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Can't Find the Answers of 2 Really Fundamental Questions

  • #21
  • Apr 30, 2014 2:32pm Apr 30, 2014 2:32pm
Quoting ForexSam
{quote} Perfect! Thanks, FS
You're welcome. Btw, credits to Seneca Pilot for originally posting that paper at FF.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #22
  • Apr 30, 2014 2:34pm Apr 30, 2014 2:34pm
Quoting Rap Skallion
cut
Thanks for the long reply, while I can understand that loading up as many chart as possible could help me to find patters, may I ask you why trader specialize themselves in one or two currency pair? Seems pretty obvious that they should take every profitable trade out there, why they are restrict themselves into 1/2 pairs?

Quoting ForexSam
cut
again ty for helping me here and via PM

Quoting vox dei
{quote} Hi Sam, Sure. Attached is a paper on order flow to get started (a paper which could already be found here at FF). There is plenty quality info available for free on the net. All one has to do is search for it. Cheers, vox {image}
Hey ty for stopping by... and for attaching the PDF, this is exactly what I'm looking for.
You are right, there is plenty of info on the net, but as a newbie, I can't really distinguish between good and bad info
  • #23
  • Apr 30, 2014 3:52pm Apr 30, 2014 3:52pm
Quoting 4StarGen
Hey ty for stopping by... and for attaching the PDF, this is exactly what I'm looking for. You are right, there is plenty of info on the net, but as a newbie, I can't really distinguish between good and bad info
I know exactly what you mean. Imho a productive use of your time would be to look for info on market orders, market microstructure, market participants, etc. This should put on the right track, and from there you'll be able to fill in blanks on your own.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #24
  • Apr 30, 2014 4:03pm Apr 30, 2014 4:03pm
Quoting vox dei
{quote} I know exactly what you mean. Imho a productive use of your time would be to look for info on market orders, market microstructure, market participants, etc. This should put on the right track, and from there you'll be able to fill in blanks on your own.
I don't recall what vox dei does for his trading strategy, but this is the right answer. I think you (4StarGen) and I have had a brief conversation on some of this as well. One piece of advice I would add is that if what you're doing doesn't make logical sense as to why it should work, it's time to look deeper and investigate whether or not you're just wasting time on another gimmick.
  • #25
  • Apr 30, 2014 4:06pm Apr 30, 2014 4:06pm
Yep Kanzler, I decided to open a thread in order to gain more insights, before of this I can't even open a thread since I was a new member... so I start harrassing you and other members ... I just want to say again ty
  • #26
  • Apr 30, 2014 4:32pm Apr 30, 2014 4:32pm
Quoting 4StarGen
Yep Kanzler, I decided to open a thread in order to gain more insights, before of this I can't even open a thread since I was a new member... so I start harrassing you and other members ... I just want to say again ty
Ah yes I'd forgotten about the new user limitations. And it isn't any bother, lol.
  • #27
  • Apr 30, 2014 6:59pm Apr 30, 2014 6:59pm
Quoting 4StarGen
{quote} Thanks for the long reply, while I can understand that loading up as many chart as possible could help me to find patters, may I ask you why trader specialize themselves in one or two currency pair? Seems pretty obvious that they should take every profitable trade out there, why they are restrict themselves into 1/2 pairs? {quote} again ty for helping me here and via PM {quote} Hey ty for stopping by... and for attaching the PDF, this is exactly what I'm looking for. You are right, there is plenty of info on the net, but as a newbie, I can't...
It is my firm belief that traders that restrict themselves to 1/2 pairs are making a fundamental mistake. There are no special characteristics to any one pair, except perhaps for those that have major customers. Good news for the customers is even better news for them, so they tend to go up even more when their customers do, not down as you would expect. This is true of the aussie with respect to china, and of the CAD with respect to the usd.

I remind you not to trade against the swap: those who do so are betting that the less prosperous currency will go up more than the more prosperous one. In the long run this will prove costly. The Aussie has the greatest swap. Some people call trading for the swap "trading the Carry"
The broker seems to have this crazy idea that if he pays you to keep this trade open until it comes into profit, he will make more money. (No he really has no choice.)

There is no edge to trading fewer pairs than your margin allows.
I watch my margin closely: when the margin percentage falls below 150% it is time to sell the losers. Then I ask myself the question,"what losing trades greater than 100 pips out can give me the most margin for the least amount of booked loss?"

I read closely the advice some of the people a trust give newbies. I learn from them as well.
  • #28
  • Apr 30, 2014 7:02pm Apr 30, 2014 7:02pm
Quoting Rap Skallion
I watch my margin closely: when the margin percentage falls below 150% it is time to sell the losers. Then I ask myself the question,"what losing trades greater than 100 pips out can give me the most margin for the least amount of booked loss?"
It's my firm belief that people who hold losers are making a fundamental mistake. You don't hold losers, you cut them and hold winners. Also, some people stick to one or two pairs because they actually put in the work to do a thorough analysis of each pair - when you have 10 on your charting package, you're going to have to take the time to analyze all of those as well and then try to keep up with the market. It can be a disorienting experience. Not trying to berate you but definitely bad advice.
  • #29
  • Apr 30, 2014 7:27pm Apr 30, 2014 7:27pm
Quoting Kanzler
{quote} It's my firm belief that people who hold losers are making a fundamental mistake. You don't hold losers, you cut them and hold winners. Also, some people stick to one or two pairs because they actually put in the work to do a thorough analysis of each pair - when you have 10 on your charting package, you're going to have to take the time to analyze all of those as well and then try to keep up with the market. It can be a disorienting experience. Not trying to berate you but definitely bad advice.
Yes, the earlier you can get rid of aloswer the better it is for you. The 150% thing is an emergency line in the sand that tells me I have not been diligent it this.

i tried trading just one or two pairs in the beginning. It was my experience that the more thoroughly I analysed the pairs, the tireder I got without appreciable results. I did not start booking 100 pips days until I expanded my horizons. There are other traders who use the same technique, I am far from the first.
some of them have balances in the hundreds of thousands of dollars. Don't argue with me, I am small fry. Argue with the likes of Hanover and Bilstein. They have been around for quite a while and are doing very,very well. If I have said something they disagree with thoroughly, follow them and not me... Now I frequently have two or three days during the week in which I book 100 pips. 200 pips is not a rarity: the highest day was over 400 pips. Try the demo and you will see what I mean. Or not, and then this way is not for you.

There are other elements to my method which enhance this.
Wouldn't rather be asking yourself "which ones of these plums do I wish to pick" than "is this trade really good enough to be successful.


If you actually do the demo, try it each way. See for yourself which way you make more money. Don't go with what I say --- go with what works for you..
  • #30
  • Apr 30, 2014 7:33pm Apr 30, 2014 7:33pm
Quoting Rap Skallion
{quote} Yes, the earlier you can get rid of aloswer the better it is for you. The 150% thing is an emergency line in the sand that tells me I have not been diligent it this. i tried trading just one or two pairs in the beginning. It was my experience that the more thoroughly I analysed the pairs, the tireder I got without appreciable results. I did not start booking 100 pips days until I expanded my horizons. There are other traders who use the same technique, I am far from the first. some of them have balances in the hundreds of thousands of dollars....
I'll PM you, something in particular here isn't adding up but I don't want to discuss this in public.
  • #31
  • Apr 30, 2014 8:12pm Apr 30, 2014 8:12pm
Quoting Rap Skallion
{quote} Yes, the earlier you can get rid of aloswer the better it is for you. The 150% thing is an emergency line in the sand that tells me I have not been diligent it this. i tried trading just one or two pairs in the beginning. It was my experience that the more thoroughly I analysed the pairs, the tireder I got without appreciable results. I did not start booking 100 pips days until I expanded my horizons. There are other traders who use the same technique, I am far from the first. some of them have balances in the hundreds of thousands of dollars....
Hey Rap, you talk of pips booked. You realize the number of pips or dollars a strategy makes is irrelevant? What matters is having better return than risk taken.

Are you sure Hanover trades a similar style to yours? I'll just wait Hanover to see your post and speak for himself.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #32
  • Apr 30, 2014 8:18pm Apr 30, 2014 8:18pm
Are you really a 4stargen? Any military experience in leadership at all? I am going to take a giant leap and assume you will understand what I am about to say.

Lets say you need to attack a group of enemy soldiers. You decide the weapon of choice is a tank. In order to have a tank attack, you also need the crew, the mechanics, the supply of weapons, the supply of parts, food, showers, sleeping quarters when you are not attacking, communications, physical fitness, medics, etc, etc. To determine the needs of the battle and the required support to make the crews and tanks function, all these variables are measured and assigned against a workload factor. In this case, a tank. The measurements are consolidated and then associated to the workload factor and present themselves in an algebraic equation.

You simply decide how many tanks you think you need, and voila, the equation spits out all the necessary people and support for that mission. More tanks, the formula provides more people and equipment. Less tanks, well, you get the picture? This is based on probability, or correlation and regression analysis. It is a key component to nearly every military function, as well as efficient corporations.

If you apply this same technique to trading, then as price goes up, so do you. As price goes down, so do you. You forecast how far you travel with price by using the same techniques you used to determine your needs for battle. Does it make any sense yet?

The key difference is that you cannot dictate price. You have to track it. It meanders here and there, but it is heading somewhere. Snipers do not walk straight lines, and neither does the market, but both have a destination. When the math behind the correlation and regression reaches it upper/lower limits, or in other words has exhausted its movement with 68.27%, 95.45%, or 99.73% accuracy, you close the trade for profit. If you consider each movement in price as an individual sample to the overall population, and determine the mean of the overall population, or what I call the equilibrium moving average, then you can calculate that accuracy and make good trading decisions.

Make sense, or too complicated? If you can track the movement of price from its mean then you can predict tops and bottoms and protect profit when the market turns. To me it is the simplest way to trade.

I don't really care much about fundamental information. Why? Once it is known, the market moves, and I predict the direction and exhaustion point. So, why waste time trying to predict which way the market will go next month, next week, next day? Who cares? Just follow it. If you try to lead, and you are wrong, you are in a lot of trouble. Follow at a distance while tracking its destination.
You cannot be extraordinary by being normal
  • #33
  • Apr 30, 2014 10:13pm Apr 30, 2014 10:13pm
Quoting vox dei
{quote} Hey Rap, you talk of pips booked. You realize the number of pips or dollars a strategy makes is irrelevant? What matters is having better return than risk taken. Are you sure Hanover trades a similar style to yours? I'll just wait Hanover to see your post and speak for himself.
1: you are quite correct that the winnings need to exceed the losses ( if that is what you mean). More specifically one needs to keep careful track of Margin vs equity. the ratio is expressed in mt4 as Percentage of margin.
2. I would rather say that many elements of my style and Hanover's style are similar. I like the man. His posts are generally helpful. I find myself adjusting my style to be more like what I conceive his to be (If he still trades).

- How do you calculate risk? If it is certain that the market is plunging toward your stop loss is that risk not greater then if it is moving lightly away? There are times when it is prudent, sometimes necessary to sacrifice balance to reduce margin. Equity is never affected when you close a trade in loss. One should certainly have a reasonable plan in place. When margin is called, your most expensive loss is closed first, and then the next until margin becomes less than equity. (The equity does not change in this process.) You can preempt this process with advantage.

people can be misled by a soaring balance, if they ignore that their equity is not soaring, possibly shrinking, and margin growing leaps and bounds.

The thing you can directly control in this process is your margin: it only changes when you open a trade or close it. In my journal I update my margin every time I open or close a trade. I have a line in the journal that reads maximum margin for the month/minimum margin for the month then a space, and present margin.

This more or less forces me to watch for only the highest quality trades in the best windows I have open.

It is difficult to lay out completely what one things and does in a single post.

I am not selling anything. If you see a post from me asking for money, know that it is counterfeit.
  • #34
  • Apr 30, 2014 10:27pm Apr 30, 2014 10:27pm
Quoting Rap Skallion
{quote} 1: you are quite correct that the winnings need to exceed the losses ( if that is what you mean).
Yes, that is exactly what I mean. Gains must exceed losses on average (i.e., expectancy must be positive).
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #35
  • Apr 30, 2014 11:38pm Apr 30, 2014 11:38pm
Quoting Rap Skallion
{quote} 1: you are quite correct that the winnings need to exceed the losses ( if that is what you mean). More specifically one needs to keep careful track of Margin vs equity. the ratio is expressed in mt4 as Percentage of margin. 2. I would rather say that many elements of my style and Hanover's style are similar. I like the man. His posts are generally helpful. I find myself adjusting my style to be more like what I conceive his to be (If he still trades). - How do you calculate risk? If it is certain that the market is plunging toward your stop...
Mate I hate to say it but you're cruising for a broken account some day. Risk is the amount of your account you're willing to lose before you accept that your position isn't working. It should always be a hard figure before you enter a trade, not some soft value that you just add to as you go along.
  • #36
  • May 1, 2014 2:35am May 1, 2014 2:35am
Quoting 4StarGen
" You have to find what works for you" or something like that. I can't really understand how such statement could be true. The market has its own rules, trader just can't find what work for them, they have to understand how market works... and once they do that, they have to exploit. Of course, different traders, could have different strategies, but I can't see how many strategies can work at the same time...
The answers you've received in this thread so far are an example of "you have to find what works for you". People have given you various opinions based on things that ostensibly work for them, but of course you don't have to take any of the specified paths in order to be profitable. There are many ways to skin this cat, but many more to lose your shirt (or at least lose money). At the end of the day you have to consider that most people speculating in the markets are losers, and that applies to this and other forums as well.

"Many" strategies can work at the same time because a strategy can be based on any of the various idiosyncrasies of the market, patterns or behaviour in the very short term or medium term or longer term, and the various influences on the market in those timeframes. You may find that something works for you whereas you're unable to make money with something that works for someone else; I'd suggest this is generally true for discretionary traders, because once you're in a trade you then have to manage it, and what works for you will include things such as how much drawdown you're willing to allow, whether you can endure holding a trade for days or only minutes, whether you're willing to see big swings in open P&L or not, etc... but then that is also based on your read of the market (if you're a discretionary trader), which could make you cut something quickly or hold on longer, whereas someone else trading the same "strategy" might not have that feel and so manage the trade differently.
  • #37
  • May 1, 2014 3:40am May 1, 2014 3:40am
Quoting eurotrash
{quote} The answers you've received in this thread so far are an example of "you have to find what works for you". People have given you various opinions based on things that ostensibly work for them, but of course you don't have to take any of the specified paths in order to be profitable. There are many ways to skin this cat, but many more to lose your shirt (or at least lose money). At the end of the day you have to consider that most people speculating in the markets are losers, and that applies to this and other forums as well. "Many" strategies...
Exactly: The purpose of a demo is to work out your mistakes, find a winning strategy before you put money at risk.

I have no objection to catastrophic stop loss be aware that they do not always work. sometimes the market plunges too rapidly for the broker to find someone to take it, then the price slips drastically. This can happen fairly frequently on a week end. (But that's no excuse for you not to have one in place.

Under normal circumstances you will never see the loss get hit. If you see price getting down there, take preemptive action.
  • #38
  • May 1, 2014 3:46am May 1, 2014 3:46am
Quoting Rap Skallion
{quote} Exactly: The purpose of a demo is to work out your mistakes, find a winning strategy before you put money at risk. I have no objection to catastrophic stop loss be aware that they do not always work. sometimes the market plunges too rapidly for the broker to find someone to take it, then the price slips drastically. This can happen fairly frequently on a week end. (But that's no excuse for you not to have one in place. Under normal circumstances you will never see the loss get hit. If you see price getting down there, take preemptive action....
Here he goes again quoting himself. What an egotist!

I take back that a trader cannot do well on two or three windows. I have found that some can do well this way.

Work it out for yourself in your demo which way is best for you.
  • #39
  • May 1, 2014 4:07am May 1, 2014 4:07am
Quoting dkrock
Are you really a 4stargen? Any military experience in leadership at all? I am going to take a giant leap and assume you will understand what I am about to say.
No, I am only fascinated by the army ranks...btw I understood what you wrote ty for the help


@ everybody else... ty for the help really, right now I have a lot to research on
  • #40
  • May 1, 2014 5:39am May 1, 2014 5:39am
I want to add a question.

If a trader is legit, why he's selling it's trading system? In the commercial section there a ton of "coaches" who are selling their system for a few hunderd/thousand bucks...
This absolutely makes no sense to me..if one is to proficient in the market he won't sell his secrets to you and obv, if he is so remarkable he should be rich now, the money of the courses shouldn't change his finances...
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