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  • #81
  • Aug 20, 2014 6:00am Aug 20, 2014 6:00am
i like this thread. i suggest intra day trading - 20pips per day..on EJ or GJ

for risk i suggest 0.5 lot per $1000 equity.

SL is recommend 10-20pips. TP 20pips and above.

number of trades per day 1 or 2.

each week if successful this should generate 50% ROI

compound weekly gains.
practising coitus interruptus
  • #82
  • Aug 20, 2014 1:39pm Aug 20, 2014 1:39pm
Quoting LITEchild
{quote} Hey buddy, love the logic behind that ema. I'm getting tuned in to letting the market decide most aspects now/... mind sharing?
You mean a .mq4 file I suppose. Sorry I code everything in java with my own framework. I can't code in MQL. The API of MT4 is .... well, no way I learn!
But don't be sad this MA is not so good anyway. A SMA20 would do as well. Maybe better (smoother). It was just to say that the PA should drive the parameters.

The problem of any MA-like filter is that we wish two things that are in opposition. First we would like the MA to sit horizontally in the middle of the price during the ranging periods and which follows quickly the price when a trend starts and signal quickly when it's about to end. The problem is that if the trend is to be caught quickly the MA will follow the swings in the ranges and "oscillate". To flatten the oscillations we lag at the breakout. If we try to predict the future PA to extrapolate the filter we pay the cost of overshooting when the forecast is wrong.

That's the best I could do so far. These two "ribbons" are built using a Kalman filter. One is built from a constant range bar chart of 20 pips and the second with a range of 40 pips. The chart is the 20 pip range. When overlapped they look like J.M. Hurst's cycles. All the parameters are infered from the past price data. There is no tunnable parameters to set except of course the pair and the range.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-kalman.png Size: 65 KB
No greed. No fear. Just maths.
  • #83
  • Aug 20, 2014 4:47pm Aug 20, 2014 4:47pm
Quoting PipMeUp
{quote} You mean a .mq4 file I suppose. Sorry I code everything in java with my own framework. I can't code in MQL. The API of MT4 is .... well, no way I learn! But don't be sad this MA is not so good anyway. A SMA20 would do as well. Maybe better (smoother). It was just to say that the PA should drive the parameters. The problem of any MA-like filter is that we wish two things that are in opposition. First we would like the MA to sit horizontally in the middle of the price during the ranging periods and which follows quickly the price when a trend...
hmmm...interesting.
  • #84
  • Edited 6:48pm Aug 20, 2014 6:37pm | Edited 6:48pm
Quoting PipMeUp
{quote} You mean a .mq4 file I suppose. Sorry I code everything in java with my own framework. I can't code in MQL. The API of MT4 is .... well, no way I learn! But don't be sad this MA is not so good anyway. A SMA20 would do as well. Maybe better (smoother). It was just to say that the PA should drive the parameters. The problem of any MA-like filter is that we wish two things that are in opposition. First we would like the MA to sit horizontally in the middle of the price during the ranging periods and which follows quickly the price when a trend...
Interesting, good theory, but i`m really tired of theories.Does it work in practice, thats the big question, could you trade profitably off this or not, because at the end of the that only money matters

If it cant make money then its useless, there are millions of technical theories involving trend spotting,following, market cycles, blabla, but only few of them could (maybe,because i havent seen one so far) make money.And the sad thing is that i havent found any technical tool that can make consistent money so far, and believe me i tried almost all tools.

The biggest problem with this kind of trading is the subjectivity problem, no matter how accurate you make your trend detector, there will be still people who would lose with it, because its interpretation is very subjective.I havent seen a "signal" so far which could say: buy here, sell here with SL and TP of X.Until we can find an objective approach like that, which would work of course, expect the "90% of retail losing ratio" to stand.

The fact that its colored like that, i believe 100 different traders would interpret your indicator 100 different ways,and probably 90 out of 100 traders would not make money with it
"There's a sucker born every minute" - P.T. Barnum
  • #85
  • Aug 20, 2014 9:59pm Aug 20, 2014 9:59pm
I was going to suggest Fibonaccis' numbers, but that is almost like going at random... Or Alligator - if someone is informed of the full extension of Bill Williams' method we could use that "x bars in the future prediction". And if you can adapt one moving average to the market or other indicators i am sure you can make the Alligator adapt somehow as well.
  • #86
  • Aug 20, 2014 10:13pm Aug 20, 2014 10:13pm
Quoting phdmonster
I was going to suggest Fibonaccis' numbers, but that is almost like going at random... Or Alligator - if someone is informed of the full extension of Bill Williams' method we could use that "x bars in the future prediction". And if you can adapt one moving average to the market or other indicators i am sure you can make the Alligator adapt somehow as well.
If it was that easy... i would be a billionare by now.

I did this too, and it turns out that the DD will be unpredictable, it could make profit, sure but the DD could be 100%, because we could not use STOPS, because that compromises the whole concept.

Here: http://www.forexfactory.com/showthread.php?t=487974

It would be a BUY/SELL at a signal and close at the opposite, however we could not use STOPLOSS in this case for this to work.

If we do want to limit the risk, by using stoploss, then this method would not work, because the outcomes will be again too random because it would require too much optimization, which is very unreliable because the market structure changes more frequently than you can trade one structure type profitably.

The market is more tricky than you think.Many highly intelligent people got devastated by it, trading is definitely the hardest way to make money, but its the only way where you can make tons of money with almost 0 work once you decipher it.
"There's a sucker born every minute" - P.T. Barnum
  • #87
  • Aug 20, 2014 10:28pm Aug 20, 2014 10:28pm
How hard is it? Well you know the "90 rule",which is: 90% of the traders lose 90% of their account within the first 90 days

Proof: check out here http://www.forexfactory.com/trades.php

At the TE section "this year" and "live accounts", and check out the top 10 people, and look for the "SHARPE RATIO", those who have a SHARPE RATIO under 1, those wont make it in the long term, regardless of their smooth balance curve.And its crazy but almost none of the top 10 guys have a sharpe over 1, most of them average around 0.1 and 0.3, which is lame, and signals that they probably use excessive risk, as the SHARPE RATIO measures the risk free return.

If its over 1 then it might have a chance of survival in the long term (5-10 years), if its under 1 then its only a question of time and luck, when they will lose their earnings.

Its pretty sad but its true,its very hard to trade profitably, thats why i`m concentrating in this thread on a small-medium risk method, which either get's us rich quick, and then we could trade more safely, or has a longevity.

The best fund managers in the world have a SHARPE around 3.2 ,thats the difference between institutional and retail

But dont confuse the risk free return with the account risk, because when i said we could risk 4-5% of the account or more, can also have a sharpe over 1, provided that the return will be also big, so overleveraging doesnt necessarly means that our sharpe ratio is low, because the sharpe ratio is in most cases low due to "no edge" or "gambling types of systems" or by not using stops which is silly

If the top 10 live accounts in the top list barely has sharpe ratio over 1, then imagine how the rest of the traders perform, pretty sad isnt it?
"There's a sucker born every minute" - P.T. Barnum
  • #88
  • Aug 20, 2014 11:21pm Aug 20, 2014 11:21pm
I only suggested Alligator for trend direction.

I traded Alligator for some time but on daily charts and it was so slow to watch that my ass burned... And i used a simpler strategy Alligator + Fractals (i am sure you are familiar with it). Took good profits but i required patience (a lot of it) from my part. And only using these can't show you the trend with 100% (i think).

That's why if we could adapt somehow only the Alligator... But then again it predicts the future (or at least tries)... So i am not sure if it would work for the purpose of showing the trend or showing us ranges and so on. Again - it was just an idea rolling in my head :-)
  • #89
  • Aug 21, 2014 12:13am Aug 21, 2014 12:13am
Quoting avibe
i like this thread. i suggest intra day trading - 20pips per day..on EJ or GJ for risk i suggest 0.5 lot per $1000 equity. SL is recommend 10-20pips. TP 20pips and above. number of trades per day 1 or 2. each week if successful this should generate 50% ROI compound weekly gains.
Wow man every time i see your post, and beneath it your TE in your signature, every time i watch your return drops -20%.What happened there bro, you were up like 120% and now you are at -50% ? Lucky that it was only a demo

Quoting phdmonster
I only suggested Alligator for trend direction. I traded Alligator for some time but on daily charts and it was so slow to watch that my ass burned... And i used a simpler strategy Alligator + Fractals (i am sure you are familiar with it). Took good profits but i required patience (a lot of it) from my part. And only using these can't show you the trend with 100% (i think). That's why if we could adapt somehow only the Alligator... But then again it predicts the future (or at least tries)... So i am not sure if it would work for the purpose of showing...
No indicator is better than other, or atleast not the old ones, i`m sure pretty clever people invent all sorts of indicators on a day by day basis, and if any of them work, then its surely not the old ones which were invented in the 1980's because the market changed alot since then.

If there is any chance that a technical system can be profitable, it must be with an updated new indicator, which was invented probably after the 2008 since the latest big change in the markets was after the crisis.As volatility dried up in the markets, and choppy markets were dominant since then.

The alligator and those old BS indicators were invented in the 1970-80's where there was a big economic growth for all countries, so the trend was more powerful back then, we dont have that luxury anymore.An economist said that the next "economic boom" for the G7 countries in not happening before 2030, so the markets will stay like this for some time
"There's a sucker born every minute" - P.T. Barnum
  • #90
  • Aug 21, 2014 12:16am Aug 21, 2014 12:16am
Quoting Proximus
How hard is it? Well you know the "90 rule",which is: 90% of the traders lose 90% of their account within the first 90 days Proof: check out here http://www.forexfactory.com/trades.php At the TE section "this year" and "live accounts", and check out the top 10 people, and look for the "SHARPE RATIO", those who have a SHARPE RATIO under 1, those wont make it in the long term, regardless of their smooth balance curve.And its crazy but almost none of the top 10 guys have a sharpe over 1, most of them average around 0.1 and 0.3, which is...
If you want a sharpe >1, then I can only suggest using an EA...
  • #91
  • Aug 21, 2014 12:36am Aug 21, 2014 12:36am
Quoting Proximus
The fact that its colored like that, i believe 100 different traders would interpret your indicator 100 different ways,and probably 90 out of 100 traders would not make money with it
No man 100% of them would fail because, like you, they want a local estimator to tell them when to buy and when to sell in a highly chaotic highly non-linear environement. They will fail because they want to see trading signals popping out of an indicator that has never been designed to do this. This indicator is only designed to estimate the most likely current market state for a given timeframe (it doesn't "repaint" like the MT4 people say). There is one single interpretation of this indicator: a mean, a velocity, an acceleration and the 3 variances associated to these measures. So it must be useless because it doesn't make money.
No greed. No fear. Just maths.
  • #92
  • Aug 21, 2014 12:47am Aug 21, 2014 12:47am
Quoting PipMeUp
{quote} No man 100% of them would fail because, like you, they want a local estimator to tell them when to buy and when to sell in a highly chaotic highly non-linear environement. They will fail because they want to see trading signals popping out of an indicator that has never been designed to do this. This indicator is only designed to estimate the most likely current market state for a given timeframe (it doesn't "repaint" like the MT4 people say). There is one single interpretation of this indicator: a mean, a velocity, an acceleration and the...
I see, however that wasnt my point, my point which i concentrated upon is the concept of subjectivity of the markets.Doesnt matter what your indicator is designed to do, if you would give them to 100 traders and dont tell them how to use it, everyone would start to interpret it from a subjective view, and they would associate RED color with SELL and GREEN with BUY,and would trade it, and still 10% would manage to be profitable with it, and 90% would not.

You see the concept of subjectivity ,what i`m trying to say, is that even if an indicator is giving BUY/SELL signals from a cooking book, which is silly, but interestingly the 90% loser ratio would still stand.

Thats why almost all of the indicators out there dont differ much, and some of the traders make money with it, some of them dont.It's as if the indicators doesnt really matter in trading, because success is so randomly distributed that in some cases maybe only lucky people become rich, and it has less to do with skill.

I hope i`m wrong about this, but so far all evidence points to this, the market wasnt designed for making money
"There's a sucker born every minute" - P.T. Barnum
  • #93
  • Aug 21, 2014 12:55am Aug 21, 2014 12:55am
Quoting Proximus
{quote} Interesting, good theory, but i`m really tired of theories.Does it work in practice, thats the big question, could you trade profitably off this or not, because at the end of the that only money matters If it cant make money then its useless, there are millions of technical theories involving trend spotting,following, market cycles, blabla, but only few of them could (maybe,because i havent seen one so far) make money.And the sad thing is that i havent found any technical tool that can make consistent money so far, and believe me i tried...

Get post Proxy!

Do you know why?

Because you are beginning to understand that..............there is no spoon.
If you are good at something, never do it for free--Joker
  • #94
  • Aug 21, 2014 12:59am Aug 21, 2014 12:59am
Quoting jmn5611
{quote} Get post Proxy! Do you know why? Because you are beginning to understand that..............there is no spoon.
Obviously full technical analysis is too random to be profitable,every experienced trader knows or should know that, or atleast it requires 99999999+ hours in front of the chart to spot a pattern which may be or not be there at all.Charts can be illusionary at some points and very misleading, especially @ news periods.

So i always suggested integrating fundamental tools in trading too, however they are hard to quantify and translate into price-action, yet imperative.

The main quest here is to integrate price action with fundamentals, probably thats the closest we can get to the HOLY GRAIL

Edit: i like your status "Naked punting is for Idiots", its from that mini series with Anton the HF manager, he is a good trader and we can learn good stuff from him, i watched his videos on youtube and they are impressive.
"There's a sucker born every minute" - P.T. Barnum
  • #95
  • Aug 21, 2014 1:12am Aug 21, 2014 1:12am
We are going to have to make one for ourselves then. Noone will give us such a thing for free - unless they want to help the thread. Or at least anything good. That shows the trend good.

How do you suggest we intergrate fundamentals into this? "However they are hard to quantify and translate into price-action" >... That's the tricky part isn't it? Even if we do integrate them we can never know with 100% how price will react to fundamentals (the general direction) and the power it will react with (in pips for example).

I've seen interest rates rise with 0.25% and market does nothing. Same thing in different country/currency and the market goes bananas... If we are going to integrate fundamentals i suggest we start with one currency - for example EUR/USD or USD/JPY. From then we statisticly measure what happens with the market when news that affect it go out. Further in we can add foreign currency news to the statistics and see how they affect the market (if at all). And if we can corelate these foreign news to the price action in that given moment....

I am a big skeptical, but i don't think it is imposible to do to some extent.

However, statistics is not my thing and i am not as good as i want to be... So i can't provide the analysis - i can only give ideas in that matter.
  • #96
  • Aug 21, 2014 1:35am Aug 21, 2014 1:35am
Quoting phdmonster
We are going to have to make one for ourselves then. Noone will give us such a thing for free - unless they want to help the thread. Or at least anything good. That shows the trend good. How do you suggest we intergrate fundamentals into this? "However they are hard to quantify and translate into price-action" >... That's the tricky part isn't it? Even if we do integrate them we can never know with 100% how price will react to fundamentals (the general direction) and the power it will react with (in pips for example). I've seen interest rates rise...
I think the most logical one, if not the only one ,method is to find undervalued and overvalued currencies and trade that pair.The same thing as Buffett traded stocks,but with currencies.

If the currency is overvalued, then logically the interest rate hike of 0.25% will not affect it, however if its undervalued then it will have a huge impact on it.

Also detecting undervalued/overvalued currencies is not hard, there are many currency strength indicators out there, what is hard is to predict the impact of various news events on the market, because obviously we dont know the news data before the release, so we can only trade the news data after, but only if the impact will last hours after the release.

Some news events decay fast 20-30 minutes after the release and whipsaw in that time, while some events may not have an impact at the exact time of the release but in "hidden mode" it does move the currency, i believe the later is more efficient to trade, because these usually cause the trends.

For example, if an NFP has an expected value of 200k, and it comes out 100k, it may make a huge down candle on the USD, but that can whipsaw back as many traders were long and simply dont let themselves drown.

On the other hand, if a GDP report comes out just 0.1% less than previous and makes a mid sized impact, that trend may continue downwards later on as for some reason the big funds did not put too big positions on and they also waited for confirmation of the news data before placing big trades.In this case the initial impact is small yet the trend in that direction could continue even for weeks.

I believe this is how trends are born, the hard part is to quantify this, what is the threshold of this to happen, what news do influence the price, etc.
Because its not so simple as it sounds, because news traders only focus on high impact news, where in reality the mid impact or high impact, but anticipated news create the trends without whipsaws.
"There's a sucker born every minute" - P.T. Barnum
  • #97
  • Aug 21, 2014 1:38am Aug 21, 2014 1:38am
Quote
I see, however that wasnt my point, my point which i concentrated upon is the concept of subjectivity of the markets.Doesnt matter what your indicator is designed to do, if you would give them to 100 tradersand dont tell them how to use it, everyone would start to interpret it from a subjective view, and they would associate RED color with SELL and GREEN with BUY,and would trade it, and still 10% would manage to be profitable with it, and 90% would not.
This isn't subjectivity. That's stupidity. If 100 morons play around with an indicator without even asking what it is supposed to show they simply deserve losing their money. Stupidity tax.

When I discovered the technical indicators I never wondered "where to buy? where to sell?". I searched for each of them their formula with the questions "What is it suppose to measure? Why does it want to measure this? How does it measure it? Is it a correct way to measure this? What are the limits of this measurement?". I didn't backtest a single one. I rejected the Bollinger Bands because the maths are wrong. I rejected ATR because like you it mixes and matches two different concepts under the same term volatility. Among all the indicators a single one was designed to take a trading decision: pSAR (closing by trailing a stop). All the others are only showing/estimating a facette of the market context.

Quote
I hope i`m wrong about this, but so far all evidence points to this, the market wasnt designed for making money
Markets were created to avoid arbitrage opportunities. That is to make speculators lose. Market is simply made to hunt and kill us!
No greed. No fear. Just maths.
  • #98
  • Aug 21, 2014 1:50am Aug 21, 2014 1:50am
Quoting PipMeUp
{quote} This isn't subjectivity. That's stupidity. If 100 morons play around with an indicator without even asking what it is supposed to show they simply deserve losing their money. Stupidity tax. When I discovered the technical indicators I never wondered "where to buy? where to sell?". I searched for each of them their formula with the questions "What is it suppose to measure? Why does it want to measure this? How does it measure it? Is it a correct way to measure this? What are the limits of this measurement?". I didn't backtest a single one....
Its subjectivity, or shall i say subjective stupidity, it only proves that 90% of those traders are stupid, which is so, if they would not be stupid they wouldnt lose money, obvious.Just go to the Trading System section and you find plenty of morons there doing exactly the same thing
I only wonder if a stupidity tax would exist and we would have to pay X amount every time we make a stupid thing, most of us would go broke, you know human stupidity is infinite as Einstein said

On the other hand, measurement is also somewhat flawed, there is not much to measure in the markets, because you only have 3 pieces of information : Bid,Ask and Volume(which is not really volume, more like ticks frequency).What can you measure ?
In other markets where there is LEVEL 2 data, you can perhaps see the true liquidity pool and find some correlation between buyers and sellers but because FX is too big, even if you trade at a broker which does show your LV2, it only shows the inhouse LV2 not the entire market's liquidity.

So what can you really, truly measure, what information can you extrapolate from these 3 parameters which tells you anything about the future direction with a >50% accuracy ?

Not much if you really think about it.

Edit: even less than that, because in MT4 only the bid is historical, you dont see the historical Ask price, so actually its Current Bid,Current ASK, Historical Bid ,Current Volume and Historical Volume ,where VOLUME= TICKS/CANDLE
"There's a sucker born every minute" - P.T. Barnum
  • #99
  • Aug 21, 2014 1:56am Aug 21, 2014 1:56am
You are right, Proximus. How do we decide if the currency is overvalued or undervalued? And even if we do we will have to be able to do that constantly because the undervalued currency may becore overvalued or it's value could just decreas a bit. That has to be measured too.

And every currency or currency pair responds somewhat differently to affecting factors. So the sensitivity has to be taken into account as well.

And Buffet always had crazy ideas :-D
  • #100
  • Aug 21, 2014 2:05am Aug 21, 2014 2:05am
Quoting PipMeUp
{quote}Markets were created to avoid arbitrage opportunities. That is to make speculators lose. Market is simply made to hunt and kill us!
Well in economy class i learned that the market is the place where demand meets supply, so markets are not made for speculators, speculators are only a byproduct of greed

Markets are an exchange, where the market makers, the ones who pass the instruments, sell it to the demand which are the large institutions, in currency markets the CB is the issuer of the instrument where they lend the money to the market maker banks and they sell it to whomever trader wants to buy it for any reason they do, at the current fair price, while the price is always determined by the supply-demand relation.

Speculators are only wannabe rich guys who just abuse the price differences to make money, while not adding anything to the market except perhaps liquidity.

Arbitrage is only destroyed by the electronic cominication networks (ECN) ,were becasue the prices travel at the speed of light you can only arbitrage the slow network conections.Back in the 19th century you could buy a stock in the Tokyo exchange at 20$ and sell it at the NYSE at 30$ at the same time, given that you had a good telephone connection.Too bad you cant do that today
"There's a sucker born every minute" - P.T. Barnum
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