I can predict moves but then I forget how. Why? | Forex Factory

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I can predict moves but then I forget how. Why?

  • #1
  • First Post: Apr 26, 2014 8:23pm Apr 26, 2014 8:23pm
I was playing with Forex Tester 2 days in the row. I noticed a strange pattern in my trading but I really can't mold it in a concrete strategy.

I was playing with only one pair and the main idea was to enter trades in the opposite direction where the PA roules say. I didn't use any pending orders, just plain brutal market orders. No indicators as well, besides an indicator that displays Demark swing points as support and resistance and that because I like to keep at least some underwear. Offcourse there were discretionary roules like for example not to fight a running trend, a big bar in the opposite direction should be left alone etc. It was like magic. I could almost call every tourning point and I even cached some big trends. Not much thinking and no position sizing. It felt like I was in the zone or something. Naturaly there were some losses too but not anything to care about.

After a couple of hours I started loosing. I told to my self "Dude focus" and the dude focused and the imaginary profits came back.

Unfortunately today I lost my mojo. All my trades were turning in disaster. My entries were so random that I almost blown the account. I did some pointless Internet browsing and I returned back to my tests. This time somehow I had the state of mind like yesterday but I played with a different pair. And again profits everywhere. I did even better than yesterday.

I think I had my aha moment but I really can't keep it.

Has this happened to you? How did you make a strategy from this? Writting roules down is a solution but how do you transfer a state of mind on paper?
  • #2
  • Apr 26, 2014 9:09pm Apr 26, 2014 9:09pm
Hey I can definitely relate, the same thing happened to me for years in fact. I would test a system, or even develop one whilst on the tester and almost holy grail like, win win win.. Go to bed after ripping through a few weeks. Wake up and try the same thing again, then nothing, lose,lose lose.. wtf?

All I can say is that it's good you're noticing the fact that a system CAN work extremely well for a window of time before doing the complete opposite. You need to test for years of data, not just weeks or months.

I'm guessing when you changed pairs, you went back to the same date again?

My current system I can go back to any date and trade it profitably on the tester. When you can do this, you know you have something good. Keep at it, forex tester is very good (I have it also) but can be frustrating for the reasons you've highlighted.

Something else I used to do, which sounds similar to what you were doing was ask myself,, OK what is every trader and his dog going to do here>?.. Then I'd do the opposite and volla win win win... But even this only works in certain market conditions.

So (I'm guessing) all you're experiencing is the changing of market conditions which is why people talk about systems failing eventually, which is why a new system is posted in the systems forum every week, which is why most of these threads inevitably die, which is why trading is not as easy as it first seems, which is why 95% fail, which is why people lose lots of money trying to trade forex, which is why people prematurely quit their jobs to trade full time and get themselves into an awkward situation, which is why, which is why, which is why./// !

Your challenge is to build something that can adapt, withstand or work with these changing conditions. Also something you can define, it's very hard to trade on gut feel for long periods.. I used to ask myself,, I know I'm doing something here, but what is it? I need to define it.. I would react to things, and very well, but I could never define exactly what it was I was reacting to. But it must be something that you're seeing and therefore definable, yes?

But market changes volatility amongst other things so that gut feel you have (or had) will one morning just not be there.. when things change
Howlin' at the Moon on the Roof
  • #3
  • Edited 10:46pm Apr 26, 2014 10:16pm | Edited 10:46pm
Until you have statistical amount of trades (min 200 but 2000 is much better)

http://en.wikipedia.org/wiki/Fooled_by_Randomness

I am not saying you don't have an edge. Start a trade journal, do 200 trades, then check your win % (or +/- pips because not all trades are 1:1)
You are doing the the right thing by constantly practicing. Just like a basketball player spending hours in gym throw free throws. He does not learn to throw them live in a game, but we seem to do that in trading, just jump right in.

Flip a coin 10000 times, you will end up roughly at 50% but looking at the results you will see long periods of streaks where 1 side came up 10-15 times in a row.
  • #4
  • Apr 26, 2014 11:02pm Apr 26, 2014 11:02pm
Quoting Wolf_Wicked
Hey I can definitely relate, the same thing happened to me for years in fact. I would test a system, or even develop one whilst on the tester and almost holy grail like, win win win.. Go to bed after ripping through a few weeks. Wake up and try the same thing again, then nothing, lose,lose lose.. wtf? All I can say is that it's good you're noticing the fact that a system CAN work extremely well for a window of time before doing the complete opposite. You need to test for years of data, not just weeks or months. I'm guessing when you changed pairs,...
Wolf, I think you were neither in a zone nor some strange state of mind or any such thing. These were few random trades based on first reaction to whatever your mind was thinking at those particular moments when you took or closed your trades. These were few completely random trades regardless of their outcome. These trades could have gone anywhere.

With my little knowledge of currency trading, can say there are basically three types of traders:
1. Short-term traders who look for frequent trades of few pips
2. Long-term fundamental traders who try to predict overall direction of the market based on known, developing or likely fundamental factors
3. Don't know how to term this third type, but they are technical traders who trade based on how maket behaves or moves. Again, there are several branches of these traders. These maybe PA readers, pattern traders, spike traders, news traders, etc. These people try to make or lose money on betting how market moves. I sometimes use a couple of similar techniques like taking chance of a small bounce on a shorter timeframe whenever PA touches a key long-term level. This long-term key level could be anything from a weekly open/close/high/low to a 50% fib of a mega move.
The Thief of Wall Street
  • #5
  • Apr 26, 2014 11:18pm Apr 26, 2014 11:18pm
Quoting Chicky
{quote} Wolf, I think you were neither in a zone nor some strange state of mind or any such thing. These were few random trades based on first reaction to whatever your mind was thinking at those particular moments when you took or closed your trades. These were few completely random trades regardless of their outcome. These trades could have gone anywhere. With my little knowledge of currency trading, can say there are basically three types of traders: 1. Short-term traders who look for frequent trades of few pips 2. Long-term fundamental traders...
You're absolutely right chicks and my whole post was a pile of shit. I once also saw a UFO.
Howlin' at the Moon on the Roof
  • #6
  • Apr 26, 2014 11:34pm Apr 26, 2014 11:34pm
Quoting Wolf_Wicked
{quote} You're absolutely right chicks and my whole post was a pile of shit. I once also saw a UFO.
Not exactly. There are many things we do under the influence of our subconcious mind. This mind acts based on what happened in the past. Pitty is that our concious mind may not figure out this. Let me tell you about an event which you can find on the net. A team of fire fighters went inside a building to control a fire. The fire chief for no apparant reason asked them to immediately get out of the house. As soon as everybody was out, there was a sudden explosion inside the house and flames consumed the whole building in few minutes. The chief did not know why he ordered everyone out exactly at the right moment. A later study revealed that it was not sixth sense or something like that, but a past experience that got stored in the chief's sub-concious mind. He acted based on that information without conciously thinking about it. He felt something was wrong and ordered his team out. When fire consumes all air inside a burning building there is a pause of quietness, no sound of burning wood or other material, then when fresh air gets into the burning building fire once again flares up. In fact the fire chief without conciously thinking about it felt that quietness and oderded everyone out because his subconcious mind indicated the danger.

Similarly, what you did was probably based on your past experience of similar situations how pa behaves stored in your subconcious mind.
The Thief of Wall Street
  • #7
  • Apr 26, 2014 11:50pm Apr 26, 2014 11:50pm
I used that program too when I was learning practicing VSA and what you guys said did happen to me too. The most interesting of them all is that when you practice on it, and I would speed it up to see if I am right or wrong fast, the most interesting thing happens, you can ignore bad trades and then you see a trade that is so obvious it can never go wrong and sure enough you were right. But that might happen in hours on the simulator but in real life the safe trade might come one every week and that's why i think it's easier to trade with Big account. I sure envy those guys with millions to trade who can make one trade a week and be good. But we all have to start somewhere.
Being a trader is lonely, but being a great trader is lonelier still
  • #8
  • Apr 27, 2014 1:02am Apr 27, 2014 1:02am
I remember when I was playing around on FX CM's platform backtesting years ago, that I had a "hunch" for predicting breakouts. Turns out it was juts PA was in one of the right side corners of the screen and the program had already adjusted the vertical scale for the next candle. Too bad the live markets aren't that easy, haha.
  • #9
  • Apr 27, 2014 3:19am Apr 27, 2014 3:19am
Quoting Chicky
{quote} Not exactly. There are many things we do under the influence of our subconcious mind. This mind acts based on what happened in the past. Pitty is that our concious mind may not figure out this. Let me tell you about an event which you can find on the net. A team of fire fighters went inside a building to control a fire. The fire chief for no apparant reason asked them to immediately get out of the house. As soon as everybody was out, there was a sudden explosion inside the house and flames consumed the whole building in few minutes. The...
so the fire chiefs subconscious picked up on things that the conscious mind was not aware of but still able to, as there were some clues or triggers. In the markets I would definitely not let my subconscious trade for me, how could I trust it consistently? but hopefully it could teach my conscious the things it is seeing that my conscious is currently blind to. It must be something? Anyway I trade a defined system these days and perhaps I'm more conscious of things that were only subconscious in the past.

But I remember trying so hard to define that gut feeling, and never could.

Nice post
Howlin' at the Moon on the Roof
  • #10
  • Apr 27, 2014 3:28am Apr 27, 2014 3:28am
subconsciously act consciously :nerd:
  • #11
  • Apr 27, 2014 2:19pm Apr 27, 2014 2:19pm
Quoting grin
subconsciously act consciously :nerd:
Your subconscious mind needs some correction. Something wrong seems to be in there. Something like the wedding cake does not kill sex for good in the bride.
The Thief of Wall Street
  • #12
  • Apr 27, 2014 2:39pm Apr 27, 2014 2:39pm
Quoting KMidas
I can predict moves but then I forget how. Why?







Because after a while you lose your beginner's mind.

http://en.wikipedia.org/wiki/Shoshin
  • #13
  • Apr 27, 2014 3:36pm Apr 27, 2014 3:36pm
Thanks for your answers. I was a bit reluctant for this post because I thought it was just a silly thinking of an amateur. Unfortunately what I am getting from all this discussion is that there is nothing concrete to gain from this. Am I right?
  • #14
  • Apr 27, 2014 4:32pm Apr 27, 2014 4:32pm
Quoting KMidas
Thanks for your answers. I was a bit reluctant for this post because I thought it was just a silly thinking of an amateur. Unfortunately what I am getting from all this discussion is that there is nothing concrete to gain from this. Am I right?
Our mind is known for playing tricks on us.

e.g.,
http://en.wikipedia.org/wiki/Hindsight_bias
http://en.wikipedia.org/wiki/Processing_fluency
http://en.wikipedia.org/wiki/Cognitive_heuristic
http://en.wikipedia.org/wiki/Priming_(psychology)
http://en.wikipedia.org/wiki/Cognitive_bias
etc
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #15
  • Apr 27, 2014 4:55pm Apr 27, 2014 4:55pm
Quoting KMidas
Thanks for your answers. I was a bit reluctant for this post because I thought it was just a silly thinking of an amateur. Unfortunately what I am getting from all this discussion is that there is nothing concrete to gain from this. Am I right?
Did you forget the rules? Are you even able to reproduce your good results by trading the same date range again? May be you were in a different market which was forgiving. Then it changed. May be you hit your limit after a few hours of staring on charts. We cannot know. People throw ideas here, but you have to figure out what applies to you.
  • #16
  • Apr 27, 2014 5:25pm Apr 27, 2014 5:25pm
the answer is in the question

because you "predict"

"I can predict"
My Best Trade is Next Trade!
  • #17
  • Jun 13, 2014 3:42pm Jun 13, 2014 3:42pm
A very strange thing happened this week. I had posted a week ago an idea for a entry setup hopping that will get help to make it more mechanical. Maybe the setup is really useless because I didn't see any interes. It is not a perfect setup as it has many failures, some can be filtered some can't. Anyway I proceeded to trade it with my demo account. So far this week the account is +555 pips in the green without any losses. That is not in itself interesting. Interesting is the fact that I passed some setups because... umm just didn't like them. For example
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpydaily.png Size: 38 KB


The arrow shows where I got a signal for short. I passed it. I did well.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusddaily.png Size: 38 KB


I kept this trade open even when it reversed right after I got in, even when turned back to negative. I don't know where I found this confidence.

Attached Image (click to enlarge)
Click to Enlarge Name: audcaddaily.png Size: 42 KB

In this chart I anticipated the price would turn against that red bar. Unfortunately I had a buy limit which didn't activate and maybe I overestimated the target, who knows.

I believe the subconscious mind is accumulating experience. 6 years, even if they are failure, can make your brain recognise patterns. The 10000 hours everybody is talking about.

Also I feel that not everything we need is right there in the chart. Especially when it comes to daily charts. I passed trades because the euro felt weak, the aud strong etc. How did I develop this feeling? By following 28 pairs probably.

What I am worried is that this sync and feel may fade with time and maybe arrogance and boredom will take over.

Does anyone use discretion or gut feelings successfully? What is your experience?
  • #18
  • Edited 6:04pm Jun 13, 2014 5:31pm | Edited 6:04pm
Ok since you ask if anyone trade off feelings, I guess am going to chime in for what it's worth. I don't trade like most people here and my understanding of the market is different, so I am going to say this the easiest I know How.

Ok for you first chart, the signal was right, but the next day, the GBP buyers came in and bought back almost the same amount that was sold. The New Zealand buyers were out in force and the JPY sellers were out also, put all together and the going long was a good trade, if you were short then I would recommend closing at that point.

For your second chart, I think I should point out that it was the USD buyers that created the resistance line you are trading now, at the moment of closing on friday, the USD buyers came back, but the GBP pound sellers are no where to be seen. The market is in favor of the GBPUSD going up and the buyers are in control buy not by much, by my estimation the market is still in the hands of the bulls, but they have lost 35 percent of there power over the coarse of the day, and as of typing this there is no signal to go short. Wait and see is best advice for this trade anything could happen.

And finally your last chart, Well where to start with that one. The resistance line that was made there was made buy such a small amount of sellers compared to the level of activity that happened before, that I wouldn't even consider it much in the way of resistance, if any significant buyers come, they are going to break that line pretty easy, same for sellers, it can go either way. Lol I would say that pair is confused, the Aussie buyers came back but they were less than the previous sellers, that were less than the previous buyers. Again there is no signal, at least not on the daily chart that I can see, if you are in a long trade you can stay in at this point.

Oh let me add that the line at 1.035 has about 3 times as much orders than the one you are now, so if you get up there trade carefully. I don't trade technicals, so I am only giving this from a technical point of view.
Being a trader is lonely, but being a great trader is lonelier still
  • #19
  • Jun 14, 2014 10:43am Jun 14, 2014 10:43am
@ saneblane
Very interesting thought process you have there. I understand that this is not exactly how you think of it but just an attempt to describe it. To tell you the truth I didn't quite understand what are you describing. I have seen before this kind of analysis describing bulls and bears and the ongoing war between them but I never understood. I can't see the imbalances and how they are developing. But still it is very impressive that you can get these conclusions from watching the charts.

I was thinking today that since trading is more an art form, not everything can be explained and fit in a mathematical model. Everyone perceives in his own way. You can teach a painter about colors and combinations but you can't teach him eyes and hand coordination.
  • #20
  • Aug 24, 2014 2:48pm Aug 24, 2014 2:48pm
if you can predict moves using 1 hr chart then you are in deep trouble
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