How can you determine if price breaks range that it has any deterministic property .it remains random chance.its been well documented here regarding tails.but if you can see the volatility across market and measure this against a the tipping point you are no longer trading randon chance
why have you accepted the price-predictability assumption?
- #962
- Jan 5, 2014 3:09pm Jan 5, 2014 3:09pm
- | Membership Revoked | Joined Aug 2006 | 11,977 Posts
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
- #963
- Jan 5, 2014 5:18pm Jan 5, 2014 5:18pm
- Joined Dec 2006 | Status: Backtest is meaningless (to me) | 2,176 Posts
- #966
- Jan 5, 2014 6:26pm Jan 5, 2014 6:26pm
- | Membership Revoked | Joined Aug 2006 | 11,977 Posts
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
- #967
- Edited Jan 6, 2014 12:32am Jan 5, 2014 11:25pm | Edited Jan 6, 2014 12:32am
- Joined Oct 2013 | Status: Forex Shaman | 1,468 Posts
{quote} What is the probability that a A++ super elite guru trader can turn $1000 into a million in a year? He has ~240 sessions to play for this year. Each and every single day is (must be) a 2% winner. If the probability is P for each day, the probability of reaching the goal is P^240. Because he is a A++ super elite guru trader we can imagine his success rate is 99%. 0.99^240=0.089. He will reach his goal once every 11 years in average. Well... he can do it. Can I do it if my success rate is 70%? 0.70^240 ~ 6e-38. No. Can I do it if my success...
The quality meaning the winrate and the RR ratio parameters and the quantity meaning how many trades we trade in lets say a week.So these are the 3 parameters that should be the most important for any trader.
1 trade with a huge risk = 100 smaller trades with less risk, and by default because we dont like big risks so we will increase the quantity of trades, since the quality cant be improved after a certain level.
Consider ~60% winrate the absolutely maximum that the world's best grandmaster trader can achieve.Anyone that has higher winrate than this either lies or he doesn't win consistently.
So if we think about it, with 60% you cant reach 1 million in a year just by trading 1 trade/day, but trading 50 or 100/ day might make the case.
Of course the point of that post was not this, so you dont have to take it seriously, the point was that, more small trades is better than less big trades, and that is reasonable, because each trade is limited to a minor risk, and its more comfortable not to worry about huge position sizes.
{quote} sorry,, you have less idea than the previous post. This room is for prediction analogy. I can predict that the last 2 posts the traders will go hungry. Once you start to trade with large amounts your whole perspective will change. I do not mean trading example £20 £50 £100 try sticking £30k + on a trade, its a different ball game. anyway any more ideas regarding prediction.
And in the second post i was in favor of more small trades vs few big trades, so i dont know what is your problem with that.No retail trader can manage 30k $ position sizes by himself here on FF, correct me if i`m wrong.
"There's a sucker born every minute" - P.T. Barnum
- #968
- Jan 5, 2014 11:51pm Jan 5, 2014 11:51pm
- Joined Oct 2013 | Status: Forex Shaman | 1,468 Posts
Personally I just forget about it.
Anyway its time to get back to topic, can you please be kind PipMeUp and respond to my previous theories, at post 909 and post 911
Post 909
http://www.forexfactory.com/showthre...71#post7189171
Post 911
http://www.forexfactory.com/showthre...08#post7189408
I made a few points there about how the market could be built up either randomly or random-like to deceive traders of its true nature.I`m curious what do you think about my points there
?
"There's a sucker born every minute" - P.T. Barnum
- #969
- Jan 6, 2014 12:38am Jan 6, 2014 12:38am
- Joined Feb 2009 | Status: Trader | 25,867 Posts
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
- #970
- Jan 6, 2014 12:42am Jan 6, 2014 12:42am
- Joined Feb 2009 | Status: Trader | 25,867 Posts
Proximus,
I made a few points there about how the market could be built up either randomly or random-like to deceive traders of its true nature.I`m curious what do you think about my points there ?
i agree.I was a firm believer in that, that is what makes it random at times.
I made a few points there about how the market could be built up either randomly or random-like to deceive traders of its true nature.I`m curious what do you think about my points there
?i agree.I was a firm believer in that, that is what makes it random at times.
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
- #971
- Jan 6, 2014 2:28am Jan 6, 2014 2:28am
- Joined Aug 2011 | Status: Trader | 1,327 Posts
You forgot 1 important parameter, because there is the quality of trades and there is the quantity of trades.You only considered the quality of trades.You can do this by trading 1 high quality trade /day or by trading 100 less quality trades / day. If the average expectancy of those 100 trades is positive, then who cares.
Until I have more knowledge the idea is indeed to trade this setup as if it was always a "lesser quality trade". Instead of risking 5% on 1 trade you can open up to 50 trades risking 0.1%. The risk is the same. The result is expected smoother since the market won't kill all of them often. The first issue with this is that the winrate is small. That's because you'll certainly trade both RORO directions. If not you're biaised. Good if you win but not if you lose (fundamentals say up and market goes down)... One side will always lose. The other side MAY win (stopped out before the move). So the R:R shall be >>1. Which brings another issue: the time in the fractal market. Winning 60 pips takes more than 3 times longer than losing 20 pips. This creates an overtrading situation where the losers accumulate faster than the winners cover the losses. Even if the expectancy is positive! As if you spend all of your money to buy trees. You die of starvation before the fruits are ripe.
The only way I found against this is to break the trading into phases. The first one is the seeding. During this phase you open a big group of trades over a few days (to avoid correlation). Then a growing phase where you wait the market to start doing its thing of killing the bad trades and also stopping out some of the good ones. After you farm the rest by slowly trailing the SL. When the SLs are such that if they were all hit right now the account will be increased (better than covering the losses) you can seed again.
Dream big
No greed. No fear. Just maths.
- #972
- Jan 6, 2014 5:23am Jan 6, 2014 5:23am
- Joined Oct 2013 | Status: Forex Shaman | 1,468 Posts
Ok this will be a long debate/post (everyone will attack me because of my strange ideas but oh well 
), thanks for responding, i will tell you my views then.
If this is the only question that is important then my answer is : Yes, you can increase the knowledge of the setup by being selective and only trade setups which do contain information about the future price instead to trade the random noise.I will detail it soon.
S/R line trading is more to breakout traders, or grid-type traders, just detect the point where all sticks converge to known as S/R lines, and then guess when the volatility is high enough that a breakout will happen, then put an OCO type order in both directions to hedge the risk, and then pray that your breakout will be big enough to trigger atleast 1 order and win it.
I would only check the S/R zones if i trade a breakout, otherwise its just really misguiding, and the S/R zone itself doesnt carry information about the price direction, only about the volatility increase decrease, nothing more.So it does contain more information than a normal candle in the nowhere, but not good for trend-following type trades, or alteast i would not trade like this a trend based system.
MA is good, i use them too.But they are not the holy grail, altough they are actually giving an edge if used propertly
TL are basicaly like moving average but they are too rough and not as smooth and adaptive, so i dont like them and believe that its not really a good tool and carry not much information about the direction, and probably worse than S/R zones
They are good, by being selective and select the best entry they do carry information about the future price:
That little hanging-man stick carried more information about the future price than every other candle in the chart combined.Patterns are very powerful, they carry much information about the future price, and i belive only patterns can predict the next price, between patterns there are just random noises.
So the job is not to predict the price in every single moment, thats impossible, but only find repeating pattenrs, and those patterns will predict the price for you, just follow their characteristics and trade them.Noise cant be predicted, but repeating patterns carry much information about the future price.
That hanging man had about a 5% edge over the coin flip scenario ,a 55% chance of uptrend following according to my observations.
Nah, thats just like astrology bullshit. Mathematicians demonstrated that it doesnt even work in the real world, so supposedly it wont work in the market too, its just an illusion.Read more about it here. Scroll down to the bottom of the page where it says about "Disputed observations" , it clearly explains that the fibo numbers are just an urban legend.
(i know that i will get flamed because i said this but whatever
)
The risk might be the same but it keeps you longer in the game, if you'd risk 10% of account then if you get 10 losses in a row you are done.By risking 1% of account like i do, only 100 losses in a row would kick me out, but thats nearly impossible, even if i wanted i could not trade that bad
.Because if i could trade that bad, its just a matter of perspective, lets say i am so bad that i can lose 100 trades in a row, then its simple, i just switch directions of the trades and there you go, a Holy Grail ,100 wins in a row what better could any trader wish for.
All my trades have bigger rewards than risk, yes the winrate is below 50% but if its biased then the expectancy will always be bigger than 0 by far.
I trade with my EA, it trades by an algoritm, so i dont worry about trading psychology and stress, all my trades are sniper-precise and 100% objective, in this case there exists no overtrading, because all trades are the same, it doesnt matter how many i trade if all of them are based on the same criteria, if 1 can bring a profit (in average) then all of them can, no parameters are changed.
Not even the market change can disturb it ,because those patterns are there for over 100 years, its highly unlikely that they will stop working from 1 day to another.
The only thing that can f**k me is the spread fluctuation, that is why i was worried about that and had a big debate about it a few pages ago.
This is interesting, can you explain it better i`m not sure i understood it well.I`m not sure why you open positions when the market is 50-50 random, this is why i only stick to patterns, and i only trade edged situations, there is just no point in opening trades when the market is 50-50.
), thanks for responding, i will tell you my views then.{quote} How can you determine that the setup you're seeing right now is a "high quality trade"? I've posted examples which show that the market is extremely close to a coin flipping game. Can you increase the knowlegde about this setup to bet more? This is the question.
But does the pinbar form the support or it is because of the support that the pinbar forms? If I see a pinbar on a support does it really give me more information than the support or the pinbar alone?
S/R line trading is more to breakout traders, or grid-type traders, just detect the point where all sticks converge to known as S/R lines, and then guess when the volatility is high enough that a breakout will happen, then put an OCO type order in both directions to hedge the risk, and then pray that your breakout will be big enough to trigger atleast 1 order and win it.
I would only check the S/R zones if i trade a breakout, otherwise its just really misguiding, and the S/R zone itself doesnt carry information about the price direction, only about the volatility increase decrease, nothing more.So it does contain more information than a normal candle in the nowhere, but not good for trend-following type trades, or alteast i would not trade like this a trend based system.
What about a MA,
MA is good, i use them too.But they are not the holy grail, altough they are actually giving an edge if used propertly
a trend line
TL are basicaly like moving average but they are too rough and not as smooth and adaptive, so i dont like them and believe that its not really a good tool and carry not much information about the direction, and probably worse than S/R zones
chartist pattern
They are good, by being selective and select the best entry they do carry information about the future price:
That little hanging-man stick carried more information about the future price than every other candle in the chart combined.Patterns are very powerful, they carry much information about the future price, and i belive only patterns can predict the next price, between patterns there are just random noises.
So the job is not to predict the price in every single moment, thats impossible, but only find repeating pattenrs, and those patterns will predict the price for you, just follow their characteristics and trade them.Noise cant be predicted, but repeating patterns carry much information about the future price.
That hanging man had about a 5% edge over the coin flip scenario ,a 55% chance of uptrend following according to my observations.
a fibo level
Nah, thats just like astrology bullshit. Mathematicians demonstrated that it doesnt even work in the real world, so supposedly it wont work in the market too, its just an illusion.Read more about it here. Scroll down to the bottom of the page where it says about "Disputed observations" , it clearly explains that the fibo numbers are just an urban legend.
(i know that i will get flamed because i said this but whatever
)Until I have more knowledge the idea is indeed to trade this setup as if it was always a "lesser quality trade". Instead of risking 5% on 1 trade you can open up to 50 trades risking 0.1%. The risk is the same. The result is expected smoother since the market won't kill all of them often.
The risk might be the same but it keeps you longer in the game, if you'd risk 10% of account then if you get 10 losses in a row you are done.By risking 1% of account like i do, only 100 losses in a row would kick me out, but thats nearly impossible, even if i wanted i could not trade that bad
.Because if i could trade that bad, its just a matter of perspective, lets say i am so bad that i can lose 100 trades in a row, then its simple, i just switch directions of the trades and there you go, a Holy Grail ,100 wins in a row what better could any trader wish for.The first issue with this is that the winrate is small. That's because you'll certainly trade both RORO directions. If not you're biaised. Good if you win but not if you lose (fundamentals say up and market goes down)... One side will always lose. The other side MAY win (stopped out before the move). So the R:R shall be >>1. Which brings another issue: the time in the fractal market.
All my trades have bigger rewards than risk, yes the winrate is below 50% but if its biased then the expectancy will always be bigger than 0 by far.
This creates an overtrading situation where the losers accumulate faster than the winners cover the losses. Even if the expectancy is positive! As if you spend all of your money to buy trees. You die of starvation before the fruits are ripe.
I trade with my EA, it trades by an algoritm, so i dont worry about trading psychology and stress, all my trades are sniper-precise and 100% objective, in this case there exists no overtrading, because all trades are the same, it doesnt matter how many i trade if all of them are based on the same criteria, if 1 can bring a profit (in average) then all of them can, no parameters are changed.
Not even the market change can disturb it ,because those patterns are there for over 100 years, its highly unlikely that they will stop working from 1 day to another.
The only thing that can f**k me is the spread fluctuation, that is why i was worried about that and had a big debate about it a few pages ago.
The only way I found against this is to break the trading into phases. The first one is the seeding. During this phase you open a big group of trades over a few days (to avoid correlation). Then a growing phase where you wait the market to start doing its thing of killing the bad trades and also stopping out some of the good ones. After you farm the rest by slowly trailing the SL. When the SLs are such that if they were all hit right now the account will be increased (better than covering the losses) you can seed again.
This is interesting, can you explain it better i`m not sure i understood it well.I`m not sure why you open positions when the market is 50-50 random, this is why i only stick to patterns, and i only trade edged situations, there is just no point in opening trades when the market is 50-50.
"There's a sucker born every minute" - P.T. Barnum
- #973
- Jan 6, 2014 5:50am Jan 6, 2014 5:50am
- | Membership Revoked | Joined Aug 2006 | 11,977 Posts
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
- #974
- Jan 6, 2014 5:53am Jan 6, 2014 5:53am
- Joined Feb 2009 | Status: Trader | 25,867 Posts
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
- #975
- Jan 6, 2014 6:00am Jan 6, 2014 6:00am
- Joined Feb 2009 | Status: Trader | 25,867 Posts
Proximus, You are a sincere about your trading and you must stick to your plan but 
you are wrong about that hanging man in your chart. It is agreed it has a long wick against the trend so should move up, but look at all those inside bars I pointed out, these are the daddy. Go onto the daily and see that candle from the day before (ok different chart) later on in your chart it seems to have a couple of inverted hanging men lol what ever you call them AND nothing happened.
Just saying, look at the whole picture for clues, regards billy
you are wrong about that hanging man in your chart. It is agreed it has a long wick against the trend so should move up, but look at all those inside bars I pointed out, these are the daddy. Go onto the daily and see that candle from the day before (ok different chart) later on in your chart it seems to have a couple of inverted hanging men lol what ever you call them AND nothing happened.
Just saying, look at the whole picture for clues, regards billy
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
- #976
- Jan 6, 2014 6:01am Jan 6, 2014 6:01am
- Joined Oct 2012 | Status: Trade Small, Win Big | 4,988 Posts
If you are good at something, never do it for free--Joker
- #977
- Jan 6, 2014 6:03am Jan 6, 2014 6:03am
- Joined Oct 2012 | Status: Trade Small, Win Big | 4,988 Posts
If you are good at something, never do it for free--Joker
- #978
- Jan 6, 2014 6:04am Jan 6, 2014 6:04am
- Joined Oct 2013 | Status: Forex Shaman | 1,468 Posts
Proximus, H4 traders, 60% is likely high doubt many get above 55%, M1 80% is possible. Yes if you trade at a really small level then you won't lose as much, but your forgetting you also won't make as much, are you here to make loads or lose a little ? guess that's up for you to decide.
If i can insure myself to stay in the game indefinitely by using only 1% account size, then i secured my presence permanently in the market.So objective 1 is completed.
Only now i can move to objective 2 to make profit, so i will trade small positions, so what, even if i would make an average 0.01% account increase / day, if its consistent i reach the million € faster than a guy who has an unreliable strategy + never heard of money management and account capital protection tehniques.
Ever heard of the story of Achilles and the Turtle.The slow turtle beated in speed the mighty warrior, because a reliable small step ahead is much better than an unreliable huge leap.Consistent income above all.
Any proof ?? cause I really don't believe you!! sorry!
Ok since I already spoken about the hanging man, i will share my statistics and research on it.But let me find it its on my other PC.
"There's a sucker born every minute" - P.T. Barnum
- #979
- Jan 6, 2014 6:06am Jan 6, 2014 6:06am
- Joined Oct 2012 | Status: Trade Small, Win Big | 4,988 Posts
If you are good at something, never do it for free--Joker
- #980
- Jan 6, 2014 6:06am Jan 6, 2014 6:06am
- Joined Feb 2009 | Status: Trader | 25,867 Posts
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.