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  • #461
  • Apr 14, 2012 2:11pm Apr 14, 2012 2:11pm
Quoting bluesteele
Sorry Bob I have nothing to teach you. Running??? Here I am...LOL
Last time I checked this is an open forum. This isnt China Bob. I will say what I want when I want. If you have a problem with that, then you have a problem, it's not mine.

And whats wrong with the various posters pointing out you are wrong?

The general consensus is your wrong. No big deal.. It's OK to be wrong Bob..Sort of like stop losses and trades. You dont need to be right 90% of the time like you profess. really there is nothing wrong with a system that has a 60% win rate....
Still waiting for your wit and wisdom in using SL. Dont worry I am not expecting it, I know you cant teach or train. Head bashing is your best skill. I used to trade around 60% but now am closer to 80% 77.04% to be exact for the last 9 months. If you dont understand that it means almost 23% of my trades are losers. Dang he takes losses. Bet that amazes you doesnt it. Man you are a piece of work.
  • #462
  • Apr 14, 2012 2:18pm Apr 14, 2012 2:18pm
Quoting nanningbob
I dont hedge, I cant, unless I use multiple accounts but I dont there either. I have found in practicing it on a demo to be a headache to unhedge the trade. I dont know how you guys ever got to me using hedging.
I never said you used it, but you are defending it as a legitimate way of mitigating risk, which it is not.
  • #463
  • Apr 14, 2012 2:25pm Apr 14, 2012 2:25pm
Quoting fierceman
Arbitrage is the mechanism by which the prices between a cross and its components always stay connected (aside from small oscillations). It has nothing to do with accounting. The only time I mentioned accounting was on the separate topic of hedging being an accounting trick.

I can't quite understand how you think a hedged position is not being out of the market. When price changes don't affect the value of your portfolio, you are out of the market (i.e. not exposed to the market). That is what happens when you are "hedged". Once you close one...
I know you know this so put it into practice. When you trade eur/jpy you are buying the eur and selling the jpy or selling the euro and buying the jpy. This will always cause your arbitrage. They will always be in balance. If Toyota sells a car in Germany they will convert the euro to jpy and deposit it into their account in Japan. You have yet to to explain how the transaction which will cause a tick movement on the eur/jpy chart will also cause tick movements on a usd/jpy and eur/usd chart. If it doesnt then it 100% proves my point that arbitrage is not related to price action and is worthless information for trading. However, it makes perect sense in the accounting world. Surely you can conceptualize that a car sold in Germany in Euros and then converted back to JPY for deposit in Japan has no effect on the eur/usd. Really now, is that really that hard to understand?? The eur/jpy will always be in accounting balance, the eur/usd will always be in accounting balance, usd/jpy will always be in accounting balance. Mix and match their totals anyway you want and guess what???? They will always be in balance. What is it that you really think I dont understand???
  • #464
  • Apr 14, 2012 2:32pm Apr 14, 2012 2:32pm
Quoting fierceman
I never said you used it, but you are defending it as a legitimate way of mitigating risk, which it is not.
No I didnt, I used an illustration of a time I thought it could be used viably. A time out. That is not mitigating risk but freezing it until you decide what you want to do next. People, and that includes you and me, have things happen in which under pressure we would make stupid decisions we normally would not make. Lets say I got a phone call that my older brother had died. I would not want to be trading or making decisions about Forex for awhile. I could just close all my positions, that is true. I would rather just freeze them all with a hedge and come back in a week or two and deal with it. I guess that is a mitigating reason to minimize risk but I would prefer to just call a time out, deal with other issues and come back later, unhedge, and continue trading. That is a whole different concept that using it as a daily trading rule. Surely you can tell the difference between the two concepts?? Cant you??
  • #465
  • Apr 14, 2012 2:37pm Apr 14, 2012 2:37pm
Quoting Nacho
hi nanningbob,

I always enter a trade when I spot an H4 candle closing above/below 5EMA, but since this does not happen very frequently, and I need to open a lot of positions to make some profit, I now also enter using TMS indicator which I find pretty reliable, looking at H1 chart with trend confirmed by H4.
I will try to post some charts asap
Nacho, if you really want to discuss trading your method, you are going to have to ban some people and get them out of here. They will harass you until you quit. They are not here to discuss trading methods and systems but to disrupt and harass. I love trading the 4H chart and somtimes use the 5 or 4 MA. So I look forward to some discussions. I will refrain from engaging them any further. Better get your arbitrage trading methods ready though or you are going to lose out.
  • #466
  • Apr 14, 2012 2:38pm Apr 14, 2012 2:38pm
Quoting nanningbob
See my previous post about accounting and price action.
What's the connection between arbitrage and accounting? Arbitrage is a way of taking advantage of price differences between things that are supposed to have the same price. By engaging in this type of arbitrage, you are buying the instrument that is "underpriced" and selling the instrument that is "overpriced", and taking profit once the prices realign. You will notice of course, that the side effect of buying the underpriced instrument is a rise in its price, and the shorting of the overpriced instrument results in lowering its price, so the equilibrium is always kept between EUR/USD, USD/JPY and EUR/JPY. This has very little to do with accounting, and everything to do with the way financial markets operate.

As I said, the only time I mentioned accounting was when saying that hedging is an accounting trick. You can always replicate a hedging strategy with a hedgeless strategy, and you will be better off to boot (paying less spread, paying less interest, and possibly even using less margin). This is why the definition that is used by so many retail forex outfits is misleading and even predatory to inexperienced traders.

BTW, the SNB can refer me to any broker they want - it doesn't mean that they hedge in this way. In fact I guarantee you that they don't, and I am pretty sure that they laugh at anyone who does (if they are even aware of its existence).

Offsetting Transactions
New Compliance Rule 2-43(b) requires an FDM to offset positions in a customer account on a first-in, first-out basis, thereby prohibiting a trading practice commonly referred to as "hedging."

Exactly - they call it "offsetting transactions". That means they offset (cancel) one another. They are requiring first-in, first-out (FIFO) accounting, which has the effect of removing the illogical practice of "hedging". They even put "hedging" in quotes and say that the practice is commonly referred to as "hedging", and not defined as hedging. The definition of real hedging is something completely different. Please don't propagate this as anything but a way for brokers to milk more money out of inexperienced traders. Tell people to just close their positions instead of "hedging".

Furthermore, you say you don't hedge because you can't, due to the US regulations. Then you go on to say that Oanda does allow hedging in two separate accounts, but that makes it too much of a bother.
  • #467
  • Apr 14, 2012 2:42pm Apr 14, 2012 2:42pm
Quoting Lonestar
Entries? Exits? Buy? Sell? Price action? Why bring that into it? That's completely out of context with the issue at hand. I addressed the issue which was your ignorance on how pairs are related and how a single price change causes a cascading effect across many pairs. But of course instead of admitting you were incorrect in your thinking and being happy you learned something you bring up a bunch of stuff that's not related to the issue we're discussing to try to save face and divert the attention to something else. Typical...
DUH. This is FF and we are here to discuss trading. Great sentence though, made me laugh. If Arbitrage cant be used to trade why discuss it? Great one there.
  • #468
  • Apr 14, 2012 2:43pm Apr 14, 2012 2:43pm
Quoting nanningbob
I could just close all my positions, that is true.
I agree with that wholeheartedly. You should have ended your post there .

Quoting nanningbob
I could just close all my positions, that is true. I would rather just freeze them all with a hedge and come back in a week or two and deal with it. I guess that is a mitigating reason to minimize risk but I would prefer to just call a time out, deal with other issues and come back later, unhedge, and continue trading. That is a whole different concept that using it as a daily trading rule. Surely you can tell the difference between the two concepts?? Cant you??
There is no difference between the concepts. It is the same concept. By hedging, you are closing your position, but paying for it. It makes no sense. There is no such thing as "freezing" your position. It's either open or it is closed. You are either exposed to the market or you are not. That's all there is to it. All this hedging stuff just obscures the truth that you are either in or you are out.
  • #469
  • Apr 14, 2012 2:50pm Apr 14, 2012 2:50pm
Quoting fierceman
What's the connection between arbitrage and accounting? Arbitrage is a way of taking advantage of price differences between things that are supposed to have the same price. By engaging in this type of arbitrage, you are buying the instrument that is "underpriced" and selling the instrument that is "overpriced", and taking profit once the prices realign. You will notice of course, that the side effect of buying the underpriced instrument is a rise in its price, and the shorting of the overpriced instrument results in lowering its price, so the...
Yes I understand that relationship but that is just knowing your basic fundamentals.

Forget some of this garbage. You would probably be interested in a project i am working on then. What I want to have is the 1MA median on a screen and then overlay all the others on the screen from a single currency. For example: If I could overlay the aud/nzd, aud/usd, aud/cad, aud/chf, aud/jpy etc. on one screen and suddenly one of them took off. Would that not be a great indication that the others would follow?? Anyway, that is something I am working on with some programmers now. See how it goes and would be easier to see the direction of certain currencies. One pair becomes the predictor of the others.
  • #470
  • Apr 14, 2012 2:53pm Apr 14, 2012 2:53pm
Quoting fierceman
I agree with that wholeheartedly. You should have ended your post there .


There is no difference between the concepts. It is the same concept. By hedging, you are closing your position, but paying for it. It makes no sense. There is no such thing as "freezing" your position. It's either open or it is closed. You are either exposed to the market or you are not. That's all there is to it. All this hedging stuff just obscures the truth that you are either in or you are out.
Exactly, freezing would remove my exposure to the market until I was in a better mental and emotional position to do so. That is the one benefit I see of it. Thank you for making it very clear.
  • #471
  • Apr 14, 2012 3:55pm Apr 14, 2012 3:55pm
Quoting nanningbob
Exactly, freezing would remove my exposure to the market until I was in a better mental and emotional position to do so. That is the one benefit I see of it. Thank you for making it very clear.
I dont even know where to begin with this humdinger???

So if I was to read between the lines it goes something like this.

Bob:
"Shit my trade has really tanked and I dont want to take a loss"
"I dont want to give the game playing broker my money"
"I have no clear exit strategy"
"WTF do I do ???"
"OK I will hedge(freeze) my position until I figure out how to get myself
oout of this mess"


"OH...I know, I will Martingale (Recovery multi-level ) snicker snicker I'm so smart back into B/E"

"Add 1 more contract,,shit its still going south, add 3 more ,OHOH add 4 more contracts whew....made it too B/E "


Bob, now I am trying too help you. Please go get from your library or store some trading psych books. I seriously think you need them.

Good Luck Bob.

Bluesteele

PS Sometimes its best to be a man about things and if your trade is FUBAR'd on ya.. Close the mother out completely. Close out all of your trades and do whatever it is you need to do to get your head on strait then and only then think about going back into the market.

Your posts speak volumes about you. You are combative and absolutely hate being wrong and that is 100% the reason you trade thev way you do with hedging and martingaling. It is the reason you brag about your win/loss%.

Help yourself out and go read some trading psych books...
Master your Mind,,,Master the Market
  • #472
  • Apr 14, 2012 4:11pm Apr 14, 2012 4:11pm
Quoting nanningbob
Exactly, freezing would remove my exposure to the market until I was in a better mental and emotional position to do so. That is the one benefit I see of it. Thank you for making it very clear.
But this benefit is an illusion. It is the same as closing your position, except for two little tidbits - you PAY an extra spread, and you PAY overnight interest on longer timeframe trades. Just close your position normally, deal with the emotional stuff, then come back and re-enter the market the way it's done in the real world (i.e. not the magical world of retail forex where buying and selling the same thing at the same time somehow does not offset).
  • #473
  • Edited 4:38pm Apr 14, 2012 4:26pm | Edited 4:38pm
Quoting nanningbob
If I could overlay the aud/nzd, aud/usd, aud/cad, aud/chf, aud/jpy etc. on one screen and suddenly one of them took off. Would that not be a great indication that the others would follow??
Unfortunately no... You would have to take into consideration the crosses between nzd, usd, cad, chf and jpy. What the arbitrage example we have been doing does is this:

Say we have
EUR/USD = 1.2000
USD/JPY = 100.00
EUR/JPY = 119.00

Theoretically, what you could do in that case is calculate the synthetic EUR/JPY by multiplying 1.2000 * 100.00 = 120.00 and seeing that the "real" cross is at 119.00. Knowing full well that those two prices should be identical, you decide to exploit the idea of arbitrage. You buy EUR/JPY @119.00, you short EUR/USD @ 1.2000 and you short USD/JPY @ 100.00 (you would have to calculate the appropriate quantities of each, so you're not left with any net exposure).

At this point you don't care where any of the pairs go - the only thing you care about is that EUR/USD * USD/JPY = EUR/JPY will be back, and you profit. Of course, in reality, you will never see a 100 pip gap between EUR/JPY and its components, precisely because several algorithms will do what we just did long before the gap gets that wide, and by doing so, will actually close the gap.

A gap that is too small can't be exploited because spread and/or slippage would destroy your profits, and a gap that is big enough to exploit doesn't happen too often (though I have seen it happening between different broker feeds, and have made money from it - it is not a strategy to depend on). Basically it's you and your home PC with a DSL connection to your slow ass dealer vs. purpose-built machines running assembly coded algorithms connected directly to banks by fibre. You won't come out on top too many times.
  • #474
  • Apr 14, 2012 8:33pm Apr 14, 2012 8:33pm
Quoting fierceman
Unfortunately no... You would have to take into consideration the crosses between nzd, usd, cad, chf and jpy. What the arbitrage example we have been doing does is this:

Say we have
EUR/USD = 1.2000
USD/JPY = 100.00
EUR/JPY = 119.00

Theoretically, what you could do in that case is calculate the synthetic EUR/JPY by multiplying 1.2000 * 100.00 = 120.00 and seeing that the "real" cross is at 119.00. Knowing full well that those two prices should be identical, you decide to exploit the idea of arbitrage. You buy EUR/JPY @119.00, you short...
I used to try to take advantage of the Sunday gaps. I would place some trades just before closing on Friday with the idea that the gap would give me a nice big profit when the market opened Sunday. When it worked great, when it didnt ............. oh well. Maybe my word meaningless was harsh, better phrase, not worth my time to trade would be better. I think if you go back to my car sales illustration and change GM to Mercedes, I think you will see that I do understand the relationship and how if affects overall pricing. I may repost the illustration and make it a bit clearer.
  • #475
  • Edited 9:06pm Apr 14, 2012 8:39pm | Edited 9:06pm
Quoting fierceman
Unfortunately no... You would have to take into consideration the crosses between nzd, usd, cad, chf and jpy. What the arbitrage example we have been doing does is this:

Say we have
EUR/USD = 1.2000
USD/JPY = 100.00
EUR/JPY = 119.00

Theoretically, what you could do in that case is calculate the synthetic EUR/JPY by multiplying 1.2000 * 100.00 = 120.00 and seeing that the "real" cross is at 119.00. Knowing full well that those two prices should be identical, you decide to exploit the idea of arbitrage. You buy EUR/JPY @119.00, you short...
That is not what I would be looking for. If one of the currencies goes south first will it indicate that the rest will do also? This is not arbitrage and does not deal with that subject. All you would have to do on the other pairs is to set up some pending sells below a pivot or support on the other pairs. If they follow you are in, if not you aren't. It is a follow the pack mentality, anyway until I get some kind of one chart indicator showing this, it is too hard to do with multiple charts. There are some real programming issues, like getting a currency that is trading at 1.60 to show on the screen around the same location as one that trades at 1.30 or 2.70.
  • #476
  • Apr 14, 2012 8:43pm Apr 14, 2012 8:43pm
Quoting nanningbob
I used to try to take advantage of the Sunday gaps. I would place some trades just before closing on Friday with the idea that the gap would give me a nice big profit when the market opened Sunday. When it worked great, when it didnt ............. oh well.
Sounds like gambling too me.

Why not fade the gap.
Master your Mind,,,Master the Market
  • #477
  • Apr 14, 2012 8:46pm Apr 14, 2012 8:46pm
Quoting nanningbob
I used to try to take advantage of the Sunday gaps. I would place some trades just before closing on Friday with the idea that the gap would give me a nice big profit when the market opened Sunday. When it worked great, when it didnt ............. oh well. Maybe my word meaningless was harsh, better phrase, not worth my time to trade would be better. I think if you go back to my car sales illustration and change GM to Mercedes, I think you will see that I do understand the relationship and how if affects overall pricing. I may repost the illustration...
Fair enough. Maybe now we can give the OP his thread back .
  • #478
  • Apr 14, 2012 11:11pm Apr 14, 2012 11:11pm
Quoting Nacho
Hi all,

I want to share my strategy and get your opinions comments and views.

The strategy I'm using is very simple and has been very succesfull so far.

My rules:

1. NO leverage
I have a 1000 eur account and I'm trading only 0.01 lots right now. I will start to trade 0.02 lots as soon as I reach 2000 eur margin and so on (or you can decide to go even slower by trading 0.02 lots only when your account has 3000 eur margin etc.)

2. SMALL TP
I have a set TP of 15-20 pips on every trade, trading only pairs with low broker spread.

3. NO...
Providing that you have the discipline to stick to your system, and courage to pull the trigger on a loss when needed.

I have a system similar that I have been using on my small account. I have attached the trade list so you can see it's not hard to go weeks at a time without a loss. Notice I took a 488. dollar loss a few days ago. That was a manual trigger. Got tired of holding. sometimes being stuck in a drawdown for days is as bad as taking a hit. I've recovered half of that back at present, and anticipating to have whole loss fully recovered plus some by Monday's close.
Attached File(s)
File Type: txt statement.txt   15 KB | 380 downloads
All that is left in FF is just plain garbage. "Cloggie"
  • #479
  • Apr 15, 2012 3:00pm Apr 15, 2012 3:00pm
Quoting nanningbob
DUH. This is FF and we are here to discuss trading. Great sentence though, made me laugh. If Arbitrage cant be used to trade why discuss it? Great one there.
Obviously unbeknownst to you there are many many aspects to trading and very few, if any I am rapidly discovering, that you have even a basic grasp. Do you actually think that every aspect of trading can be discussed at once? Let me clue you in. The answer is a resounding no. Certain things need to be completely understood to move on to other aspects. Until you understand the mechanics of pair movement in relation to other pairs you won't understand arb. And arb had nothing to due with the issue that was being discussed. Nor did entries or exits or price action or anything you tried to divert the attention to and away from your ignorance. There are some knowledgeable traders around here Bob and if you would drop the attitude and closed mind and stop acting like a child you might learn something and not be the joke here. Case in point, your new saying quoting the formula I used to show you how pair are inextricably linked in a mathematical way. Now you added to trade it and you will be a success. That's hilarious that that was your take away from it. Once again it shows how little you know about trading and how you lash out at people that are trying to help you and act like a child. I am hoping that wasn't your take away from that post because if it was you're even more of an idiot than you already shown yourself to be. Grow up.
  • #480
  • Apr 15, 2012 3:24pm Apr 15, 2012 3:24pm
Quoting Nacho
Hi all,

I want to share my strategy and get your opinions comments and views.

The strategy I'm using is very simple and has been very succesfull so far.

My rules:

1. NO leverage
I have a 1000 eur account and I'm trading only 0.01 lots right now. I will start to trade 0.02 lots as soon as I reach 2000 eur margin and so on (or you can decide to go even slower by trading 0.02 lots only when your account has 3000 eur margin etc.)

[b]2. SMALL TP
I have a set TP of 15-20 pips on every trade, trading only pairs with low broker spread....
since each setup is different,how can you have a fix target ? this is non-sense
Hero calls followed by margin calls...
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