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I've figured out why so many people lose money in Forex

  • #41
  • Feb 22, 2015 6:14am Feb 22, 2015 6:14am
Quoting Asw
{quote} I personally know a millionaire who'll consistently double a $50K account in less than 6 weeks trading.
Debauchery. I could do that in a couple of days.

  • #42
  • Feb 22, 2015 6:57am Feb 22, 2015 6:57am
Quoting squawk
For me understanding the probabilities are important. Spending countless hours going back through price charts until your eyes are bleeding and understanding the probabilities of price movements can give you both a psychological and statistical edge. I think it is this kind of hard work that helps in making a trader successful by understanding and having confidence in the probabilities and expected outcome of their trades. For instance understanding some probabilities (that are not just random chance is important) as an example: If Asian session...
Great post Squawk!

Quoting GDR3k
{quote} Debauchery. I could do that in a couple of days.
And you've done so many times.
Ghost Rider - WWTBMD?
  • #43
  • Feb 22, 2015 8:05am Feb 22, 2015 8:05am
Quoting Tom_D_Trader
{quote} Thats pretty rude. {quote} Now thats very rude. I suspect you must be either idiot, or rude kid. Anyway, welcome to ignore. Am very sorry for you guys. Sick :/

The pleasure is all mine, believe me. Thanks for making it easy to weed out all the worthless charlatans that troll this forum. /ignored

P.S. If any of you guys want to weed out some scammers/worthless posters from this forum, take a look at my ignore list . It's not that long yet but it's a good place to get started. And for the opposite you can look at my subscriptions
  • #44
  • Feb 22, 2015 8:10am Feb 22, 2015 8:10am
Hi again , what a nice weekend chat here.
Quoting replaced
If you're making Forex trades purely based on price action, then I don't see how it's not random. HFT should be removing any possibility of making money based on price action, just like HFT removes the possibility of making money by triangular arbitrage.
This is pretty common thought between traders. And though you are on the right track here and pretty possibly becomes valid, it is not now. See, those HFTs are working on a very different principle than you do. You cant compare. Theyr watching correlations in milisecconds, they dont care about triangle arbitrage. That would be regular automated systems doing these. And still, these systems were made by people. Yes, they are faster, but also very stupid. Am gonna give you examples: I have been working in HFT, while trading at the same time, waiting for ECB conference. And I was saying to my employers: "Hey guys, you should shut that bot down, theres gonna be this conference you know, and bot cant analyze it, stops will widen and you are gonna get screwed." They didnt listen. They got heavy screwed. Bots cant analyze press conference. Last year, some guys hacked twitter account of a senator and tweeted White house just got bombed. All automated systems automatically sold it. All people automatically bought it, coz knew thats BS. It was a day of victory of mankind against bots.

See, there are more and more examples, where those bots fail even in intraday movements. And they are totally unable to analyze long term fundamentals. Only people can.

So yes, you can say the lower timeframe the higher influence of HFTs. But till they got their AI, people still rule. And the higher timeframe, the more they rule.

The funny thing here, me having experience with HFT, when I watch support break, I sometimes zoom very heavy into tick chart, and watch HFT fighting for support. Sometimes I even bet bot is gonna defend it . Actually taking advantage of HFT.

Quoting replaced
However the information needed to determine what that coin flip will be is impossible to access as a trader. So a coin flip is in essence random even though the results could be determined if the information could be accessed. Just as you can't make a system to determine what the next coin flip will be so you can't make a system that determines in what order the next buy/sell of a currency will be.
No sorry. It is not random, thats total nonscence. You cant be saying when ECB started QE is just a random boost for stocks and Eur sell. Yeh, yeh, when we print 60Bn a month, we d better sell those stocks right? Coz there is no cash :/. This is absurdly simple example, but see, market is suffering from this "Butterfly effect". Is the same like with weather. The paralel here is: Wave of a butterfly wing in Asia can crash US markets. Market is made by people. Lots and lots and lots of people. Is totally impossible for someone to analyze all inputs in the market. There is always this "external variable" you can analyze further. Is so much, noone can grab it complex, so in essence there is always place for a better analysis and you have a chance to beat market benchmark. I repeat here - the random thing you suggest implies totally effective market - meaning all informations in universe are available to everyone. I just cant see that happening.
T
"I know one thing, that I know nothing." Sokrates
  • #45
  • Feb 22, 2015 10:41am Feb 22, 2015 10:41am
You forgot the most important one...and it´s not hidden, it´s called stop hunting by the big casino owners...they call it "liquidity pools"....
  • #46
  • Feb 22, 2015 11:46am Feb 22, 2015 11:46am
Quoting dkrock
Being unable to control your emotional responses is the reason most traders fail.
Well said!
Trading is the hardest way to make easy money...
  • #47
  • Feb 22, 2015 12:01pm Feb 22, 2015 12:01pm
Quoting replaced
{quote} ... So seeing someone out there with 10% winning trades out of 1,000 should be common just due to sheer odds. If there are 1,000 people that go on this forum, you should easily have 100 or so that seem to have possible winning systems based on their performance. Even if a trader boasts about having 1,650 winning trades out of 3,000 with gains and loses the same pip wise (55% win rate) still doesn't mean that it's a winner.
Interesting discusion. So who is by your standards/methodology a winner? Someone that has 60% win? 70%? Through how many trades? 3000? Through what time fram and what capital % gain? At what point would you re-consider your view that marker is not random and money can be made?
  • #48
  • Feb 22, 2015 12:42pm Feb 22, 2015 12:42pm
Quoting Tom_D_Trader
Hi again , what a nice weekend chat here. {quote} This is pretty common thought between traders. And though you are on the right track here and pretty possibly becomes valid, it is not now. See, those HFTs are working on a very different principle than you do.
...
They got heavy screwed. Bots cant analyze press conference.
Actually bots can analyze a press conference and make money off of it.

http://www.micronautomata.com/computational_finance

In fact, it's the reason why most stocks will go up or down instantly based on an earnings release or an interest rate change by the fed. Even feed from Twitter or CNBC TV is constantly being monitored. Most newswires even make sure news releases can easily be analyzed electronically. If Merkel is speaking so that it can't be analyzed, they do have people at the HFT trading desks to change settings within seconds to let the software know.


Quoting Tom_D_Trader
I repeat here - the random thing you suggest implies totally effective market - meaning all informations in universe are available to everyone. I just cant see that happening. T
No, completely wrong. What I'm saying is the complete opposite and you're misrepresenting my position. All information in the universe is NOT available to everyone, so nobody KNOWS where the market is headed or what the next tick will be. What can be done though is set a probability of where the market could be headed due to the fed, inflation, GDP growth, etc... The smaller the time-span, the less these factors have an impact and the more randomness plays in. If you're looking at a 10 minute tick chart, about 99% of the price movement is all randomness.


Quoting IndigoPingvi
{quote} Interesting discusion. So who is by your standards/methodology a winner? Someone that has 60% win? 70%? Through how many trades? 3000? Through what time fram and what capital % gain? At what point would you re-consider your view that marker is not random and money can be made?
I would go for a six sigma or 0.00034% chance that it's not just a 50/50 coin flip system that you would be dealing with. To reach six sigma, you would take the actual results and compare it to a 50/50 coin flip and see what chance of a 50/50 coin flip has of replicating your results. This is done by a 1 tailed 2x2 chi square.

Quoting cuchuflito
You forgot the most important one...and its not hidden, its called stop hunting by the big casino owners...they call it "liquidity pools"....
There's stops at every single pip so how would there be stop hunting?
  • #49
  • Feb 22, 2015 12:47pm Feb 22, 2015 12:47pm
Quote
Due to randomness in the Forex market, an account is very likely to suffer a string of bad loses resulting either in a very highly leveraged position to make back what is lost or a lower leveraged position but with more pips needed to make back what is lost

you seems to have a curious way of trading.
if you are practicing revenge trading then you will drown faster.

why do you have to wait 200 trades before you realize you dont have an edge ?

Quote
The best theoretical ROI is probably 1x leverage and a long term position with no stop loss/gain

I can just advise you to trade stock market and give up forex trading
at least with penny stocks you dont have to use leverage and if you are lucky well who knows
  • #50
  • Feb 22, 2015 1:05pm Feb 22, 2015 1:05pm
Quoting replaced
{quote} If you're looking at a 10 minute tick chart,
... lol
Ghost Rider - WWTBMD?
  • #51
  • Feb 22, 2015 2:51pm Feb 22, 2015 2:51pm
Quoting replaced
Actually bots can analyze a press conference and make money off of it.
Eheh, man, please read my post again. I put it in bold letters and gave you two examples how bots fail. Nothing more I can do for you here. If wanna be blind, be blind.

Quoting replaced
No, completely wrong. What I'm saying is the complete opposite and you're misrepresenting my position. All information in the universe is NOT available to everyone, so nobody KNOWS where the market is headed or what the next tick will be. What can be done though is set a probability of where the market could be headed due to the fed, inflation, GDP growth, etc... The smaller the time-span, the less these factors have an impact and the more randomness plays in. If you're looking at a 10 minute tick chart, about 99% of the price movement is all randomness....
Am very right sorry . I am not misrepresenting your position, but you seem to totally misunderstand where the random part of market comes from. So let me expand on theory of effective markets:
If all informations are available to everyone, they are instantly absorbed by price. Should this work, market would be moving always in the right direction and when new info becomes available, it instantly shifts. Since all get info at the same time, noone can be prepared and beat market benchmark. Also could be achieved if market was controled by one entity. In such a market, both FA and TA are meaningless and PA could be considered random.
The more globalized market becomes, the more effective = random it is.

The point is, because you dont know shit and still invest, market is not effective.

Because anyone can invest leveraged 100:1 into market he is never heard of, Bloomberg can move the market by releasing "shocking news", making idiots invest billions. Move will not be random, move will be because Bloomy released it. When EU gets under pressure, ECB cuts. You find it so shocking Eur drops after? You have not answered any single of my questions. I also doubt you read what I write and possibly dont understood. So let me use bold letters again:

There is no upper force controlling FX market with all infos about it. It is the biggest market in the world with turnaround 5Tril daily. This market cant be effective. Period.

T
"I know one thing, that I know nothing." Sokrates
  • #52
  • Feb 22, 2015 3:34pm Feb 22, 2015 3:34pm
Quoting Tom_D_Trader
{quote} Thx for asking, am having a pretty bad weekend coz lost about 2% this week on my Yen bets . Shit happens. Btw, ofc gambler can manage initial risk, especially in things like gambling with life. You always can do a good decision to split universe in your favour. But mate, you are talking to professional poker player and also a guy who often calls himself bachelor of chaos . I totally dont believe anything in our life is granted. I have lost quite lots already, no matter what decision I have made - and not talking forex here. It resulted...
The most honest I have ever read here!
PVSRA
  • #53
  • Edited 4:57pm Feb 22, 2015 4:44pm | Edited 4:57pm
Quoting Tom_D_Trader
{quote} Move will not be random, move will be because Bloomy released it. When EU gets under pressure, ECB cuts. You find it so shocking Eur drops after? You have not answered any single of my questions. I also doubt you read what I write and possibly dont understood. So let me use bold letters again: There is no upper force controlling FX market with all infos about it. It is the biggest market in the world with turnaround 5Tril daily. This market cant be effective. Period. T
Back to the flipping a coin example. If the ECB does something, sure that will immediately move the currency market. However just as you shouldn't know what the outcome of a coin flip is going to be, you won't know what the ECB is going to do with certainty. Once a coin lands heads or tails, then the market (mostly HFT) will instantly take advantage of that and change the price to what they believe to be equilibrium. If you're placing a trade one second after the news then you're too late. Just look at EUR/CHF. It doesn't matter how big the Forex market is since prices can change dramatically in milliseconds.

As far as saying that there is no upper force controlling the FX market, it doesn't matter. Wouldn't no upper force controlling the FX market mean that it is more near what it should be? EUR/CHF seems to be much better valued now that an upper force has been removed. If there is an upper force controlling a stock or market, then it's probably more likely to be undervalued or overvalued so you can make a decision based on that valuation more easily.

Even if there were no commissions, no spreads, and no trading costs, your ROI would still be negative in Forex if you were placing random trades. To figure out why, change the ROI in the calculator to zero and play around with the volatility number. Even try setting ROI to a small positive number with a high volatility and see what happens.
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  • #54
  • Feb 22, 2015 5:04pm Feb 22, 2015 5:04pm
Quoting replaced
Back to the flipping a coin example...
Lol man. I have already put quite some effort into explaining this, so I will do one last shot. So, I repeat: Butterfly effect. I also repeat: Bots are stupid.

There are millions and millions things affecting market. Short term, long term, mid term, whatever. Millions of things with varying impact in time. The fact bot sells it faster right after cut, doesnt change fact you can anticipate it. Also, the bot is totally unable to evalue long term impact of cut or QE. Now please take a look at Dax. Was it surging only miliseconds after ECB QE, or days?

T
"I know one thing, that I know nothing." Sokrates
  • #55
  • Feb 22, 2015 5:25pm Feb 22, 2015 5:25pm
Quoting dkrock
{quote} Thank you for your opinion on the matter. And double thank you for attempting to reference a mathematical probability to it. Sir, may I ask you a stupid question? Besides your fears you referenced, when you place a trade, does the market go up or down from that point? In your analysis, it has another direction, or dimension, other than up or down, and I really cannot quantify it. On my trading charts, price can only go up, or price can only go down. So, on my trading charts, each trade is 50:50. Would you like to use the broker I use so...
I don't trade numbers, I trade people, and I am one of those people. So when I look at a chart, I try to keep myself out of it, and look at what people have been doing, because they are likely to try to keep doing what they have been doing. That's how I look at it, myself.
If you are good at something, never do it for free--Joker
  • #56
  • Feb 22, 2015 5:55pm Feb 22, 2015 5:55pm
Quoting dkrock
Hello. By your analysis, should I conclude you have not made a Forex trade yet? It seems to me that commission is commission, and is not applied against the leverage, but against position size. At least that is how my commission is calculated. $X times number of lots. It seems to me you are analyzing position trades of equities with Forex. Why would anyone have a stop of 250 pips? That is ridiculous. Volatility is your best friend. Without it, the market is flat and you make nothing. You reference volatility of your account balance. ?HUH? I am sorry...
One of the best posts I've ever read on FF. Thank you.

You've been able to articulate my view on trading in a clear and concise way.
Follow me on twitter @FxLester
  • #57
  • Feb 22, 2015 6:09pm Feb 22, 2015 6:09pm
Quoting dkrock
{quote} As a former options trader who never lost a trade, what are you talking about? I closed my options for profit every single time and not once did they ever run to exercise day. As far as your comment about control, I think you just do not understand how we trade. We do not "imagine" where price will go. We follow it until it changes direction. That is why we are not gamblers. We play follow the leader, not try to guess where they are going. It is much, much easier and more profitable and allows us to trade, rather than gamble. We stick to...
You've never lost a single trade on options?

How many trades are we talking here?
  • #58
  • Feb 22, 2015 6:10pm Feb 22, 2015 6:10pm
Quoting dkrock
Thank you for your opinion on the matter. And double thank you for attempting to reference a mathematical probability to it. Sir, may I ask you a stupid question? Besides your fears you referenced, when you place a trade, does the market go up or down from that point? In your analysis, it has another direction, or dimension, other than up or down, and I really cannot quantify it. On my trading charts, price can only go up, or price can only go down. .
I kinda feel like an idiot saying this, but: Although it can go only up and down, which are two options, both of them have different probabilities.

I really think is not that hard to grip.
"I know one thing, that I know nothing." Sokrates
  • #59
  • Feb 22, 2015 6:50pm Feb 22, 2015 6:50pm
Quoting dkrock
To begin your meditation, ask yourself why you think there are two different probabilities. It seems obvious that you prefer to concentrate on the more greedy direction, and ignore the other as insignificant. Do you have a "buy" only mentality? Why are you unable to trade both directions? Placing a "probability" factor is just an excuse for ignoring a trade you are "afraid" to take. Solve that problem, and you should improve your trading skill. Good Luck
Eh, it seems obvious you dont know a heck about math and also about FX. See, I dont have a buyer mentality, because I trade a currency pair. I always buy one currency and sell the other. Also not very hard to grip . Give it a shot.

Well smartass, you beat me, there is no such thing as probability of a direction. You have finally solved question I have been asking myself whole life. There is no direction of life and my actions are based randomly, therefore whatever I do, it wont change the outcome. So I may as well call you an idiot and it wont change a thing. You will still be idiot .
"I know one thing, that I know nothing." Sokrates
  • #60
  • Feb 22, 2015 7:29pm Feb 22, 2015 7:29pm
Quoting dkrock
Nice response.Your definition of probability infers a time element, which is what you neglected to extrapolate. Without the time element, what is the probability????
Gimme a break smartass. Ok, there is no time... right.

So, lets progress with your scenario. Time does not exist. Our actions do not have values in the future. Whatever we do, it wont change the outcome. This is basically what you are saying.

Well, there is a religion for it, think is called fatalism, or something like this. I have never been much into these mumbo jumbo.

I hope your life is fine, although you still stand by a stance our actions have no value. Well, my do, am sorry if your dont. You are asking why I am responding to you now? Coz I was watching open and also trade Tokyo. And in the meanwhile, since you keep on quoting me and insisting on this fatalist nonscence there is no future, but a cointoss, as a philosopher I have to disagree. See, I am living nice life, helping my neighborhood. I did lots of good and I see impacts of my actions in the future. I know if I help someone, i raise probability he will be a good guy and will help someone in the future. I like probability of direction. Therefore, I am a bit upset when I see people like you saying we shouldnt care about our mates, coz nothing makes sence, because time does not exist.

I just dont see this conversation heading anywhere, sorry. Live your fatalist life and leave me alone please.

T
"I know one thing, that I know nothing." Sokrates
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