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The gg53 "Killing Zone"

  • #2,101
  • Nov 15, 2013 11:42am Nov 15, 2013 11:42am
Quoting chjungen
Thank you G. I've just donated now. Hope other people will donate too to help the poor people in the Philippines who lost everything. Chris
chjungen,

Thanks you, Chris.
All: It really is a small thing to do and it can really make a difference.
In the current situation there - that small thing can mean the difference between life and death.

Please join Chris and others, and donate.
Thanks.

G.
  • #2,102
  • Nov 15, 2013 11:51am Nov 15, 2013 11:51am
Great idea Gg53. You motivated me to do it.

And Deal News through this link will match any donation made:

http://www.redcross.org/cm/dealnews-pub
  • #2,103
  • Nov 15, 2013 12:18pm Nov 15, 2013 12:18pm
Quoting gg53
Off topic but should be MAIN Topic right now: Please try to donate to some charity/organization helping the Philippines. Thank you. G.
Very very good idea G.

Have made mine couple of days ago.
  • #2,104
  • Nov 15, 2013 12:22pm Nov 15, 2013 12:22pm
Quoting Poocher
Great idea Gg53. You motivated me to do it. And Deal News through this link will match any donation made: http://www.redcross.org/cm/dealnews-pub
Poocher,

Thanks.
I posted that link also in the FF forum "Ultimate Truth".

G.
  • #2,105
  • Nov 15, 2013 10:07pm Nov 15, 2013 10:07pm
Quoting Poocher
Great idea Gg53. You motivated me to do it. And Deal News through this link will match any donation made: http://www.redcross.org/cm/dealnews-pub
Thanks GG and Poocher -- donated. My prayers are with those who lost their loved ones in the tragedy.
.
  • #2,106
  • Nov 16, 2013 4:46pm Nov 16, 2013 4:46pm
Donated. And want to encourage others. Do the same.

Thank you.
  • #2,107
  • Nov 16, 2013 6:57pm Nov 16, 2013 6:57pm
created account just to say thanks for you gg53 for the great concept of trading.

thanks.
  • #2,108
  • Edited 6:49am Nov 17, 2013 4:40am | Edited 6:49am
Will Donate today.

Quoting Dewey McG
....The big traders like to take these out, so price will often move towards these.... {image}
Mostly traders' and vendors' ideas of why price moves is based on lots of opinions, and very little, if any, knowledge.

A working paper by Norges Bank presents a fairly thorough analysis of the major players and their effect on price movement.

It uses real data, not traders' and vendors' unsupported opinions and guesses. http://www.forexfactory.com/attachment.php?attachmentid=1311282&d=1384351119

I've worked and studied with several professional traders, a major hedge fund manager, bank trader/manager, and prop shop traders and managers covering stocks, commodities, options, currencies and have had a glimpse at what they do, and what they know, and don't know.

They were good and they hedged their bets to protect themselves, but they did a lot of guessing too. The prop shop used std. dev.'s instead of ATR, and layers (same size) instead of martingaling (which no one should ever use unless it's absolutely appropriate! And it's never appropriate!)

Does it help me trade better? Not really. Price creates recurring patterns, & the news can be important. How to trade price action is important, but not why or who.

Besides, who is on first, why is on second, & how is in the outfield, as I recall.
The mind thinks, the heart knows...
  • #2,109
  • Edited 6:33am Nov 17, 2013 4:42am | Edited 6:33am
Quoting Dewey McG
....The big traders like to take these out, so price will often move towards these....{image}
You do not need to know why price moves to trade well. However, if you're curious, this is what the paper explains, and it's probably pretty close:

Hedge funds and CTA's with their large research and programming dept.'s are the "informed" prime movers in the forex markets. They are the first to know ahead of time when price will move to a new level due to a change in fundamentals.

They're the smart money, so their orders encourage their brokers to trade in the same direction, pushing price in their direction.. They both make money.

If price is pushed down & reaches a certain level, corporate traders come in to buy for cross-border purchases and payments. They are only interested in levels for their import/export businesses. They sell at higher levels, buy at the lower levels.

There are other major players, institutions, pension funds, their money managers, & central banks, but these players are not much interested in price fluctuations, just getting a deal done, and they are prayed upon by the aggressive players, hedge funds, CTA's, dealers and brokers. This adds additional movement to the price, as does central bank intervention.

Notice I did not mention much about retail traders, which are the least "informed" & least powerful group of traders, accounting for only about 8-10% of the market. The group most likely to take advantage of your stops is the one that will benefit the most - your broker! Hopefully, you can find a broker that you are not trading against!


If your stops are being run, there is only one other group, other than your broker, who is likely to be involved - other retail traders.

But once again, it's not necessary to know why price moves or who is moving it to trade well. Just HOW IT MOVES.
The mind thinks, the heart knows...
  • #2,110
  • Edited 6:20am Nov 17, 2013 4:59am | Edited 6:20am
Quoting Dewey McG
... The big traders like to take these out, so price will often move towards these.... {image}
Some traders seem to think that they're trading against the banks, and other large traders, instead of each other.

A nice thought but not very likely. You are probably almost always trading against other retail traders. And at 8-10% of the volume, you aren't going to hurt the big guys!

Does it matter who you are trading against? Or who is running your stops???? Why would it? It's more important to find out how to keep them from being hit!

All we need to know is how price moves, on average, not why it moves or who is moving it!

Even the pros do not know exactly why it moves, and are still caught of guard at times, with all their resources!

Besides, for us it's basically unknowable.

Know what is necessary, & what is unnecessary. Use the former, and forget the latter.
The mind thinks, the heart knows...
  • #2,111
  • Edited 6:11am Nov 17, 2013 5:12am | Edited 6:11am
Quoting Ever E. Man
{quote}... Why it moves is basically unknowable for us! Though it may be fun guessing! Fortunately, it's unnecessary for trading success. Know what is necessary, & what is unnecessary. Use the former, and forget the latter.
The majority of trades in currencies are executed by algorithms nowadays.

Paul Rotter, possibly the greatest trader of all time said in a 2010 interview, "...My guess is that 70% of the volume is generated by algorithmic trading systems, so you can be sure that there will be more ”Flash Crashes” or ”Flash Squeezes” in the future....I think it will be more and more a battle between machines, where the better ones try to destroy the smaller ones by learning from their behavior and trading against them...."

He also says some interesting things about retail forex: http://www.traderdaily.com/08/insight-from-the-flipper-catching-up-with-paul-rotter/

Good luck to all! May we all reach profitability in this lifetime!
The mind thinks, the heart knows...
  • #2,112
  • Edited 6:30am Nov 17, 2013 5:27am | Edited 6:30am
Quoting Ever E. Man
{quote} One exception might be news trading, but the big guys are going to have a bias, which they've discussed among themselves. They will know how far price is likely to go if such & such event occurs, or not. They will always be far ahead of retail traders, but it does not keep you & I from being profitable. It just makes it harder! And fortunately, because of their giant egos, and their own set of misconceptions, they are also somewhat human, and sometimes wrong! Good luck to all! May we all reach profitability in this lifetime!
Ever E. Man,

Good series of posts!

I like to call them "Elephants" throughout this forum - but "Steam Rollers" are ok too... ;-}
I'm also very much familiar with their behaviour - that's why my strategy, part of it presented here, is based on "Volume" or an attempt to figure it's direction.

Price movement is the RESULT - and the cause is VOLUME and its direction.
Since Forex doesn't doesn't have real "Volume" - The indies are trying to "guess" it and its direction.

Again, good series of posts!!

G.
  • #2,113
  • Nov 17, 2013 10:48am Nov 17, 2013 10:48am
Donated. Thanks for the link, G. I forwarded it to family members.

Quoting gg53
{quote}....I like to call them "Elephants" throughout this forum - but "Steam Rollers" are ok too... ;-} I'm also very much familiar with their behaviour - that's why my strategy, part of it presented here, is based on "Volume" or an attempt to figure it's direction. Price movement is the RESULT - and the cause is VOLUME and its direction. Since Forex doesn't doesn't have real "Volume" - The indies are trying to "guess" it and its direction.... G.
Thanks for your kind words, G.


It means a lot coming from you.

I would encourage all newbies to read Paul Rotter's answer to this question on the link above:
"TraderDaily:How helpful are $250 forex mini-accounts and products like the CFD (Certificates For Difference) to individuals who hope to parlay a small amount of capital into a fortune? Are these valuable tools or just the malt liquor of the financial world? "

I believe you can now find a broker that does not trade against you (all the time), however, probably not for such a small account. More like a $5K up.

I like the use of gadi on balance volume and will try find an equivalent for NinjaTrader.

Since you can handle complexity better than I can, have you checked out The Zorro Project? The equity curves for their trading systems that use different styles are interesting, the smoothest being a combination of trend following & counter trend. Very smooth with low draw downs.
http://manual.zorro-trader.com/zsystems.htm
I would imagine volume could be incorporated.
The mind thinks, the heart knows...
  • #2,114
  • Nov 18, 2013 5:27pm Nov 18, 2013 5:27pm
Quoting Ever E. Man
Donated. Thanks for the link, G. I forwarded it to family members. {quote} Thanks for your kind words, G. It means a lot coming from you. I would encourage all newbies to read Paul Rotter's answer to this question on the link above: "TraderDaily:How helpful are $250 forex mini-accounts and products like the CFD (Certificates For Difference) to individuals who hope to parlay a small amount of capital into a fortune? Are these valuable tools or just the malt liquor of the financial world? " I believe you can now find a broker that does not trade...
Ever E. Man,

Thanks for your vouch and even more thanks for your donation and promotion for the Philippines!

G.
  • #2,115
  • Nov 18, 2013 11:20pm Nov 18, 2013 11:20pm
Quoting gg53
{quote} Ever E. Man, Thanks for your vouch and even more thanks for your donation and promotion for the Philippines! G.
Frankly, my wife and I were happy to stretch our budget to donate, and it really helped to know that our donation was being matched! I appreciate the way you got the word out.

And thanks for the vouch, G. I think you're more deserving than I!

I also appreciate the gadi OBV indicator, with its predictive ability.

Many traders become mesmerized with indicators which they fail to realize are actually lagging.

Most are simply a different way of viewing price action, but with a slight lag.

A truly predictive indicator, even one that is a minute early, is rare.
The mind thinks, the heart knows...
  • #2,116
  • Nov 20, 2013 6:40am Nov 20, 2013 6:40am
Hi guys,

You were discussing exits about two pages ago and I have a suggestion. While you are testing various mm strategies, compare them to placing a horizontal line at each successive swing high or swing low on the OBV indy, and exit the trade when the horizontal line is broken. It seems to me to be an effective exit strategy.
Enter Signature
  • #2,117
  • Nov 20, 2013 8:19am Nov 20, 2013 8:19am
Quoting Sarythsaya
Hi guys, You were discussing exits about two pages ago and I have a suggestion. While you are testing various mm strategies, compare them to placing a horizontal line at each successive swing high or swing low on the OBV indy, and exit the trade when the horizontal line is broken. It seems to me to be an effective exit strategy.
Sarythsaya,

...and where have you been all this time? ;-}
We missed you!

G.
  • #2,118
  • Edited 9:02am Nov 20, 2013 8:46am | Edited 9:02am
Quoting Sarythsaya
Hi guys, You were discussing exits about two pages ago and I have a suggestion. While you are testing various mm strategies, compare them to placing a horizontal line at each successive swing high or swing low on the OBV indy, and exit the trade when the horizontal line is broken. It seems to me to be an effective exit strategy.

I have come to the same idea this week. Maybe when the price has a high momentum, you can switch to a lower timeframe for trailing with the OBV swings (from M15 to M5).
  • #2,119
  • Nov 20, 2013 9:12am Nov 20, 2013 9:12am
Quoting chjungen
{quote} I have come to the same idea this week. Maybe when the price has a high momentum, you can switch to a lower timeframe for trailing with the OBV swings (from M15 to M5).
chjungen,

I think it will help others to understand yours/Sarythsaya ideas if you post a few sample charts.
Thanks!

G.
  • #2,120
  • Nov 20, 2013 3:13pm Nov 20, 2013 3:13pm
I'm attaching a screenshot that hopefully illustrates clearly how to trail a trade with OBV:
Attached Image
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