a certain TF........you can make money on any timeframe of your choosing BUT the higher the better as far as I am concerned. You get a better view of the market from higher timeframes.
But whatever floats your boat. Markets do not operate on TFs they are unaware of time.

makingpips
The markets are a collection of people trading and some people use time some do not in there trading activities so I'd say the truth lies somewhere in the middle
  • #762
  • Aug 18, 2011 10:44am Aug 18, 2011 10:44am
Quoting Custos
I must agree with nubcake here


http://images.cheezburger.com/comple...4108905377.jpg
Congratulations ScalaFX for coming out of the closet!
  • #763
  • Aug 18, 2011 10:58am Aug 18, 2011 10:58am
, haha

Quoting nubcake


http://images.cheezburger.com/comple...4108905377.jpg
  • #764
  • Aug 18, 2011 11:15am Aug 18, 2011 11:15am
Quoting makingpips
Price is price regardless of the timeframe and yet so many folks set their whole strategy around a certain TF........you can make money on any timeframe of your choosing BUT the higher the better as far as I am concerned. You get a better view of the market from higher timeframes.
But whatever floats your boat. Markets do not operate on TFs they are unaware of time.

makingpips
makingpips

I understand what your saying.I used to trade one and two bar price action combinations on 1hr,4hr,daily and weekly timeframes.The problem i found with this way of trading i was missing move after move while waiting for those longer term candles to form.
Now i just look at 5 min entries because that is as close to the current price as i want to be,but still gives me enough time to make my trading decisions.
If i can get into the London move to New York open in one trade(assuming their is a move)job done.Move my stop accordingly and wait to see what developes.
  • #765
  • Aug 18, 2011 11:45am Aug 18, 2011 11:45am
Quoting Custos
I must agree with nubcake here. The lower the time-frame, the more you get into the sessions issue. London session: high volatility and setting direction, new york generally retracing and asian session either retracing or high volatility depending on the pair.

Markets are very aware of time of the day. You wouldn't expect a fund which has a position of billions of dollars to exit that position at the end of the new york session, when there is no liquidity. It would exit it during london session and preferably on the london open.
I agree there are better times to trade than others. Its traders and market makers that cause the best times to trade not the markets themselves. Markets just do what they do.........we make certain times of the day better than others along with global exchanges opening and closing.

makingpips
  • #766
  • Aug 18, 2011 11:50am Aug 18, 2011 11:50am
Quoting DemoForever
makingpips

I understand what your saying.I used to trade one and two bar price action combinations on 1hr,4hr,daily and weekly timeframes.The problem i found with this way of trading i was missing move after move while waiting for those longer term candles to form.
Now i just look at 5 min entries because that is as close to the current price as i want to be,but still gives me enough time to make my trading decisions.
If i can get into the London move to New York open in one trade(assuming their is a move)job done.Move my stop accordingly and...
We are on the same page..........if current price is your entry so be it......if not you may need to wait a while until it comes around and you do need to consult a lower timeframe for entry.
But you can use orders to open at some future price too.
Time is not the deciding factor for entry........price is regardless of your preferred TF. Just as time is not the deciding factor for exit.......price is.

makingpips
  • #767
  • Aug 18, 2011 3:06pm Aug 18, 2011 3:06pm
Quoting makingpips
We are on the same page..........if current price is your entry so be it......if not you may need to wait a while until it comes around and you do need to consult a lower timeframe for entry.
But you can use orders to open at some future price too.
Time is not the deciding factor for entry........price is regardless of your preferred TF. Just as time is not the deciding factor for exit.......price is.

makingpips
I will very rarely use a market order.I trade breakouts onlly using buy/stops and sell/stops.
  • #768
  • Aug 18, 2011 6:23pm Aug 18, 2011 6:23pm
Quoting makingpips
It took me around two years to get to the point where I could rely on my consitency or should I say the consistency of my preferred market in terms of what it offers and when.........plus I have no desire to watch the market once I am in trade. So I am very comfortable with my preferred approach and trade with reasonably high stakes. The upshot is I make a great living BUT I am not driven by the prospect of more and more money, not everyone is. Using leverage could upset my very well oiled machine !!!
Sounds great!! Unfortunately, I am unable to trade 10-20 full sized lots on a 1:1, so I have to use higher leverage. Shoot, the move of US residents back to 50:1 forced me to deposit much more than I wanted to keep in my account!!

Keep up the good work!!...
  • #769
  • Aug 19, 2011 3:31am Aug 19, 2011 3:31am
Quoting newyear498
What evidence do you have that the markets are not normally distributed (not 50/50)

if you have any research I'd be interested to see it
LOL, google LTCM, thats number 1.

But if you wanna see for yourself, download a tonne of daily data (any stock or asset) and plot it on a histogram.

You'll notice the kurtosis is above 3 and it fails the 68, 95, 99.7 test. You'll also notice the fat tails.

Normal distributions don't have these.
  • #770
  • Aug 19, 2011 6:37am Aug 19, 2011 6:37am
Quoting scottyfromau
LOL, google LTCM, thats number 1.

But if you wanna see for yourself, download a tonne of daily data (any stock or asset) and plot it on a histogram.

You'll notice the kurtosis is above 3 and it fails the 68, 95, 99.7 test. You'll also notice the fat tails.

Normal distributions don't have these.
was interested in forex not stocks, and I'm not sure how to process kurtosis so thats why I asked for the data
  • #771
  • Aug 19, 2011 7:30am Aug 19, 2011 7:30am
I took three trades this morning.It wasnt straight forward but worth the work and patience.All trades on Eur/Usd.

Trade 1 ;buy @ 1.4315 stopped out.

Trade 2 ;sell @ 1.4280 stopped out.

Trade 3 ;buy @ 1.4302 still open looking to trail stop.
  • #772
  • Aug 19, 2011 7:34am Aug 19, 2011 7:34am
Quoting newyear498
was interested in forex not stocks, and I'm not sure how to process kurtosis so thats why I asked for the data
well LTCM was a company that bet on everything, stocks, forex, bonds, volatility etc etc. They used models that assumed a normal distribution which underestimates the event of a crisis. Thus leaving them too exposed to a market downturn.

http://en.wikipedia.org/wiki/Long-Te...tal_Management

also

Inserted Video



You don't really process for kurtosis, kurtosis is a measure of peakedness when you plot data on the histogram. A normal distribution has a certain level of peakedness. Assets when plotted have a peakedness higher than the normal peakedness

The data's pretty easy to find if you just google it or go on yahoo finance, run it over excel and plot it on a histogram in data analysis.

http://www.fxhistoricaldata.com/
  • #773
  • Aug 19, 2011 7:39am Aug 19, 2011 7:39am
Quoting DemoForever
I took three trades this morning.It wasnt straight forward but worth the work and patience.All trades on Eur/Usd.

Trade 1 ;buy @ 1.4315 stopped out.

Trade 2 ;sell @ 1.4280 stopped out.

Trade 3 ;buy @ 1.4302 still open looking to trail stop.
looks like breakout trading the open?
  • #774
  • Aug 19, 2011 7:40am Aug 19, 2011 7:40am
Quoting scottyfromau
well LTCM was a company that bet on everything, stocks, forex, bonds, volatility etc etc. They used models that assumed a normal distribution which underestimates the event of a crisis. Thus leaving them too exposed to a market downturn.

http://en.wikipedia.org/wiki/Long-Te...tal_Management

also

http://www.youtube.com/watch?v=dsrOXJwGwtk


You don't really process for kurtosis, kurtosis is a measure of peakedness when you plot data on the histogram. A normal distribution has a certain level of peakedness....
Thanks this looks more than interesting
  • #775
  • Aug 19, 2011 8:38am Aug 19, 2011 8:38am
Quoting DemoForever
I will very rarely use a market order.I trade breakouts onlly using buy/stops and sell/stops.
Some don't but they can be used if the trader knows where that entry is likely to be positioned which of course is highly possible for a pure price action trader.

I use a breakout to keep me in a trade if appropriate as I would hope to be already involved close to where the move started based on price action confirmation (this allows much earlier participation).

Still as I have said before if we are all making money what does it matter.

makingpips
  • #776
  • Aug 19, 2011 8:48am Aug 19, 2011 8:48am
Inserted Video
  • #777
  • Aug 19, 2011 9:49am Aug 19, 2011 9:49am
Quoting Unchained
http://www.youtube.com/watch?v=UfS2JxiNLUU
rofl, that was awesome. cheers
  • #778
  • Aug 19, 2011 2:33pm Aug 19, 2011 2:33pm
Quoting makingpips
Some don't but they can be used if the trader knows where that entry is likely to be positioned which of course is highly possible for a pure price action trader.

I use a breakout to keep me in a trade if appropriate as I would hope to be already involved close to where the move started based on price action confirmation (this allows much earlier participation).

Still as I have said before if we are all making money what does it matter.

makingpips

Can i take it from what you have said that you use limit orders to enter the market?If i am correct i would be trading against you the majority of the time.
I trade against limit orders nearly 100% of the time.A new high or a new low is formed by people taking profits or sitting limit sell or buy orders being triggered right?
So we are both looking for the same move,but mainly trading opposite directions.Is that what you meant when you said you would take a breakout trade,maybe when your limit order had been triggered but you got stopped out,then price turned back in your direction and then take the next breakout of the next HH or LL?
  • #779
  • Aug 19, 2011 5:24pm Aug 19, 2011 5:24pm
Quoting reres

Simple question...Why would large time frames (which are determined only by the fundamentals) be acting the same as small times frames which are determined by so many different factors and barely by fundamentals?
Market are not moved by fundamental, technical or astrological events, markets are moved by people (traders). And people do not change from one time frame to the other. The same forces of fear and greed are always in play in every time frame, from the 1 minute to the 1 month chart.
  • #780
  • Aug 19, 2011 11:50pm Aug 19, 2011 11:50pm
Quoting ForexRock
Market are not moved by fundamental, technical or astrological events, markets are moved by people (traders). And people do not change from one time frame to the other. The same forces of fear and greed are always in play in every time frame, from the 1 minute to the 1 month chart.
Yes markets are driven by people AND those people are driven by fundamentals(on forex mostly IR expectations) on long term so the markets are driven by fundamentals. Behaviour of people on short time frame is very much different and random compared to long term collective behaviour.

Quote
astrological events
As absurd as it seems, if there were 1 million of astro traders their collective behaviour would actually influence the markets so indirectly planets would be moving the market due to human stupidity
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