why have you accepted the price-predictability assumption? | Page 97 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

So I accepted a Prop Trading job in South Beach Miami 44 replies

Why you shouldn't show how much you have made in FX 35 replies

Incorporating Slippage Assumption in backtesting 4 replies

Market Predictability - Technical Signals 25 replies

Contesting the Accepted View of Bernanke 0 replies

Attachments: why have you accepted the price-predictability assumption?
Exit Attachments

why have you accepted the price-predictability assumption?

  • #1,921
  • Jan 18, 2014 9:19am Jan 18, 2014 9:19am
Quoting Turveyd
{quote} For reasons posted above, i shall NOT be posting a TE. It is not the purpose of this thread, my method is in my journal feel free to test it yourself. I will not bother to click view post again, don't bother typing to me again.
No one was posting to you before, but you felt free to interject until you were asked to support your statements.
If you are good at something, never do it for free--Joker
  • #1,922
  • Jan 18, 2014 11:07am Jan 18, 2014 11:07am
Quoting Proximus
{quote} This is how a fking NO-STOPLOSS system's balance curve looks like, are you proud of it? Don't have to, because you will see your account balance resemble this picture very soon aswell... {image} So your system is no better than this, a margin call can wipe 100% of your profits and 80% of your starting capital aswell, is it wise to not use SL? You will get margin called sooner of later, its not a question of if?, its a question of when?, then you can experience it on your own money, good luck with it!


With each passing attempt at logic, you are failing more and adding to the ignorance in your traders toolbox instead of valid and relevant information.

This is a shame.

Being defensive isn't allowing you to actually learn anything, but instead, just emotionally respond.

You Don't Need a Stop Loss, if you know how to trade.

I can't stop saying this enough.

If you need one, you haven't a fucking clue as to what is going to happen. If you understand market, supply and demand, this isn't necessary.

Thus my justification behind and have provided examples of, Market to a certain extent is Predictable, and understood properly, reduces the risk of loss as well as allows you work without STOPS!

You continue to read that I will hold trades open in a loss position forever.
You should read that I do close trades in loss...Just don't need a STOP FUCKING LOSS to do this.

If market swings against my trade, I can find a place to cost average or minimize my losers.

There's no margin call in taking a loss.
There's no NEED FOR a stop loss.

Distinguish between the 2, and this will be your lesson for today.

We can approach your other areas of ignorance when you can grasp this as a basic concept.

Deal?
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #1,923
  • Jan 18, 2014 11:34am Jan 18, 2014 11:34am
By the simplest of Logic....

When support gets broken, it gets tested as resistance.
When resistance gets broken, it gets tested as support.

These 2 statements are the pure confirmation of Market Predictability and are the basis for my statements that if you understand what you are doing, stops are not required.

With all of the bullshit rhetoric and NEWBIE logic that has taken over this thread, it has all been done without the most basic of Chart Analysis.

This is a sample M1 chart with the Hourly Candles superimposed in the background. Basically a look at candles on candles.

Can you see where price was being bought by the Hourly candle Bodies?
Can you see where once this support was broken it was retested as resistance?

Can you understand that this is not an exceptional chart, this happens every day!!!

No Moving Averages.
No fundamental Analysis.
No indicators.

Just simple and pure price reactionary points.

This is the only thing you need to understand about market. If I take a trade and price goes against me, where and when will I have the opportunity to make back the funds or limit my losses?

This is the use of Price Predicability as applied to the essence of trade logic.

2 statements.
1 concept.
SUPPLY AND DEMAND!
Attached Image (click to enlarge)
Click to Enlarge Name: BS.png Size: 25 KB
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #1,924
  • Jan 18, 2014 11:49am Jan 18, 2014 11:49am
The fractal Nature of Market allows this to be seen and applied on all time frames.

Why are some folk long, why are some short?

Why are some both long and short?

Understanding that there is more than a single time frame where price losses support or gains it, gives you a basic understanding as to where price will tend.

Are we in an uptrend, or down?

Depends...

What time frame are you looking at?

Here is another example of where Support was Broken and retested as resistance. Difference?

The range of trade, because of the length of time. These are weekly candles applied to an H4 time frame.

So, when you see Turvy saying that the H4 isn't market relevant or that his system/methodology is only applicable to the M1...

You should be able to see this and understand why the rest of us think that he has wasted almost a decade of his life and still can't grasp simplicity....

Again, a shame really.

Hucking insults like an angry Monkey flings faeces with words that are market irrelevant but defended with rigour, will never make him correct. Will just continue to allow others to hand his ass to him in a market technical and relevant conversation.

Sort the bullshit, and you will see the same thing flowing from a lot of others.

Understand market and work with like minded and you can not only see the same things, but appreciate the benefit of a PRICE PREDICTABLE but INEFFICIENT market.
Attached Image (click to enlarge)
Click to Enlarge Name: w2.png Size: 50 KB
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #1,925
  • Jan 18, 2014 12:31pm Jan 18, 2014 12:31pm
Hello,
I have accepted it because I see trades originatig from it working again and again everyday, on different timeframes.
Moreover accepting price predictability is not a big issue compared to other methods and especially when the overall outcome is compared agains the lack of proper psychology.
The most important point, in my view, is making that step that allows us to consider price predictable but also knowing exactly when our prediction is wrong.
In my view, making money in the market is all about taking trades where that majority does not and knowing when to take partial profits.

My 2 cents,
regards,,

~FibStalker
"markets traded by programs/HFT offer a significant trading edge..."
  • #1,926
  • Jan 18, 2014 12:46pm Jan 18, 2014 12:46pm
1st what magix wrote about resistance/support and turning is TRUE this is basic and everyone should know. He is correct with the being able to predict BUT sometimes it doesn't happen this is the random which occurs. ....I will not comment on stop loss.
2nd I am having difficulty adding trades in the simple strategy room. Anyway you can see I did as requested
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #1,927
  • Jan 18, 2014 12:52pm Jan 18, 2014 12:52pm
Quoting billytt
1st what magix wrote about resistance/support and turning is TRUE this is basic and everyone should know. He is correct with the being able to predict BUT sometimes it doesn't happen this is the random which occurs. ....I will not comment on stop loss. 2nd I am having difficulty adding trades in the simple strategy room. Anyway you can see I did as requested

Insulting Proxy because he uses SLs and shouldn't, thats just account suicide IMHO!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #1,928
  • Jan 18, 2014 3:23pm Jan 18, 2014 3:23pm
Quoting Magix
{quote} With each passing attempt at logic, you are failing more and adding to the ignorance in your traders toolbox instead of valid and relevant information. This is a shame. Being defensive isn't allowing you to actually learn anything, but instead, just emotionally respond. You Don't Need a Stop Loss, if you know how to trade. I can't stop saying this enough. If you need one, you haven't a fucking clue as to what is going to happen. If you understand market, supply and demand, this isn't necessary. Thus my justification behind and have...
I dont know if you are certain about your trades why you dont use a SL,it would not hurt your outcome of the trades,you said it , but it will protect your capital from these:

Attached Image (click to enlarge)
Click to Enlarge Name: eurusdm1.png Size: 30 KB


What are you gonna do if this candlestick would have gone the opposite way of your trade? If you'd have a big leveraged account, which you probably have, and you put a bigger lot size (because you already ignore money management so what can stop you from doing it), this trade would definitely give you a margin call.

Explain it to me?
"There's a sucker born every minute" - P.T. Barnum
  • #1,929
  • Jan 18, 2014 3:24pm Jan 18, 2014 3:24pm
I think that the Founding Question of this thread has it a bit backwards. The real question is why so many people believed in the EMH for as long as they did.

Randomness is not any kind of reasonable default assumption about anything, except to a statistician. Complexity is a good default assumption, but not randomness. Randomness is merely a specific kind of complexity, one that allows people to assume that the underlying complexity is either impossible to determine or irrelevant. I find both of these assumptions to be clearly false and rather lazy. It is as if people are too scared to face the complexity, so instead they decree "It is all unknowable and irrelevant anyway, so don't bother looking".

Well if you do actually look, you find that markets are fractal structures and they possess a non-integer dimensionality. Benoit Mandelbrot and others have written about this for quite a few years now, so it's not as if this is new info. I know that some people had a hard time believing Einstein when his theories contradicted Newton. Maybe this is similar.

We believe in randomness far more than it actually exists in nature, and markets are definitely not random. Where is the proof to support the EMH? That is the real question. The EMH assumes that people are rational! How did anybody ever assume that?
  • #1,930
  • Jan 18, 2014 3:45pm Jan 18, 2014 3:45pm
Quoting Proximus
{quote} I dont know if you are certain about your trades why you dont use a SL,it would not hurt your outcome of the trades,you said it , but it will protect your capital from these: {image} What are you gonna do if this candlestick would have gone the opposite way of your trade? If you'd have a big leveraged account, which you probably have, and you put a bigger lot size (because you already ignore money management so what can stop you from doing it), this trade would definitely give you a margin call. Explain it to me?

Firstly...

Sit out NFP.

There is no good reason to trade this by area...

Secondly, if you are in a trade when the shit hits the fan, you take exit....

SEE HERE.

That was my last trade of the week and typically, I wouldn't have even traded that. Come NY close on the Thursday before NFP, I am DONE!

But, your logic...

Why not?

Well, to me this is like sayin, "I know you know how to swim, but why not wear this life jacket too?"

If you want to, go ahead.

Just don't try and cram your logic down or assume that everybody should play how you think they should.

You are approaching market from a Newbie Standpoint. I am not saying this as a bad thing, just an observation.

Where you refuse to listen and insist on making counter claims, it where you get lost and when you justify bad logic to yourself, it becomes a habit. This will lead you to your market death, because there isn't enough luck to carry you.

Why not try the same approach of listening instead of looking for exceptions to all rules?

Ask questions instead of making bold sweeping statements.

When you start to actually absorb an idea of price pattern and movement and by this I mean, ACTUAL movement, not those droopy boob looking patterns, you will be able to sort some of this stuff. Right now, you are all over the place and missing on all fires.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #1,931
  • Jan 18, 2014 3:50pm Jan 18, 2014 3:50pm
Quoting Proximus
{quote} I dont know if you are certain about your trades why you dont use a SL,it would not hurt your outcome of the trades,you said it , but it will protect your capital from these: {image} What are you gonna do if this candlestick would have gone the opposite way of your trade? If you'd have a big leveraged account, which you probably have, and you put a bigger lot size (because you already ignore money management so what can stop you from doing it), this trade would definitely give you a margin call. Explain it to me?
Hint what happened to his TE's on friday
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #1,932
  • Jan 18, 2014 3:53pm Jan 18, 2014 3:53pm
Quoting Proximus
{quote} I dont know if you are certain about your trades why you dont use a SL,it would not hurt your outcome of the trades,you said it , but it will protect your capital from these: {image} What are you gonna do if this candlestick would have gone the opposite way of your trade? If you'd have a big leveraged account, which you probably have, and you put a bigger lot size (because you already ignore money management so what can stop you from doing it), this trade would definitely give you a margin call. Explain it to me?

Not trying to start a fuss, but I have to say that the chart you posted does not look dangerous to me.

I don't use stops and I trade manually off M1 charts. I would have to say that even a rather quick look at your posted chart reveals a lot:

1) The market is obviously way oversold long before the up spike. You can even see the down momentum fade prior to the spike. I would likely have been long or out, so this chart looks to me like a lost opportunity, not an avoided danger.
2) The spike looks scary at first until you compare its magnitude with the range of the bars earlier in the chart. There really isn't that big a jump in volatility. The market was rockin' pretty good long beforehand, enough so that the increase in volatility really wasn't big enough or discontinuous enough to present a real danger.
3) Trading without stops protects you from a major factor in market moves: Stop Running. Stop users fail to recognize that in limiting one kind of risk, they are greatly increasing another kind of risk which is, in the long run, just as dangerous to their capital.
4) Trading this way yields more profits, which allows your account to grow, which gives you a bigger cushion against infrequent major losses. Use stops and that cushion is gone. The assumption of stops being obviously safer is utterly false.
5) Trading this way yields more profits, which allows you to de-leverage your trades because they just work better, which allows you to trade more safely than people who roll the dice with heavier positions using stops.
6) A stop is no guarantee that you will be filled where you put it. You can be filled ANYWHERE in fast market conditions. And then the market bounces back an hour later anyway, and your trade goes on to victory with you no longer aboard.

It isn't as cut and dry as you think, that's all.
  • #1,933
  • Jan 18, 2014 4:23pm Jan 18, 2014 4:23pm
Quoting Fractalist
{quote} Not trying to start a fuss, but I have to say that the chart you posted does not look dangerous to me. I don't use stops and I trade manually off M1 charts. I would have to say that even a rather quick look at your posted chart reveals a lot: 1) The market is obviously way oversold long before the up spike. You can even see the down momentum fade prior to the spike. I would likely have been long or out, so this chart looks to me like a lost opportunity, not an avoided danger. 2) The spike looks scary at first until you compare its magnitude...
Quoting Magix
{quote} Firstly... Sit out NFP. There is no good reason to trade this by area... Secondly, if you are in a trade when the shit hits the fan, you take exit.... SEE HERE. That was my last trade of the week and typically, I wouldn't have even traded that. Come NY close on the Thursday before NFP, I am DONE! But, your logic... Why not? Well, to me this is like sayin, "I know you know how to swim, but why not wear this life jacket too?" If you want to, go ahead. Just don't try...
If you can manually control the exit, but i doubt you can exit manually quick enough in this kind of situations.

And not necessarly an NFP,but any sort of breakout could frie your cash.

Secondly, from a mathematical standpoint your winrate is what it is, if i assume that Magix has high probability winrates because he is a psychic and can predict his price from his cristal ball, then ok.

But the reward risk ratio is actually : TP/∞ (takeprofit reward : infinite risk)

A stoploss is there for a reason, huge spikes, uncontrolable price fluctuation, any high volatility situation can give you that.If you dont want the SL to mess with your trades then put a 600 pip stoploss, but still must have to put a stoploss otherwise you have infinite risk.

More precisely your account size is the maximum risk you can have, but since a margin call actually saves your a smaller fragment of it, lets say its around 80%,

Now you must be pretty wise about money management since you risk 80% of your account on every trade.Very clever and professional Magix, congratulations you failed on the risk management test .

And of course you call me the newbie, when infact its obvious what you do here.I start to feel sorry for you, your ignorance starts to hurt me.
"There's a sucker born every minute" - P.T. Barnum
  • #1,934
  • Jan 18, 2014 4:25pm Jan 18, 2014 4:25pm
Quoting Fractalist
I think that the Founding Question of this thread has it a bit backwards. The real question is why so many people believed in the EMH for as long as they did. Randomness is not any kind of reasonable default assumption about anything, except to a statistician. Complexity is a good default assumption, but not randomness. Randomness is merely a specific kind of complexity, one that allows people to assume that the underlying complexity is either impossible to determine or irrelevant. I find both of these assumptions to be clearly false and rather...
Hi.its many a year since I heard of mandelbrot.. do you not think it is easier to just believe it is random when the trade goes bad. I have stated many times prediction prediction random. It isnt that I am ignorant of the complexity of what happened or chaos. I just didnt want to know. This complex move could of been explained but perhaps it is better I was not told. After all I traded very simple. It went down as stats. Nice comment you made.. regarding stops. What sort of pip price are we talking about it. I did a lot of compounding and I personally would of been screwed without a stop. But then again I had my method. Be good.
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #1,935
  • Jan 18, 2014 4:35pm Jan 18, 2014 4:35pm
Quoting Proximus
{quote} {quote} If you can manually control the exit, but i doubt you can exit manually quick enough in this kind of situations. And not necessarly an NFP,but any sort of breakout could frie your cash. Secondly, from a mathematical standpoint your winrate is what it is, if i assume that Magix has high probability winrates because he is a psychic and can predict his price from his cristal ball, then ok. But the reward risk ratio is actually : TP/∞ (takeprofit reward : infinite risk) A stoploss is there for a reason, huge spikes, uncontrolable...

Nope. That is an assumption, based on the idea that the market will continue to move adversely and not reverse. You don't know that. In fact, currencies have been shown over and over to have a Hurst Coefficient < 0.5, which makes them anti-persistent. That means that a currency is more likely to bounce back from an extreme move than to keep moving further away. That negates the underlying point of using a stop.

Go ahead and use stops in persistent markets like stocks and agro futures, but in currencies that would statistically disadvantage you.

Infinite risk? WE ALL FACE THAT. It doesn't matter if you use stops or not. You are worried about once-per-decade events when most traders won't even survive a year using stops all the time. Save up your profits to survive the big Bad Days and then there is no problem.
  • #1,936
  • Jan 18, 2014 4:47pm Jan 18, 2014 4:47pm
Quoting Proximus
{quote} Read my previous post, i`m ok with the fact that you dont want your SL to affect your trades outcome statistically, so its ok, put a very wide SL then, like 700 pip one. But to not put a SL at all, is a clear sign of madness.Did you and Magix worked at Lehman Brothers ,hmm ?
Have to be say at 25% account risk SL tops, we aren't talking 700pips here, maybe 100.

I did run the nunbers with no SL with my method, it turned it negative badly.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #1,937
  • Jan 18, 2014 4:48pm Jan 18, 2014 4:48pm
For the record I am not siding with magix lol
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #1,938
  • Jan 18, 2014 4:50pm Jan 18, 2014 4:50pm
Quoting billytt
For the record I am not siding with magix lol

I don't think you actually could...
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #1,939
  • Jan 18, 2014 4:51pm Jan 18, 2014 4:51pm
Quoting Proximus
{quote} Read my previous post, i`m ok with the fact that you dont want your SL to affect your trades outcome statistically, so its ok, put a very wide SL then, like 700 pip one. But to not put a SL at all, is a clear sign of madness.Did you and Magix worked at Lehman Brothers ,hmm ?

You obviously didn't hear me when I said that currencies bounce back. A 700 pip stop is an invitation to get screwed by somebody who knows a lot more than you. "This is where I am willing to give up - come take it!"

Never worked at Lehman, don't know Magix, and I don't care to be lumped in with him into your little feud.

It might be helpful if you could come to understand that other people can do things differently than you do, and differently than the 'obvious' way of doing things.
Check out what Einstein said about "Common Sense" and you will learn to avoid crowd thinking.

Either way, I hope things work out for you.
  • #1,940
  • Jan 18, 2014 4:51pm Jan 18, 2014 4:51pm
The fact that they cant comprehend with their small brains is that even if they put a SL or not they will anyways get stopped at some point, because the margin call is inevitable after a big loss.

Now i ask you guys seriously, isnt it better to have a SL, and actually know ahead the maximum you can lose so you can quantifiy your trade's outcome, and have reliable statistics about your system?

Or on every trade you will bite your nails and pray that you dont get too much negative? Or if you do, you just put more trades on to hedge your risk, but you cant comprehend that by putting on more trades you exponentially increase your chance of a margin call ?

Ever heard of margin requirement ,free margin and used margin?
"There's a sucker born every minute" - P.T. Barnum
0 traders viewing now