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Challenging a Loser

  • #41
  • May 15, 2012 7:38am May 15, 2012 7:38am
Quoting Pipalicious
Although i find it funny (for the simple fact Dr Evil cracks me up) im going to ask you, politely, to fuck off my thread. Get it?
... my bad

Quoting Pipalicious
What i propose here is a a new challenge only for the open minded.

A way of thinking outside the box and coming up with creative ideas.

Losing trades are rarely discussed here, and more importantly, WHY it was a losing trade. And if it is, the answer is always a conventionally opinionated reason.

If you know when NOT to trade, you will know WHEN to trade.

The markets are dynamic and this is why it is so hard to truly identify a high odds trade from an absolute flop of a trade.

[b]This game is solely intended to inspire people...

OK... For me... Whats missing is order flow... I can't see where this market is trading just a bunch of candles. I like to trade where if I'm right then I am RIGHT. Big supply demand areas backed by multi time frame confluence, sentiment, Price. What means something somewhwere may not mean jack in a different place or time (for me).

I like to take trades accurately and add and add for massive gains, but I can't do this everyday. Maybe once or twice a week if I'm lucky. Still working on my (a) intraday scalping strategy that will satisfy my pipping desires

Just my 2
Time hides Nothing
  • #42
  • May 15, 2012 8:28am May 15, 2012 8:28am
Quoting CindyXXXX
... my bad

OK... For me... Whats missing is order flow... I can't see where this market is trading just a bunch of candles. I like to trade where if I'm right then I am RIGHT. Big supply demand areas backed by multi time frame confluence, sentiment, Price. What means something somewhwere may not mean jack in a different place or time (for me).

I like to take trades accurately and add and add for massive gains, but I can't do this everyday. Maybe once or twice a week if I'm lucky. Still working on my (a) intraday scalping strategy that...
Thanks for sharing your point of view
  • #43
  • Edited 10:25am May 15, 2012 9:37am | Edited 10:25am
CP

Thank you for the peek behind the veil.

My deepest respect for you sir.

Thanks for all the fish
  • #44
  • May 15, 2012 10:03am May 15, 2012 10:03am
Quoting CrucialPoint


[size=3][b]Break...
Very cool thanks CP
Time hides Nothing
  • #45
  • May 15, 2012 11:55am May 15, 2012 11:55am
Thank you, CP!
  • #46
  • May 16, 2012 8:52am May 16, 2012 8:52am
Hi Crucial Point,

From your previous posts, your entry and exit seem mechanical in nature. Have you automated or still trading manually? What are your thought on trading automation using vps?

I have to ask. . Does your indicator for money in money out derive any other information other than what exists on the chart?

Thank your for your time.
On the way
  • #47
  • May 16, 2012 2:53pm May 16, 2012 2:53pm
Quoting whtrader
Hi Crucial Point,

Does your indicator for money in money out derive any other information other than what exists on the chart?
According to the pictures, it doesn't.
Even if you fall on your face, you're still moving forward.
  • #48
  • May 16, 2012 2:59pm May 16, 2012 2:59pm
Quoting whtrader
From your previous posts, your entry and exit seem mechanical in nature. Have you automated or still trading manually?
And I too would be interested in the answer to this
Even if you fall on your face, you're still moving forward.
  • #49
  • May 17, 2012 10:11am May 17, 2012 10:11am
Quoting whtrader
From your previous posts, your entry and exit seem mechanical in nature. Have you automated or still trading manually? What are your thought on trading automation using vps?
This wont 'enlighten/inspire' you because what do you gain in knowledge/inspiration with such a question?

What is more important than such question is what elements are absolutely critical in YOUR system so that you can automate it?.

If you have a completely mechanical system, then of course you can automate it (why not?). Some people do,...others dont. Not because they cant, but because they simply dont want to nor need to.

Look at your monthly chart all the way back to early 90's and 80's.
Nothing ever changes, markets do the exact same things over and over again....to a certain extent. Its nothing new (although a very argued topic).

If markets continually repeat throughout history, then a system can be mechanical in nature.

Mechanical systems are dime a dozen, but many of them dont work for the simple fact they are static and/or edge-less (some do work over the longterm, as some of you reading this will know ).

But why stop there?

Humans are mechanical in nature, we are creatures of habit from the moment we wake up till the moment we go to sleep, yet at the same time we adapt to situations that occur during the day...

So the question is, can YOU build your very own mechanical-adaptive system?

Is it even possible to do such thing?

And if you do believe its possible, then what elements do YOU require to do this with?

Quoting whtrader
indicator for money in money out derive any other information other than what exists on the chart?
Can you clearly define and pinpoint all available information contained within a chart?

Can you clearly define and pinpoint all available information contained outside of a chart that could be implemented?

I sometimes get caught up looking at the wooden laminated floor in the house, yet tend to completely miss the big fat pink elephant laying on it.

The best way to hide something is by hiding it in plain sight.

(By the way anybody watch Breaking Bad? brilliant it is).
  • #50
  • May 26, 2012 1:25pm May 26, 2012 1:25pm
My preference would have been to catch the breakout of the 15-bar consolidation zone highlighted by the white box.
Attached Image
To improve is to change. To perfect, is to change often.
  • #51
  • May 26, 2012 10:05pm May 26, 2012 10:05pm
Quoting Pipalicious
Fire away...
Pip,

Analysis is a personal thing, but FWIW, here's mine:

(Referring to your chart in post #1.....) the large white candle that precedes the two small red ones may or may not be an exhaustion candle — we need more info to confirm either way.

The two small red candles confirm some kind of temporary exhaustion in the uptrend, but being small they lack any real conviction, hence we have no real way of knowing what will ensue (the different outcomes in scenarios (a) and (b) demonstrate exactly that!). In scenario (a), the engulfing white candle that follows suggests that buyers are re-entering with some enthusiasm, providing an upward technical bias, but nothing more. Breaking the resistance provided by the exhaustion candle tells me that the uptrend is more likely, than not, to continue. But without more info (see below) I have even less than a vague idea as to how far.

I don't place too much importance on individual candle shapes, primarily because candles have arbitrary cutoff points. For example, a GMT+1 br0ker's H4 candles will look very different to a GMT+2 br0ker's H4 candles; even though the price feeds are the same, the cutoff times are not. What I do look for is candle sizes (relative to their peers), and also volume, which (even though it is tick volume, and reflects the traffic of one br0ker only) can give an indication of shifts in buying/selling power. The most reliable candles that I know of are outside bars, or engulfing bodies, that follow a pullback — these can signpost a resumption of the prevailing trend.

But we are talking probabilities only. Absolutely nothing is certain. Your two scenarios highlight the folly of placing blind faith in a candle pattern, especially without other supporting info (what time of day is it? what is happening in longer term trends/timeframes? what are the strengths of the individual currencies in the pair? what S/R types exist nearby? is major news imminent? etc etc). All of this invariably has — or seems to have — a bearing on price behavior.

Hence I don't think it's necessarily helpful to "challenge a loser", if by that you mean asking "where or why did my analysis go wrong?". Everything else being equal, very few patterns (in isolation) work better than ~50% of the time, hence the answer is effectively "statistical fluctuation", or if you prefer more colloquial terminology, "bad luck". (In reality, it's not luck at all, everything depends on the orderflow — both current and imminent — about to be created by the buyers and sellers, but without a global order book and a crystal ball that tells us what orders are about to be placed, we don't have access to that info, hence it's "bad luck" from a TA-based perspective).

That's why I believe it's important to have a proven methodological edge (that might involve weighing several factors). Then, when a pattern fails, we're not blaming ourselves for a poor trading decision; once we start doing that, our confidence, and then our discipline, will quickly evaporate. The trading pros that I've been fortunate enough to talk to all say something like this: that trading amounts to executing the same mundane rules (or routines) day-in and day-out, for the same average result. Sometimes you win, and sometimes you lose; but their focus is on attaining consistent execution, rather than analyzing recent outcomes (wins or losses).

Just my 2c.

David
  • #52
  • May 27, 2012 4:00am May 27, 2012 4:00am
Quoting thelws
Interesting exercise. I guess since you have let the cat out of the bag and told the participants which is the real trade and which is the fake, my response should be kinda late.

But for the sake of discussion (and I swear I formed an opinion before seeing your most recent posts)

I would have voted to have "A" as the real chart. Also it is the most tradable chart. There is a valid breakout potential to trade on chart "A".

On chart "B" there is no valid patterns, no valid candlestick formation. There is no logic in that chart. Meaning,...
Hi Pip, I would agree with thelws to some degree..

1. Graph A is showing "compression candles" to break higher..

2. Then a momentum break out candle.. Resistance becomes Support and showing demand exceeds supply.

3. Then psychologically buyer will cash in some profit (there must be a mild resistance at this point), which will make the candle to retrace to the point of new support..

4. As at this point demand exceeds supply, buyers pending orders will be triggered causing more momentum to move upward.

5. This upward momentum will travel upto the point of higher resistance. Then buyers will again cashing in some profit..

6. At the same time, (depends on how strong is the resistance and the degree of supply and demand imbalance), the market will decide to take a rest or do a complete U turn (triggering sellers pending orders).


Therefore, Graph B is most unlikely to happen.. Even in the case of news it will first spike up to point mentioned above then travel down..

This logic applies to any TF. All is purely visual as any activity on the market is reflected on the chart.

IMHO..
Attached Image
  • #53
  • May 28, 2012 6:01am May 28, 2012 6:01am
Quoting hanover
That's why I believe it's important to have a proven methodological edge (that might involve weighing several factors). Then, when a pattern fails, we're not blaming ourselves for a poor trading decision; once we start doing that, our confidence, and then our discipline, will quickly evaporate. The trading pros that I've been fortunate enough to talk to all say something like this: that trading amounts to executing the same mundane rules (or routines) day-in and day-out, for the same average result. Sometimes you win, and sometimes you lose;...
Thanks for your thoughts on the matter David.

I guess another point im learning has to do with dissecting (if any) the underlying differences between a winning trade and a losing trade that both have the exact same visual pattern.

You see, my point wasnt so much about which one is real or fake, since both scenarios are possible.

The idea here, is to find out what data people would begin looking at to "see" the underlying difference between a trade that worked, and one that didnt.

Providing 2 trades are identical (one wins - one loses), what specific data could be analyzed to identify the underlying differences between the winner and the loser?

- Time of day?
- Chop/trend?
- News?
- ...?
  • #54
  • May 28, 2012 7:17am May 28, 2012 7:17am
Quoting Pipalicious
I guess another point im learning has to do with dissecting (if any) the underlying differences between a winning trade and a losing trade that both have the exact same visual pattern.
Pip,

I think the important thing (which many folk don't understand) is that patterns don't cause upcoming price movement. The only way that this would be possible would be if enough heavyweight players saw the same pattern that 'I' did, and interpreted it in exactly the same way, i.e. a self-fulfilling prophecy that was inviolable to any other possibilities.

For example, suppose I see a bullish pinbar on the EU,M15, and it causes me to place a certain trade. But other technical traders might see other patterns on other EU timeframes, and their (larger) orders cause price to move in the other direction. Then we have some big banks with a certain agenda for EU that happens to counteract that. And so on. The market is, at all times, a mix of unknown participants whose agendas are ever-changing, and completely unknown to us.

I remember reading a good anecdote in a Mark Douglas book, the story of a top analyst who was hired by a firm. The analyst explained to his new boss how he could predict turning points by using advanced technical patterns and levels. When soybeans price reached such a level, his boss said to him "OK, what you're saying is that price can go no lower, right?" The analyst said "Absolutely. This is the low of the day". His boss immediately picked up the phone and said "Sell two million beans at market", and within 30 seconds, the soybean price had dropped another 10c. The boss said "Now where did you say price was going to stop? If I can cause that, anybody can".

Another factor we must consider is triangular equilibrium, e.g. EU x UJ = EJ. Now the BOJ might suddenly and unexpectedly sell a huge quantity of yen, which has a greater effect on the UJ than the EJ. Hence the EU must necessarily move merely to keep the triangular balance intact.

In similar vein, we must also remember that every pair consists of 2 currencies. Shifts in the perceived value of either the EUR or USD will cause movement in EURUSD, which has nothing to do with technical patterns.

None of these are necessarily 'black swan' events; they are happening all the time. And my brief list is far from exhaustive. What I'm saying is that there are a zillion imponderables occurring simultaneously that we (especially retail traders) can't possibly account for, that are causing price to move; and technical patterns might, in many situations, figure very low in terms of the (big) orders that have the greatest effect on price behavior.

There have been some interesting threads on randomly generated ("fake") charts. Here is one. What I find thought-provoking is that these charts produce many of the same types of trends and patterns (channels, S/R or trendlines being respected, double tops, head'n'shoulders, etc) that we see in real FX charts, and yet the fake charts, being a completely random walk, could not be traded profitably by ANY trading system. Viewed another way, there is no causal link between a pattern and any future behavior, because every point is simply being determined randomly; the patterns in fake charts occur merely as a matter of chance. The conclusion is very sobering: we need to somehow prove that real charts produce trends and patterns that are qualitatively different from the fakes — that there is some kind of "intelligent design" present, if you like — in order to prove that profitable trading is no more than a completely fortuitous exercise.

What is my conclusion? That dissecting any underlying differences between two different outcomes stemming from what appears to be the same visual pattern, is likely to prove a fruitless exercise. IMO, it is the 'drivers' behind the patterns that are important, as they cause the price movement which subsequently creates these patterns; and we lack the info needed to analyze these drivers, which are ultimately a multitude of anonymous individuals whose agendas are unknown to us.

David
  • #55
  • May 28, 2012 7:17am May 28, 2012 7:17am
Quoting Pipalicious
.......
Providing 2 trades are identical ..........
- ...?
How can you say that? A couple of bars (2 to be precise) are. Meaningless in the grand scheme of things. Whether on a short or long term time basis.
  • #56
  • May 28, 2012 8:04am May 28, 2012 8:04am
Quoting Pipalicious

http://content.screencast.com/users/...20vs%20bad.png

Fire away...
"a" is a Trend , "b" is a wishpaw
"a" could happen most of the time
"b" could happen on high impact news
  • #57
  • Jun 10, 2012 8:10am Jun 10, 2012 8:10am
Quoting CrucialPoint
Challenging a Loser

[center]Important Note: These are not for sale. I will never ask money from anyone. Anyone who proclaims to be me or in association with me (CrucialPoint) are scams. Do not pay any money to anyone proclaiming they have these algorithm as they will never be for sale... ever.

***The indicators used here are NOT for sale.***
***These are exclusive and will NEVER be available to the public***
[left]
[center][size=4][b]1....
Quoting CrucialPoint
[center]So, let's see this on a Higher Time Frame, shall we?...:nerd:

Attachment



==================================

Here are some more examples;
of quantified breakout, and fake outs, continuations and counter-trends.
The pictures should be explanatory.

IMPORTANT: Don't bother me with questions of my system cause I will never share it.
Not even for a Price.


Fake out and Break out
Attachment


[size=3][b]Break...

All these just reinforces the fact that with the "right" knowledge, one will make it in this business. Thanks for ever starting those threads (now in the bin). They helped put together all the knowledge scattered in my head.
Attached Image (click to enlarge)
Click to Enlarge Name: thanks.gif Size: 22 KB
  • #58
  • Jun 10, 2012 8:23am Jun 10, 2012 8:23am
Not enough data, the chart doesn't have enough data really, but it's not that chart especially with limited data which dictates which way the market will go it's the buyers and sellers and how they value the market.

I'd likely short both on the turn, obvious be SL's out on the 1, but hopefully catch more pips on the winner than I'd lose on the loser.

Losses happen, but they have to be calculated losses and minimized, so tight SL's and tightening to BE and beyond as the trade moves.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #59
  • Jun 27, 2012 5:23pm Jun 27, 2012 5:23pm
I just re-read this post, and I believe it's 100% relevant to the discussion in this thread. (In fact it's one of the best posts that I've ever read.)

Topherhk88 explains why challenging a loser can be a pointless exercise, by making a similar point to the one I was clumsily trying to make in my earlier posts.
  • #60
  • Nov 23, 2014 6:39am Nov 23, 2014 6:39am
Someone referred me to this post but it looks dead?? Since I got a link here though, perhaps others still read it too?

The problem I see is that the proposed question is based on 1M candles. While it is true that the time frame has nothing to do with how candles look, they do determine overall market momentum, and thus the equilibrium value of the currency pair with the market. A few candles from a 1M time frame is an ineffective number of sample buys and sells to determine your entry and exit point.

It is hilarious to read the support and resistance answers, lol. Like any of that matters about anything) S/R never represents supply and demand and that is why nearly all these type of traders fail in Forex. S/R represents what happened "LAST" time, not what will happen "THIS" time.

Anyway, I have worked and worked and worked and worked at the 1M chart and personally determined that is cannot be used to determine market momentum within a currency pair. The best I can do is a 5M chart, however I use indicators within it that show me reactions on higher charts. You really MUST know market direction in order to know the length of your trade. In other words, are you trading with the current trend, or are you trading a reversal to it. The only way to trade, again in my opinion, with extreme success, is to develop a method to track the range and intensity of motion from the equilibrium.

I could import the candles pictured into my range system and tell you when to enter and when to exit, however, the range of a 1M chart has three flaws. One, it is not consistently large enough to trade for profit. Two, the number of trades taken makes the broker rich. Three, you really have no idea of the overall market direction, so you are subject to unknown and frequent head fakes.

Attempting to trade 1M charts means you implicitly rely on your ability to spot the tops and bottoms of each range. I have personally found that by finally ignoring the need for perfection, and instead concentrating on the middle of the trade where price is normally actually moving vertically, that I make consistent profit over and over and over. In order to profit from the middle of the trade though, there must be sufficient range between the high and low to cover the spread and still make profit. This is easier applied to charts higher than 1M.

Once you develop a range trading system and allow the tops and bottoms to cement themselves before entering and exiting trades, then your win/lose ratio greatly improves. Basically, figure out how to trade only when the market is moving up and down with momentum and you will rarely lose.
You cannot be extraordinary by being normal
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