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My experiment hurts my opinion of tunnel/swing methods

  • #21
  • May 18, 2006 2:21am May 18, 2006 2:21am
Quoting Mr Trend
Re: the dollar. Who cares where it goes... if you follow the trend, you can ride it wherever it feels like going. While all the fundamentalists are going whacky trying to second guess it, you're sitting back thinking, "Who cares where it goes -- I'm making stacks of cash even if it crashes..."

People (I'm not talking about you, mind you) who get wrapped up in the, "It HAS to turn around!" game are trying to predict.
Agree totally...

Quoting MuddBudda
You're correct that trend trading in a heavy trend is very profittable. If I remember correclty, vegas said a few days ago that the system may not perform as well in heavy trends. I can understand this since he and I share many of the same ideas. I don't use his system, but I understand the concept and how it would fail in such a situation. But who's fault is that? Not vegas'. To rely on one system in a changing market trend is financial suicide. At the very least, modify the sytem to adapt to the change rather than abandoning it at the first hint of failure.
Vegas system is based on the price always coming back the the mean... This is why his system will work in any major market because the system is based around PRICE nothing more than that. It works better in some markets than others , things like OJ or Electricity work perfectly because the factors surrounding the commodity have an effect on his system. IE if the price of Orange Juice becomes too expensive , people switch to apple juice. So the price in essence is tagged to the mean in various ways, perfect for his system. A system and strategy should be based on working in all markets along with you education. I think that fibs and trend trading both have merits and use both of them on a daily basis and work very well and are profitable. The important thing that a lot of people forget when they are trend trading in forex is that they base it on a daily range forgetting the people that "own" the market don't trade that way. Bank traders are all trading on a intraday basis , so you trend trading system has to be based on that. "Too beat your enemy you first have to think like him" The thing to concentrate on is not if Vegas system works or not in the present market, but that fact that it is a well thought through,logical structured approach to trading that consistantly derives profits.

Quoting Far From Average
This is not how the market behaves all the time. Most people will tell you the market ranges somewhere like 80% of the time. So, when the market is ranging, your trend following system will take it in the behind while Vegas' prospers. So, you've either got to stick with it and take your drawdown, modify it to decrease drawdown like Mudd suggests, or you will have to develop a way of determining when we're trending and ranging and trade differently for each condition.
I disagree.... Have a look at the weekly chart on cable over the last 4 years , the market is always trending. Remember that forex is unlike almost all other markets is the fact that it is really traded 24 hours a day and concequentally by the very definition a market within a market within a market (people trading only the week chart , only the 15 min chart , 1 hour chart etc etc) so by this very definition it is a market that is trending within other markets. Just because the particular system you are using says that it not trending doesn't mean that somewhere within a different time frame someone else is not trading a trend..

Quoting mrmikal
Why is it bad for someone to switch systems once he has identified an exploitation that another system doesn't take advantage of?
I don't think it is , I think that it is the mark of a true trader. There are 2 sides to the coin , for someone starting out , how would they really know that is has changed and to use the other system till it was all over. For me it was the break in the trend line to the upside on the cable on the weekly chart , I knew that the market would be moving for long for a decent amount of time. But that is me from years of experience , but to the average guy with 12 months under his belt would not know. So using 2 different system at different times would end up having the benefits of neither and loosing faith in both system. It is better for the new guy to stick with his system that for a couple of weeks or what ever looses him pips but keeps faith in the system , so that once it is all over his gets back to normal and starts to consistantly make profits again.

My 2 cents worth , hope I haven't upset anyone , wasn't meant to be that way.

Happy trading

Bear
  • #22
  • May 18, 2006 5:10am May 18, 2006 5:10am
i dont know, if this fits into the topic, but i think there a general problem with what you can call "trading models"...

model 1 goes like "plan your trade and trade you plan" and model 2 goes like "trade what you see, not what you think"

theres some contradicting element here i think which can lead to a lot of confusion.

cause model 1 says basically, make a plan, that is a projection of what a market SHOULD do (based on technical or fundamental analysis)...then look if it does behave the way it should or not and act according to it....

model 2 says, dont make any predictions or projections, avoid any sort of bias, dont think about what a market SHOULD do, instead, just watch where the market goes and follow. period.
  • #23
  • May 25, 2006 9:32am May 25, 2006 9:32am
OK East you asked for it...
Quoting eastmaels
Wow Thom...Man, you got a pic of AccreteCamp? I gotta see it..

Regards,
East
Hi my EasternBro!

Here are a couple shots of my backyard:

Elk, Deer, and other wildlife year round...
http://www.accrete.com/postimg/campaccrete01.jpg

And a nice quiet river to go kayaking and canoeing in..
http://www.accrete.com/postimg/campaccrete02.jpg

Best time of the year is in first half of October (cuz we do get 100+ inches of rain to keep all this green!).

This is where i go once my trades are in and my TPs are set, it's a nice place to chill out and be thankful for life and get my mind off the charts.

: ) Thom
  • #24
  • May 25, 2006 10:48am May 25, 2006 10:48am
Wow Thom,

That's what I'm talking about! Nothing refreshing but seeing green nature..
Very relaxing WesternBro..

Man, I ache for this kind of views...
You've seen Fiji's view too right? I wish I also had a views similar to yours and Fiji's... But for now, I'll stick with wallpapers..
Another part of my dream.

Thanks bro!

East

Quoting accrete
OK East you asked for it...
Hi my EasternBro!

Here are a couple shots of my backyard:

Elk, Deer, and other wildlife year round...
http://www.accrete.com/postimg/campaccrete01.jpg

And a nice quiet river to go kayaking and canoeing in..
http://www.accrete.com/postimg/campaccrete02.jpg

Best time of the year is in first half of October (cuz we do get 100+ inches of rain to keep all this green!).

This is where i go once my trades are in and my TPs are set, it's a nice place to chill out and be thankful for life and get my mind off the charts.

: ) Thom
  • #25
  • May 25, 2006 1:07pm May 25, 2006 1:07pm
Quoting Bear73
Quoting mrmikal
Why is it bad for someone to switch systems once he has identified an exploitation that another system doesn't take advantage of?
I don't think it is , I think that it is the mark of a true trader. There are 2 sides to the coin , for someone starting out , how would they really know that is has changed and to use the other system till it was all over. For me it was the break in the trend line to the upside on the cable on the weekly chart , I knew that the market would be moving for long for a decent amount of time. But that is me from years of experience , but to the average guy with 12 months under his belt would not know. So using 2 different system at different times would end up having the benefits of neither and loosing faith in both system. It is better for the new guy to stick with his system that for a couple of weeks or what ever looses him pips but keeps faith in the system , so that once it is all over his gets back to normal and starts to consistantly make profits again.

My 2 cents worth , hope I haven't upset anyone , wasn't meant to be that way.

Happy trading

Bear
Well said Bear! New traders, having no sense of the market's current state and also having two systems, usually end up wearing a fur coat in summer and a short sleeve shirt in winter and lose faith in both to provide comfort. But if they start out with only the shirt or only the coat and wear it year round, they learn over time that the garment can be trusted at certain times. This leads to being able to discern the changes in season, and results in being able to have both the shirt and the coat and to know when to use each.

This is why I encourage new traders to pick ONE system and stick with it until they know it inside and out. In season and out of season. I give this recommendation knowing full well that they need more than one system, but tempered with the knowledge that starting out with more than one system will only server to increase their confusion.

You're a pretty wise old bear, you know that?

Dial
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  • #26
  • May 25, 2006 1:46pm May 25, 2006 1:46pm
Quoting diallist
..This is why I encourage new traders to pick ONE system and stick with it until they know it inside and out...
Dial
OK Dial, now i'm feeling a bit like a disobediant child.

I understand that for a newbee this compulsive doodlin' and changing between systems is negative, just wanted to let you know that I agree w/you on that point for sure. With that in mind i share the following:

You know i'm a compulsive tinkerer...(this Memorial Day weekend marks my 1 yr anniversary in FX) and that i began doodlin' with the moving average numbers on the Vegas model about 3 or so months after discovering it last summer/fall. Do you think that one man's time frame for the "inside and out" (not that i ever achieved such wisdom...yet) can be another's "Ah, Ha" moment? (don't know if that makes sense).

My curiosity led me to dig deeper and come to a decision to use XYZ moving average all based on my own doodlin'/research, because to my eyes it "Fit" what i was seeing in PA over a broad range of time frames and currencies. . . then months after my self discovery, i found two trading groups (Woddie and Raghee) had "discovered" the beauty of utilizing the same XYZ MA! So i can assume that at times what MrMikal mentioned about "exploitation" might apply to some doodlin' with certain doodlers like myself?? And that this might be a positive thing at times because it might lead to a wonderful thing ; - )

end of ramble.

Cheers,
Thom

PS MrMikal and Bear, great posts
  • #27
  • May 25, 2006 2:02pm May 25, 2006 2:02pm
Quoting peter100
i dont know, if this fits into the topic, but i think there a general problem with what you can call "trading models"...

model 1 goes like "plan your trade and trade you plan" and model 2 goes like "trade what you see, not what you think"...
Good post Peter.
Though my basic model is well under way of finalizing (if anything any of us creates can be "final" LOL), this one area you mention above is creating some deep thought in me as i've been captivated by both camps of thought (Model 1 and Model 2 groups).

For instance, I recently read B W I L C and am facinated by many of the thoughts/concepts shared in the book, and I am implementing some of the ideas into my "plan". In one particular area, it fits into the M1 camp especialy with regards to the benefit of knowing fundy analysis. Then i come to the FF or other groups and there is such a bent toward M2 philosophy.

Bottom line for me is i hope there is a melding of the two out there...an M3? Actually as i write this last paragraph i'm reminded that maybe M3 is what the author of the above read is trying to get across as being neccesary to trade profitably, but i'm still learning the basics on that one.

: )
Thom
  • #28
  • Sep 11, 2006 1:41am Sep 11, 2006 1:41am
Quoting mrmikal
Again, you're assuming he was actually "attacking" Vegas' system. It is true that VWB is a tunnel-based system...and you have every right to come to that conclusion...

Let's just ask him:

Mike, are you saying your system is explicitly better than VWB? and if so, why do you think that? furthermore, how well does your system handle range-bound markets? Were you able to get positive backtest results? Any input you provide would be most helpful. Thank you.
Damn, I just wrote a veritable Magna Carta reply, and it all got lost because this site is below par in how it handles session cookies and timeouts and stuff.

I'll write it again, but basically I want to apologize for starting this discussion and not being in it. Thanks to mrmikal for defending me, and he was right that experimentation is what I'm all about. I live my life as a scientist.

I did an experiment, and I made 800 pips in 3 weeks. I think I proved the statement from the Vegas documents that there's nothing stopping the price from getting beyond even the extrerme fib levels. But I'm not claiming anything: So what if I do something one time? I agree with that.

The way science works is that people report their experiences honestly, and the community report whether they get the same outputs from the same inputs.

Now, on the level of what I do to make money personally in Forex, VWB is the best. It's the best for me because I'm used to it, but it's not for beginners. It only works for me because I've learned price action analysis and have a bunch of other stuff in my toolbelt.

This time I'll copy my post to my clipboard so I won't have to write it from scratch if the server clears the buffer when it asks me for my password. Please, Forex Forum, fix this problem.
  • #29
  • Last Post: Sep 11, 2006 2:39am Sep 11, 2006 2:39am
having had this happen many times on forums when I write a huge ramble copying to the clipboard is a good idea. Somehow it's just not as good the second time
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