Could this be an easy way to win in forex?

This is not a mockery. This is not a joke. This is not an empty discussion. (And hopefully the mods don't think that this is a "rookie talk" material). Follow the logic, and you just might find a forexlightment =)

Let's start with the almost-axiom that majority of traders lose money. These traders cannot be called traders, because real traders make money. Real traders have the discipline, knowledge, and persistence. Gamblers have the money, time, and disrespect towards the market.

But from these gamblers, I seem to have found an interesting trading concept.

The worst trading method/strategy/indicator/EA + a proper money management skill = the easiest way to win in forex.

Easy, but it doesn't mean it doesn't have its own challenges to create such system.

Now, I'll be gentle to build up my discussion as to not scare you away from what is potentially useful for you, or labeling me as cuckoo over the nest.

Most of the gamblers use free/paid scam system. And most of these systems are purely technical systems. The best advice they give in respect to fundamental analysis is to avoid news release. Then most of these traders use these systems and lose money.

Now let's cover our definition of winning and losing trade. Would you consider a trade that suffers 200 pips drawdown, 5 overnight swap charges, then made you a 10 pips profit after 5 days, a winning trade? And would you consider a trade that suffers 10 pips stop loss, then immediately price goes 200 pips in your direction, a losing trade?

I came to a realization that money management is as critical as any other aspects of your trading. With terrible money management, you can consistently lose with the best forex system in the world. On the other hand, with a proper money management, you can easily and consistently win with the worse forex system in the world.

How?

Here's how. Say you buy/get a forex system that consists of purely technical indicators. When 3/4/5/6/7 indicators fire a buy signal, you open a buy. When 3/4/5/6/7 indicators fire a sell signal, you close that buy and open a sell. Say the manual asks you to put 10 pips SL and 20 pips TP as money management. Then you live demo this system for a year, and ends up with 20% winning rate. Winning means it reaches the TP, not manual close. This is very important, you have to stick with the rules of the system. And this also means 80% of the trades hit the SL.

Most of you would probably say that this is a terrible scam forex product. I beg to differ. What does it mean to have 80% of your trades hit your SL? It's a pretty damn ACCURATE system if you take the complete OPPOSITE signal every time it fires a signal, USING the exact money management technique given by the system. So when it gives a buy signal, you take a SELL signal, BUT STILL USING 20 SL and 10 TP to completely reflect the opposite of the original system.

Very very basic example, I notice if you use semafor indicator that repaints every time it hits a new high or low, and trade the OPPOSITE of the signal, WITH proper money management, you'll be doing pretty good.

But hold your gun there son, this doesn't mean you have a Holy Grail, this doesn't mean you can simply switch any poor performing EA signal to do the opposite. Like I said, there are challenges that come with this idea. Many in fact.

First, we have to find the worst indicator(s) ever built by a homo sapien, and most importantly, it must CONSISTENTLY fires a wrong signal. We have to use indicators, naked trading doesn't count because majority of losing traders use indicators. We are simply finding a way to reverse the "advantage" that these losing traders have.

You think this is easy to do? You think scam/free/paid products out there are this "good"? I've been toying with this idea myself for a while, and I have yet to find a consistently poor performing indicator. In a way, it is as hard as finding a consistently great performing indicator.

So came another puzzling puzzle that I found from this experiment: After seeing hundreds of forex systems, none of them are actually really, really, really, terrible. At best, or worst, you find a ~30% winning system. Out of 10 trades, your SL is hit 7 times kinda. You can actually see from the indicators in past chart that some of the signals are actually pretty good. So poor performing system cannot be attributed solely to the bad method/indicator/EA contained on the system, but also the money management aspect of such system. Could it be, could it actually be that all losing traders are simply bad money managers? That had they are given the best forex system, they would still lose? That their itchy click finger toy with their SL or TP or lot size, and turn a mediocre system into a poor one? That their own fear and greed sabotage their own success?

Anyway back to the topic. If such consistently bad performing indicator is found, then forex becomes really easy. Make it an EA and switch it on 24/5, you'll be laughing your way to bank real soon.

I'll talk more about my findings as this thread continues. For now, it's probably time to dig out your recycled bin. Try to recall the worst performing indicator. Who knows you can actually flip it to a winning system.

Best to trade your account and not the price - or some indicator or "system"

You don't need an indicator to be a "bad" trader. Also, reversing a system that is consistently losing does not mean it will consistently win. With that said, there are lessons that can be learned from studying a losing trader -- with regards to trade entries, exits and money management.

yeah, read hanovers posts on this issue. i think he explained several times why this is a pipe dream.

Could this be the easiest way to win in forex?
PROPER MANAGEMENT SKILL is important but I believe what makes a trader is a combination of all necessary aspect in trading like mastering entry, stop loss, take profit, trading psychology, a decent trading style/technique and etc.

"Trading is like cooking you can't put up a great food with only one ingredient"

Why people lose:
They don't understand they are not suppose to. The account IS the thing, nothing else is more important than a + or - in the account.

I have been down this road, unfortunately it is not so simple. Good luck anyway.

Thanks you to share your opinion.. Take Cycle indicator. When green see sell, red see take buy.. Simple..my little bro do this every weekend also have mln $$$

Guys, guys, you over complicate things. You have given intelligent responses, but don't let your expertise and experience close your mind. It's like a medical specialist who refuses to acknowledge a simple cooking ingredient like garlic to contain one of the most potent anti-bacterial agent in the world simply because it is never mentioned on their 100 textbooks and they never read it in any of the journals during their 20 years of practice. Just imagine, briefly, you're a complete noob to forex, and you'll find this idea feasible.

Of course, I'm not saying the idea will definitely work. It's not a matter of simply switching trade signal. This is why I told you there are many challenges with this idea.

I said it would be easy, because you don't have to study anything, spend thousands on gurus/book/methods, care even about the news and politics. You simply have to spend time searching for free crappy indicators on the net. It sounds easy to me. I can do it on the weekends.

Now, in theory, if you trade a system with 10 SL and 20 TP, and within a year you lost 80% and won 20% of your trades, isn't this a matter of fact that had you switched all your trades + remaining true to the money management rule (this is what makes this concept different) you would've won 80% of your trades and lost 20% of your trades? Trouble is, when people switch the signal, they don't switch the MM. They use 10 SL and 20 TP on the new direction, creating a partial opposite of the original.

I said it again, simply switching trade on a bad system won't change anything. Test it on any EA and you'll understand. But switching trade on consistently bad system + remaining true to the strict money management rule = possibility of a constantly winning system.

The biggest challenge is still to find the crappiest and the most consistent indicator in the world. The next big challenge is to experiment with the optimal SL and TP setting. This will have to go through trial and error. Putting 5 SL and 10 TP would give a different result then 10 SL and 20 TP, or any other combination.

@Mingary: I don't understand what you're saying.

@Myo: I would love to hear what hanover has to say about this new angle.

@Wanderer272: I agree, it's not so simple. But worth a try.

@Naokia980: You're welcome, but I just wonder how your little brother trades on the weekends, considering all markets are closed on weekends.

X 2 Read Hannover's posts on the subject! Having proper money management skills without a proper edge, simply means you'll take longer to lose all your account balance. Death by a thousand cuts instead of the typical supernova account blowup.

Also 99.9% of the time, you cannot turn a losing system into a winning one by reversing things like buy/sell or tp/sl, as most of those systems generate nothing but random signals. Think about it! Does it make any sense reversing random signals, or their tp/sl for that matter? The chances you find an ANTI-HOLY GRAIL are the same as finding a HOLY GRAIL: 0 (zero).

Most people lose, because they're just human, too human. They realize all too well, they won't be making any decent money anytime soon, trading their small account with proper money management, so as you've mentioned, they end up risking way more than they should. And, without exercising proper MM, having a good/bad system it's all the same. Thousand cuts or supernova, doesn't matter, account will end up dry.

People should really be thinking about possible losses, not possible profits. Being a trader is not about making a profit. Anyone can make a profit! Being a trader is about making a profit with low draw down. Losses in check, controlled. There's no get rich quick here. Getting paid (compounding) takes time. A lot of time. Patient people get paid.

Again, it's not at all about random signal like you said. There is nothing random about this idea. I've capitalized the word CONSISTENT enough time to highlight the importance of having a consistently crappy indicator for this idea to work.

Ok, let's start by answering the question above:

You have a trading system with 10 SL and 20 TP, and within a year you lost 80% and won 20% of your trades. I would consider this crappy system to be consistently losing.

What would happen had you switched all your trades + remaining true to the money management rule? Meaning switching every BUY 10 SL 20 TP into SELL 10 TP 20 SL and vice versa.

Hey Ishanta

I see it like this... Losing systems lose because they never had any type of predictive value in the first place, or the failure of a human to stick to dicipline might turn a winning system into a losing system. They were never capitalizing on any inefficiency in the market to begin with. At best they have the creator an excuse to pull the trigger and rules on how to manage the shot.

Strip away the indicators and the lines and the price action of a losing system and perhaps flipping a coin may have provided better results.

Reversing the signal therefore is just like heads coming up instead of tails

bottom line is you are flipping a coin and relying on luck and money management. Now combine the fact that you are virtually competing against banks and players who do have an edge and are exploiting real inefficiencies then combine as well the fact that the market movers know full well about psychology and how to shake you and scare you in and out of trades... Well, long story short, how far are you going to get flipping a coin? Heads or tails, gamblers lose to the casino, also your coin has a spread =p

put a sell stop underneath every zig-zag bottom, and a buy stop at every zig-zag top. This indi repaints like a son-of-a-biatch. Give it a go. Personally, i aint trying this, perhaps a demo for fun, but this post with chart shows something interesting.

http://www.forexfactory.com/showthre...45#post6804545

I would also add that yes if you reversed a series of losing trades the you would have probably won all things considered. But that was yesterday!!!!

True Cindy, but for an indicator to produce 80% of wrong trades over a year, the indi must consciously or unconsciously respond to the market efficiency that you mentioned. Again, this is not the same as flipping coin. This indi would purely and mathematically decide the worst entry to a trade, almost every time.

But again, let's start by answering my question above. Someone either find the flaw in the logic or find this idea plausible.

I admit, there is weakness in this idea. 80% losing trades this year doesn't mean at all it will be losing 80% next year. Like most people say, market changes all the time. But say this indi is backtested for 10 years worth of data and CONSISTENTLY made a bad call for say 70% of the time, WITH THE STRICT CONDITION that a particular SL setting is hit, then the opposite of this indi + original MM setting makes this a pretty darn good indi.

I'm focusing more on the MM setting part of this indi. It is the trial and error that could make this a game changer. Forget about banks, forget about anything else for now. Imagine, just for this idea, you're playing a video game of forex. Your scope of control is only the chart and the indi, nothing else.

I'm trying to make it easy peasy. Simplifying forex to a mere change of price. It could turn out to be a bad idea, or a good idea. I don't know until I've tried it. I'm not prejudiced. I'm not judgmental. Being any of them proves too costly in life.

That's a good start, just like my experiment with semafor indicator. But backtesting is an ABSOLUTE must. This is one of the main backbone of this idea, the other being the MM setting.

It is incredibly difficult to find a statistical edge of more than 50% in the long term. I have spent countless hours researching this. It is basically impossible to create a system that loses 80% of the time with a 2:1 R/R - long term. That will basically mean that you can predict the inverse of the market with 80% accuracy. You will learn much on the journey however...

That's why I'm a purely discretionary trader. Every trade is different, trading becomes an open field. That's what works for me anyway.
But system traders would only know long term success if they know WHEN to execute their system and when NOT to. imo

forex is a one way market you either lose or lose no one will win in it alone they created this market to take liquidity easy liquidity from people .(this is insider information i have knew from 1998 from a collage that had deep connection with certain organizations and i remember his words that they will make a challenge that will harm people integrity and no one will win it )

banks and hedge funds have teams that work in this market and they have information and more power so i advice any one not to waste his money effort time in this bad market .i am developing trading systems to help out people and it works in all markets and i studied this market very close and you will end losing your money and half people writing here are brokers advertising agent this how they live .
i dont mind sharing some money with them but sharing is something and taking my and your hard money is something else .


dont waste your time moments are valuable and you will regret it so deep one day and realty there is no profit only pennies that you make so hard then lose so fast i know this words hurts but they are the truth
all have a nice day

You have insider information that the markets were created to supply and increase liquidity?