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why have you accepted the price-predictability assumption?

  • #561
  • Dec 29, 2013 1:51am Dec 29, 2013 1:51am
Quoting Chicky
{quote} I once tried to make $500 a month starting with $5,000. The pressure was way too much than one could handle. I reduced this to $60 a month with $200, even that was very stressful. Then someone turned on the light of the dark room I was sitting in. I now don't expect a regular return, just keep on taking small risk, small reward trades whenever possible. Like Soros (or whoever) said 'walking over 10 of 1 ft. bars than trying to jump over one 10ft bar.'
Felt the same struggle and blew my first couple accounts with the same logic.

Started trading for beer money, and learned how to appreciate taking smaller bites of the apple.

I used to take 50-500 pip trades, typically in the 80-90 Range...I was an absolute fucking SLAVE to MARKET!

Found out I can make more by taking a few more trades with a lot less profit and walk away whenever I want. Increased my beer money risk and never looked back.

Trading OPM, that was another adjustment. Took me a while to get past that hurdle, but like everything else...small steps. One foot in front of the other.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #562
  • Dec 29, 2013 1:55am Dec 29, 2013 1:55am
Quoting Proximus
{quote} Who said i cannot write an EA.Besides i`m not interested in 1 pippers, ruled those out of my book about a year ago.Most of them cant even stand on my high quality historical data, let alone stand a chance in a demo or even a real account. They could only and only work if spread = 0 and slippage is the most minimum = you have to be the bank not the trader I dont know i would still take the 130k % increase anyway if i could , but i only need 1 months like that, i dont care if i never make a dime after that again, just gimme 1 month that...
I was kidding. Inserted that tongue out smily against my normal practice only out of respect for you.

Me too don't believe in 1 pipper, or even 10 pippers or even 30 pippers. My sl is never less than 40 pips (in live trading). In fact, my rules say it should not be less than 45 pips. I am not consistent with my tps. My rules say 100 pips, no more, no less. But I don't follow this rule. Any profit above 45 pips is acceptable. The only reason for that many pip sl is, like you mentioned, the cost of spread. I try to minimize its ratio as much as possible but not to the extent where it hurts my trade frequency. Balancing these two things to me is the next most critical thing after finding an edge.

You will never get a month for 130,000%, no body ever will. Many died trying. Its not there.
The Thief of Wall Street
  • #563
  • Dec 29, 2013 1:59am Dec 29, 2013 1:59am
Quoting Magix
{quote} Felt the same struggle and blew my first couple accounts with the same logic. Started trading for beer money, and learned how to appreciate taking smaller bites of the apple. I used to take 50-500 pip trades, typically in the 80-90 Range...I was an absolute fucking SLAVE to MARKET! Found out I can make more by taking a few more trades with a lot less profit and walk away whenever I want. Increased my beer money risk and never looked back. Trading OPM, that was another adjustment. Took me a while to get past that hurdle, but like everything...
I never considered OPM. What are essentials? I mean what are the do's and don'ts for OPM? I may think about it in the next year.
The Thief of Wall Street
  • #564
  • Dec 29, 2013 2:00am Dec 29, 2013 2:00am
Quoting Magix
{quote} I understand what you are saying... But why would an NN be any different. It still has to look at the most recent data in order to adapt to the ranges...ie, it is still working on historical data. Yes, these ranges can change from day to week to month to year...appreciated, and I have even commented on the same thing for adaptation of these ranges. Take an average day that trades a little out of bounds and it skews the rest. Additionally, taking Sunday Data into a daily consideration for a 5 day trading week throws the entire week out...(yes...
What else can you work with if not historical data.There are the news, but thats complicated to code in the NN, so NN is mostly for technical/quantivative analysis.

And doesnt necessarly have to be a NN there are many self learning/adapting algoritms which are much simpler than a NN.Ask PipMeUp about this he is expert in quantitative analysis.

But the main purpose of it would be not to fine tune the algo to the market, but rather to read the market like a book, and as the new info rolls in you correct past assumptions.For example if the initial condition is set that the X pattern is tradeable, and if it shows out that it isnt, then the system should evaluate itself, and correct that, rather than you have to fine tune the entire stuff again.This way it becomes truly dynamic, self learning, and its more than an algorithm now, its an artificial intelligence

The main problem with moving averages is that they dont work

They follow the price but not adapt to it and neither predict it.These are 3 different terms need to be distinguished from one another.The MA shows a down movement but so the price? What useful information did i got out of this? Its a downtrend so what, it can reverse at any given time.Although if its a good downtrend it is a sign of bias, i agree there, but a bias is a bias, where is my good entry point? Just relying on this minuscule bias wont really give me more than tops 1-2% edge which is hardly ever enough.

From a quantitative perspective i would still need a mechanism which predicts atleast 1 portion of the price with a reasonable edge lets say 5-10%.And if there is other bias besides that, the better.So the entry point is crucial, that is why the pattern which i mentioned is at the moment worth a crap until the entry point can be well defined.All patterns without the entry point defined have no worth, once you get the entry point discovered, then you have a profitable system there.
"There's a sucker born every minute" - P.T. Barnum
  • #565
  • Dec 29, 2013 2:05am Dec 29, 2013 2:05am
Quoting Chicky
{quote} I never considered OPM. What are essentials? I what are the do's and don'ts for OPM? I may think about it in the next year.
Like Milam said. Show some consistency, people will line up to feed you cash to trade for them.

I think I've taken 3 accounts from FF alone and have sent others to brokers due to account size.

Trading for others, it might seem like a good gig...bottom line, if you have consistency, you will be a lot happier trading for yourself. I am.

Dealing with people isn't fun, especially when you have their money on the line. If you think people have unrealistic expectations when they trade...take on their accounts and see what they want. They give you $10k and want to retire next month...never have to work again. A constant monkey riding your back for a portion of the profit...pshhhhhhhhhhhhhhhhhhh...

Fuck THAT!

There are PAMM accounts that will allow you a little more freedom, but the gains on these with the restrictions that come along, too can be a lot more headache than worth.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #566
  • Dec 29, 2013 2:09am Dec 29, 2013 2:09am
Quoting Magix
{quote} I was granted my first live Managed Account based on a 1 week trial with 1.8% net gains. Was a $10k account and I was ashamed of the gains...I was given 60,000 Euro to trade the following week. You are correct with your statement on the expectation of others. How many think they can start with $1000 and make a living? Sure it can be done, but consistently and for how long? The pressure behind this is more than the typical person can handle.
Absolutely….if one has not enough capital, he/ needs to focus on producing clear, neat books…there is always a way to do things….Beside, after a few years he can start to trade his own money……..This is a proper job, if one does not consider it as one, he will succumb, it is just a matter of time…..

I am not saying a person cannot produce 200% per year, but one step at the time, as in any kind of business…. Trading is a business………when I get excited or upset about a trade, I know there is something wrong in how I conduct my business….
Wherever you go, there you are.
  • #567
  • Dec 29, 2013 2:12am Dec 29, 2013 2:12am
Quoting Magix
{quote} Like Milam said. Show some consistency, people will line up to feed you cash to trade for them. I think I've taken 3 accounts from FF alone and have sent others to brokers due to account size. Trading for others, it might seem like a good gig...bottom line, if you have consistency, you will be a lot happier trading for yourself. I am. Dealing with people isn't fun, especially when you have their money on the line. If you think people have unrealistic expectations when they trade...take on their accounts and see what they want. They give...
Thanks. I find a lot of food for thought in your this post.
The Thief of Wall Street
  • #568
  • Dec 29, 2013 2:12am Dec 29, 2013 2:12am
Quoting Proximus
The main problem with moving averages is that they dont work
This logic is what is holding you back. You aren't sure how to interpret the data so you have no idea how to use the tools provided.

I still use Moving Averages and a couple of confirmation indicators in manual trading. Looking at and analyzing the overall long charts, the fast charts through use of simple indicators are a breeze.

You have to trade to understand markets, and everything that I have read in your posts suggest that you don't, or that you don't do it well.

Take this information however you want...but typically, traders do not make good coders and coders do not make good traders. I believe you to be the latter and until you understand markets outside of a book study, you will continue to struggle.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #569
  • Dec 29, 2013 2:17am Dec 29, 2013 2:17am
Quoting milam
{quote} Absolutely….if one has not enough capital, he/ needs to focus on producing clear, neat books…there is always a way to do things….Beside, after a few years he can start to trade his own money……..This is a proper job, if one does not consider it as one, he will succumb, it is just a matter of time….. I am not saying a person cannot produce 200% per year, but one step at the time, as in any kind of business…. Trading is a business………when I get excited or upset about a trade, I know there is something wrong in how I conduct my business…....
You may not know this about me, but I have a tendency to be a little temperamental...
lol

It's been over a year since I have thrown my keyboard through a window..but there have been other casualties...

Shit happens...Market has a way of making you realize that once you lose respect, you are ready for another lesson.

I try to maintain my respect...it is cheaper on replacing household items and typically allows a lot more profit.


But, yup...It's a job.

Easy work for no paycheck, hard work for a living.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #570
  • Dec 29, 2013 2:20am Dec 29, 2013 2:20am
Quoting milam
{quote} Absolutely….if one has not enough capital, he/ needs to focus on producing clear, neat books…there is always a way to do things….Beside, after a few years he can start to trade his own money……..This is a proper job, if one does not consider it as one, he will succumb, it is just a matter of time….. I am not saying a person cannot produce 200% per year, but one step at the time, as in any kind of business…. Trading is a business………when I get excited or upset about a trade, I know there is something wrong in...
Always remember Chicky's Gamling Rule #2. If I were you, would focus on "I am saying a person should not lose more than 5% per year". Focusing more on risk than reward to me is most important element in this business. Just think, if you find a person willing to let you trade for him or her with an open profit expectation but a maximum loss of 5% in a year. The whole trading approach will be different.
The Thief of Wall Street
  • #571
  • Dec 29, 2013 2:22am Dec 29, 2013 2:22am
Quoting Magix
{quote} This logic is what is holding you back. You aren't sure how to interpret the data so you have no idea how to use the tools provided. I still use Moving Averages and a couple of confirmation indicators in manual trading. Looking at and analyzing the overall long charts, the fast charts through use of simple indicators are a breeze. You have to trade to understand markets, and everything that I have read in your posts suggest that you don't, or that you don't do it well. Take this information however you want...but typically, traders do not...
Maybe you are right, but its not I who is having problems interpreting the indicators, its my EA.I coded it pretty well to distinguish a good setup from a bad setup yet if i added an indicator to the equation it always showed bad results.So as my previous EAs which were based only on indicators.Heck, most of them were a waste of time to even try, while others showed good results, on a small sample, and tested on a 20 year period, they all showed a 0 expectancy or worse (with pretty much 50-50 chances) without spread so i knew this was a typical no edge one , as i told counted the spread in, the best one was still the bollinger with -0.2 expectancy because this one atleast admits to the user that it only trades random entry data as the ranging being highly random.

Besides i`m doing pretty well , maybe it was a mistake to completely rule out indicators, maybe not, but i`m doing well i didnt regret it.I can trade very well without them proves that its not even necessary to use them.

I still use an algoritm to trade the markets as i`m an EA trader but its very far from being coded like an indicator it uses completely different logic and algoritms.
"There's a sucker born every minute" - P.T. Barnum
  • #572
  • Dec 29, 2013 2:23am Dec 29, 2013 2:23am
Quoting Magix
{quote} As a fella who likes to read, I know you have been through the run of mill threads and posts on the use of indicators. From here, you have most inevitably run into several trade systems and ideas on profitable trading strategies.... And Maybe have even worked some code on these... The issue with them and as you will see stated in every thread, is that indicators lag. This is bullshit, but may boil down to semantics for some, where others do not understand the concept of smoothing. I have spent years in market working with and forward manually...
This post is the post of the thread, so far!

Work out this stuff, and trading success is quite near!
If you are good at something, never do it for free--Joker
  • #573
  • Dec 29, 2013 2:32am Dec 29, 2013 2:32am
Quoting Magix
{quote} Felt the same struggle and blew my first couple accounts with the same logic. Started trading for beer money, and learned how to appreciate taking smaller bites of the apple. I used to take 50-500 pip trades, typically in the 80-90 Range...I was an absolute fucking SLAVE to MARKET! Found out I can make more by taking a few more trades with a lot less profit and walk away whenever I want. Increased my beer money risk and never looked back. Trading OPM, that was another adjustment. Took me a while to get past that hurdle, but like everything...
If you are good at something, never do it for free--Joker
  • #574
  • Dec 29, 2013 2:35am Dec 29, 2013 2:35am
redlion in the house!

The price predictability axiom is rejected, in my view, but that does not mean that methods to harness the randomness cannot be effectively designed.
If you are good at something, never do it for free--Joker
  • #575
  • Dec 29, 2013 2:37am Dec 29, 2013 2:37am
Quoting jmn5611
redlion in the house! The price predictability axiom is rejected, in my view, but that does not mean that methods to harness the randomness cannot be effectively designed.
It will be highly appreciated if you could kindly translate your second sentence in English Language.
The Thief of Wall Street
  • #576
  • Dec 29, 2013 2:39am Dec 29, 2013 2:39am
Quoting Proximus
{quote} Maybe you are right, but its not I who is having problems interpreting the indicators, its my EA.I coded it pretty well to distinguish a good setup from a bad setup yet if i added an indicator to the equation it always showed bad results.So as my previous EAs which were based only on indicators.Heck, most of them were a waste of time to even try, while others showed good results, on a small sample, and tested on a 20 year period, they all showed a 0 expectancy or worse (with pretty much 50-50 chances) without spread so i knew this was a...
Don't use period [0].

Wait for closed candle[1], and quit running back tests.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #577
  • Dec 29, 2013 2:43am Dec 29, 2013 2:43am
Quoting Chicky
{quote} It will be highly appreciated if you could kindly translate your second sentence in English Language.
You are funny Chicky. Markets cannot be predicted, in my limited and humble view. But, price can be followed, based on past performance. If you can follow price at a distance, based on past performance, what price does in the short term is not relevant. Is that clear?
If you are good at something, never do it for free--Joker
  • #578
  • Dec 29, 2013 3:09am Dec 29, 2013 3:09am
Quoting jmn5611
{quote} You are funny Chicky. Markets cannot be predicted, in my limited and humble view. But, price can be followed, based on past performance. If you can follow price at a distance, based on past performance, what price does in the short term is not relevant. Is that clear?
If this was the case that price at T_0 can affect future price then it would be said that price is Auto correlated .....yet it is not. This implies that future returns are not contingent upon past returns. Yet Price itself follows some rules as far as deviations of returns, or range....what I mean by this is that you do not have 1.3023 euro today and 5.20 tomorrow, followed by 700 the day after, the volatility is somewhat predictable of course with the occational outliers......Price is not normally distributed as has been shown in previous posts.

Proximus rightly states that most indicators are derivatives of moving averages, and even the indicators that measure momentum by either calculating the rate of change of either price or derivatives of price only tell you what was and not what will be. I do agree with Magix that looking at these indicators can be useful as a tool to smooth the data, given the problem that proximus has stated.

Yet from Price T_0 we take a guess enter a trade and go in for the ride in this random-like chaotic market.........the only thing we can control is our risk exposure. As I sit here brain storming......I feel grateful that we are having some meaningful debates.
AVT INVENIAM VIAM AVT FACIAM
  • #579
  • Dec 29, 2013 3:25am Dec 29, 2013 3:25am
Quoting the redlion
{quote} If this was the case that price at T_0 can affect future price then it would be said that price is Auto correlated .....yet it is not. This implies that future returns are not contingent upon past returns. Yet Price itself follows some rules as far as deviations of returns, or range....what I mean by this is that you do not have 1.3023 euro today and 5.20 tomorrow, followed by 700 the day after, the volatility is somewhat predictable of course with the occational outliers......Price is not normally distributed as has been shown in previous...
No, price is not auto correlated, you are correct. What I do is I take moving averages and place trades based on where price is when I put my orders in. I look at past data to form a bias. Is it gonna go up or down, I dunno. Don't care all that much either. I take the view that I will follow price up until it stop going up, and vice versa. If it starts to range, then I will sell tops and buy bottoms. What I call a top or bottom is completely arbitrary.

I think traders can take whatever framework that they want in a market and be successful, as long as they are consistent, and trade a position size that makes sense relative to their account.
If you are good at something, never do it for free--Joker
  • #580
  • Dec 29, 2013 3:32am Dec 29, 2013 3:32am
Quoting Magix
{quote} You may not know this about me, but I have a tendency to be a little temperamental... lol It's been over a year since I have thrown my keyboard through a window..but there have been other casualties... Shit happens...Market has a way of making you realize that once you lose respect, you are ready for another lesson. I try to maintain my respect...it is cheaper on replacing household items and typically allows a lot more profit. But, yup...It's a job. Easy work for no paycheck, hard work for a living.
We are all different, a bit of colour also is healthy, especially if one means good……..I can read people by looking into their eyes, with forums, it takes a bit long for me, words also have a meaning, but a bit more difficult to "read".

I am also am emotional person and I am very proud being it, it brings also a lot of flavour and creativity, but in trading I have learnt to monitor my emotions, their are not good as when I create, make love or other…... The only time I use creation or emotion in trading is when a develop a method, once is completed I take the emotion out of it, I cannot take second guessing especially when the volume increases, my personality needs to take trade when the method dictates, if I do not, my fear, patience and greed will intertwine with each other, just to find myself into a deep hole. When my trade is systematic and I lose I am able to turn that into a positive perspective as been part of the expenses, if I do not, I will let my emotion back into business, is we can call it that way…..
Wherever you go, there you are.
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