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Pure Risk to reward trade System - 1 to 3- Totally random entries

  • #161
  • Aug 2, 2012 8:35am Aug 2, 2012 8:35am
Not good with the big moves today
I was all but wiped out with SL
I think this is because of the thin market and NFP tomorrow
the market was not random today
it was very clearly taking money and setting up for tomorrow

no math would have helped today lol

Cheers

TEB
  • #162
  • Aug 2, 2012 8:54am Aug 2, 2012 8:54am
Kind of tired of people talking of how the FX market is "manipulated."

They never seem to spell out just what they mean by that. Suspect that most often they mean that their stop was hit. ;-)

Ever wonder why the malefactors in conspiracy theories never seem to make mistakes? Perhaps because the theory was made up to match the known "facts?"

So, first, a definition of manipulation. "one or more entities acting in concert to move price to their benefit."

Has there ever been manipulation. I know of one well publicized, Soros. Not familiar with the gory details but he has been implicated many times in market manipulations. Obviously has won more of them than he lost.

So what? Did he cause others to lose? Obviously yes. Did others ride his manipulation to profits, of course.

When Drahgi gets up and says, "we are going to back the Euro no matter what, we really mean it this time." Is that a manipulation? It clearly moves the market, did he tell anyone beforehand allowing them to benefit? Perhaps.

It is obvious that people do things that move markets, that is what markets are, people making decisions about actions of other people. Do some people making trading decisions act in concert with others to form a trading cabal? It is possible but unlikely. For this to work, you would have to believe that there is honor among thieves. Is it likely that banks could organize against traders and never get caught? In todays whistle blower world, I think not likely. On the other hand do big players act in concert, based on TA, to close out longs and short in likely technical areas? I would say yes. Do they always win, no.

Finally, why do we think that these same activities do not apply to other markets? Depending on your definition of manipulation, it occurs in all markets. Does it prevent you from making money. Absolutely not, and it supplies some of the volatility needed to make markets move.

Manipulation occurs. You can profit in spite of the manipulation if you have a good plan that takes advantage of TA and proper MM. That is the point of this thread. Others have demonstrated the ability to profit with random entry and proper MM. It is left to each of us to find an edge that allows entries and exits that beat random.
  • #163
  • Aug 2, 2012 10:13am Aug 2, 2012 10:13am
you don't understand that even this world may be manipulated by a few people at a certain moment.

and that's fine since majority of ppl don't understand/believe this point.

however, ultimately, it doesn't matter the trading itself.

Quoting abdunbar
Kind of tired of people talking of how the FX market is "manipulated."
  • #164
  • Aug 2, 2012 11:34am Aug 2, 2012 11:34am
Quoting abdunbar
Kind of tired of people talking of how the FX market is "manipulated."

They never seem to spell out just what they mean by that. Suspect that most often they mean that their stop was hit. ;-)

Ever wonder why the malefactors in conspiracy theories never seem to make mistakes? Perhaps because the theory was made up to match the known "facts?"

So, first, a definition of manipulation. "one or more entities acting in concert to move price to their benefit."

Has there ever been manipulation. I know of one well publicized, Soros. Not familiar...
Quite clearly all winning trades are the results of careful thinking and deep technical analysis and all the losses are because of manipulation and nasty stop-hunting market makers.
  • #165
  • Aug 2, 2012 12:38pm Aug 2, 2012 12:38pm
Quoting TEB63
Target 158 pips (the 8 pips are to cover the spreads on the entries average 2 pips a trade)
Stop loss 50 pips
Wouldn't you be better using a stop loss based on ATR or something similar to avoid getting whipsawed?
  • #166
  • Aug 2, 2012 8:20pm Aug 2, 2012 8:20pm
Trade 19 Thru Aug 2, 9:19pm gbpusd sell 1.5515
dice rolls 6 and 5
  • #167
  • Aug 3, 2012 5:05am Aug 3, 2012 5:05am
Trade 20 Fri Aug 3, 6:03 am eurpusd sell 1.2238
dice rolls 1 and 5
  • #168
  • Aug 3, 2012 12:59pm Aug 3, 2012 12:59pm
As my son would say epic failure lol

I think the thin market and yesterdays move was a killer
NFP is always crazy as well

I thin k in the fall when things are mornally I might try this again

cheers
  • #169
  • Aug 3, 2012 7:27pm Aug 3, 2012 7:27pm
Quoting TEB63
I thin k in the fall when things are mornally I might try this again
Will follow again !
MT4/MT5 EAs/Indicators/Alerts coder
  • #170
  • Edited 9:35pm Aug 3, 2012 9:31pm | Edited 9:35pm
Sorry TEB63 but this sytem (or any of its kind) will always fail.

Let me explain why.

1) The RRR rules makes failure a near certain outcome
----------------------------------------------------

You assume a winning trade of 158 pips has the same likelihood of occurring as a losing trade of 50 pips. Hence you define "random" as having the same chance of picking a winner vs a loser. This is a fatal flaw. That might be true if you were to assume an equal chance of a trade gaining 50 pips or losing 52 pips (accounting for the spread). As soon as you say I have to get 150+ pips on one side versus 50 pips on the other side, the shorter side will win a vast majority of the time.

In this instance your RRR rule undermines any successful outcome. A RRR rule when applied randomly will NOT increase your chance of gaining pips but instead decreases your chance.

2) The Money Management Rules do not help
--------------------------------------------

Money management does not increase odds of winning any given trade. Money management is to limit loss and risk exposure.

You define Money Management as only risking 1% of your account. That is not money management that is just slowing the rate of loss (and conversely the rate of gain).

3) Not all Currencies Pairs are equal
-----------------------------------

You do not account for the range of price fluctuation differences between various currency pairs. I do not trade the AUD/USD because its Average Daily Range is a low 106 pips as opposed to the EUR/JPY with an ADR of 208 pips. A trade in AUD/USD is less likely to gain 150 pips over a course of a week than is a trade in EUR/JPY. On the other hand a stop loss of 50 pips will get triggered more quickly and more certainly in the EUR/JPY than in AUD/USD. Though you select currencies randomly, there is not an equal chance between different pairs of hitting your target or getting stopped for a loss.

In conclusion, your results are just about what I would have expected.

I wanted to further explain technical analysis versus fundamental analysis and why both can and should work together to increase the odds of a winning trade or series of trades. Some of the comments I read beg for such an explanation. But I will follow the susequent replies (which I suspect will be angry and indignant) and post accordingly.

Happy trading.

Trader_dj
  • #171
  • Aug 4, 2012 4:41am Aug 4, 2012 4:41am
Quoting TEB63
As my son would say epic failure lol

I think the thin market and yesterdays move was a killer
NFP is always crazy as well

I thin k in the fall when things are mornally I might try this again

cheers
1) those recent big moves are good for your strategy. Blaming them for failure is...weak
2) aren't your at least going to acknowledge that the results of your own experiment back up the arguments of your critics?
  • #172
  • Aug 4, 2012 6:32am Aug 4, 2012 6:32am
Quoting TEB63
As my son would say epic failure lol

I think the thin market and yesterdays move was a killer
NFP is always crazy as well

I thin k in the fall when things are mornally I might try this again

cheers
I think it would be easier just to run some tests on very simple edges with varying risk reward ratio's...

or I should say, more beneficial
tradewith60
  • #173
  • Aug 4, 2012 1:22pm Aug 4, 2012 1:22pm
Quoting ohboy
1) those recent big moves are good for your strategy. Blaming them for failure is...weak
2) aren't your at least going to acknowledge that the results of your own experiment back up the arguments of your critics?

my critics????????????lol

ROFLOL
I do not think I am important eneogh to have critics lol
It was to be a fun thing.
I was amazed at some of the people and what they said.

I think people needed to read my 1st post were I was clear I was using
a Demo account

BUT back to your post
why would the big moves that moved 50 to 60 pips both ways in a few hours be good for this system?
my stop losses were 50 and your targetrs 150?

Buddy ....there have been a lot of silly thing said over the last 2 weeks
but I think you may take the cake!
lol

cheers
  • #174
  • Aug 4, 2012 1:24pm Aug 4, 2012 1:24pm
Quoting 60minuteman
I think it would be easier just to run some tests on very simple edges with varying risk reward ratio's...

or I should say, more beneficial
of coarse but not as much fun
trading can be a bit boring
  • #175
  • Edited 1:56pm Aug 4, 2012 1:27pm | Edited 1:56pm
Quoting abdunbar
Kind of tired of people talking of how the FX market is "manipulated."

They never seem to spell out just what they mean by that. Suspect that most often they mean that their stop was hit. ;-)

Ever wonder why the malefactors in conspiracy theories never seem to make mistakes? Perhaps because the theory was made up to match the known "facts?"

So, first, a definition of manipulation. "one or more entities acting in concert to move price to their benefit."

Has there ever been manipulation. I know of one well publicized, Soros. Not familiar...

I totally agree with you
I would say again its not so much about the math
as seeing trading as being a flea on the back of the elephant
the FX gods (elephants) will go where they will go
if we just follow them we will win
cheers
  • #176
  • Aug 6, 2012 9:23pm Aug 6, 2012 9:23pm
Quoting 60minuteman
and even if it did work... how you gonna feel when it's a real 100k on the line...
The above post is the key point on this thread. The difference between demo and live is like the difference between night and day. And it all boils down to how you feel during a drawdown. It is then that you need absolute confidence in your strategy's edge in order to stay the course and not toss your system into the trash can.

TEB63, the question you should contemplate is, assuming the backtest is acceptable, whether you could trade this system on a live account with a meaningful sum of money (to you) and be in a drawdown and not twitch because you have the utmost confidence in the system's edge. If in your heart of hearts the answer is yes, then you should continue with the test through thick and thin and not let a single NFP or the month of August dissuade you. If not, then this exercise becomes a waste of your own valuable time.
  • #177
  • Aug 15, 2012 6:49am Aug 15, 2012 6:49am
Quoting TEB63
Pure Risk to Reward trade System - 1 to 3- Totally random entries

I opened an Oanda Demo – $100,000 cad
I will put two trades on a day for 10 days - So I will put on 20 trades
One trade before 8 am in the morning (Monday morning to Friday morning)
One trade after 8 pm at night (Sunday night to Thursday night)
[font=Calibri][size=3]I...
Top of the morning to you!

I thought your experiment was worth a go.Liked the idea!

Anyway seeing as you have had 17loser and 3winners and someone mentioned the problem was that 50pips is closer to reach than 150pips.

So why not make your TP50 and SL150

Based on your current results if your TP and SL was inverted you would have made 400pips

17X50= 850 would have been winners
3X150=450 would have been losers
850 - 450 = 400

Not that it makes good trading sense to trade in this way.But you will never know if you don't try.

Would you think of Trying the experiment again?

ROOI:nerd:
We miss 100% of the shots we don't take
  • #178
  • Aug 20, 2012 6:42am Aug 20, 2012 6:42am
Quoting Trader_dj
Sorry TEB63 but this sytem (or any of its kind) will always fail.

Let me explain why.

.......

3) Not all Currencies Pairs are equal
-----------------------------------

You do not account for the range of price fluctuation differences between various currency pairs. I do not trade the AUD/USD because its Average Daily Range is a low 106 pips as opposed to the EUR/JPY with an ADR of 208 pips. A trade in AUD/USD is less likely to gain 150 pips over a course of a week than is a trade in EUR/JPY. On the other hand a stop loss of 50 pips...

How did you calculate this ranges? It`s an interesting point of view for intraday traders.
  • #179
  • Last Post: Aug 24, 2012 12:23pm Aug 24, 2012 12:23pm
Quoting billbss
He believes that random entries with a fixed SL and TP will generate a profit.

I have no idea where he got that idea. It won't work over the long haul. It won't work regardless how he handles the high risk merchant account SL and TP.
Precisely but I will also try looking for it and will have an update so that I can have a new and fresh idea about it.
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