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Much of Forex talk is illusional esoteric talk

  • #41
  • May 19, 2015 1:52am May 19, 2015 1:52am
Quoting MapleLeaf
Forex = Casinos = Gambling = Betting. Want to make money? Go work. Invest in real things.
Friends, when it comes to Forex heed this valuable advice. It's the only true statement here.
  • #42
  • May 19, 2015 2:07am May 19, 2015 2:07am
Quoting hjkl185
{quote} Friends, when it comes to Forex heed this valuable advice. It's the only true statement here.
And we should take it from somebody who knows? And thats you?
My signature is: "Classified".
  • #43
  • May 19, 2015 2:15am May 19, 2015 2:15am
Quoting MapleLeaf
Forex = Casinos = Gambling = Betting. Want to make money? Go work. Invest in real things.
With this kind of attitude i dont really see the use in being here posting about it. Its like telling the postman not to be a postman.
My signature is: "Classified".
  • #44
  • May 19, 2015 3:53pm May 19, 2015 3:53pm
Quoting yaed
{quote} Fair enough, you seem like a pretty reasonable human. Well, talking about "an edge" is also a very unprecise thing to talk about. The meaning of it seem to vary greatly. So lets say "What makes you profitable" is the same as "Edge". Maybe i could prove such a thing exists. The question is what would it take to prove it? Will somebody pay me 5.000.000 $ if i prove it? Cause thats what its worth to me right now if i had it, and im not saying i do and im not saying i dont. So if you are after someones edge, you gotta be prepared to "BUY IT"...
I agree that price is all you need, but I still think trading is based on incomplete information. I think we're just interpreting "incomplete information" differently. I meant it to mean where the price will be in the future, which is unknown, and is what we are speculating on.

People may say, "You shouldn't trade based on what you think will happen in the future because you can't predict it, you should trade on what is happening now." I know what they mean and am in complete agreement with what they mean, as I believe successful trading will result from constant evaluation/reevaluation of the "now" price action. So really it's just a matter of wording it.

Personally, I think it's silly for any trader to say they do not try to predict or speculate on future moves. This is just impossible. The second they place their trade, the entry instantly becomes the "past" and there is no way they can close their trade at their previous "now," they have to close it in the "future." Maybe that "future" is only 1 second from the point the entry was made, which was the "now," but it's still the future. And the "now" price will have to move in order for it to be a profitable trade. In order for the price to move, "time" has to happen. Time happening means that the price will have to change in the "future," not the "now." So in order to be a profitable trade, the price needs to change in the future, which means that you are hoping and believe it will change favorably in the future, which means you are speculating/predicting where it will be in the future.

Please note that the last 2 paragraphs are not addressed to you yaed, but in general.
  • #45
  • May 20, 2015 2:21am May 20, 2015 2:21am
The instant that a trade is opened is a statement of a belief in future outcome.

Quoting Rabid Leper
... Personally, I think it's silly for any trader to say they do not try to predict or speculate on future moves. ...
You are absolutely right. Any person who denies the viability of technical, fundamental and any other form of analysis which provides a recommendation for trading really should not trade. All of the other clichés about MM, trends, stops and R:R are merely attempts at damage limitation in the event that things do not go to plan. They also are necessary.

There have been occasions when some fundamental events have made some trades blindingly obvious, such as the moment that Abenomics was born. Those events are infrequent and therefore various other techniques have been explored over the years to find ways of identifying the less obvious trading opportunities. Understanding the true effects of leverage is key at such times. If a trader sold the Yen at the onset of Abenomics and yet was over-leveraged or under-capitalised, their account would have survived only by luck.
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  • #46
  • May 20, 2015 4:03am May 20, 2015 4:03am
Quoting Myrmica
{quote} But would it not just take more time to lose my capital in case my strategy is still flawed or only a 50:50 game? Of course in general your advice is correct but I still think the having a profitable strategy is the main thing.

Hello Myrmica. Just wanted to chime in and agree with your premise regarding the need for a profitable strategy. No matter what anyone says it is a profitable strategy - one that you can count on - that makes a truely successful trader successful. Without a profitable strategy it is impossible to creat wealth by trading no matter what you in the way of money management, great money management + a crummy strategy will equal a slow agonizing financial death of your account.

That being said I want to tell you that there is hope, there are profitable ways to trade. You can call them systems if you must but what you're really looking is an edge. You just need an edge, comething that is overlooked by the masses and only used by a very few. This means you are not going to find something like this - as a whole - these forums but you can find clues here and there. I account it similar to "finding waldo". Waldo is right in front of you in plain sight and view but still very hard to see because of all the noise. Calm your mind. Put your real account away and break out a demo or two. Look for people less advanced than you to reach out and help where you can. These are the things that will give you the best chance to become successful regarding forex trading. Get a good grasp of how money flows in and out of the markets... If I may recommend one good book you might consider making a true study of. In my opinion is Dalton's "Mind over Markets" or something similar to it would be a great start. A hard study of a book like this (by hard I mean really study it for months until you truely understand 80-90% of what's in it can really improve your trading success. The reason I mention this book is that pretty much everthing you need to know about how markets really work is in a book of this type and you really need a good understanding of markets to realize the ebb and flow of market participants.

The biggest drawback to learning to trade successfully is that only YOU can create something that is successful for you. People that have successful systems are not going to share them with anyone and even if they did, you (nor I) would be able to trade it successfully. Why? Because any system someone else creates even very successful ones are born partly of that persons personality so much of the way their system is traded comes from that single persons experience and intuition up to that point. You have to create your own personal system and you can not do that without losing money if you don't find it by trading Demo only. One caveot to this is if you're in a part of the world that allows micro/mini 1cent per pip trading, in my opinion it is helpful to trade when learning using these types of accounts so you can feel the hurt when you lose a trade but you're in actuality only losing a few pennies. If you can not get a 1 cent per pip account then just use a demo account. Hope this makes sense.

Good luck | I wish you the best.
Charts never lie! (everyone else does) ... now where's that FF Adult lounge
  • #47
  • May 20, 2015 9:22am May 20, 2015 9:22am
I agree with TraderJoe, you need to find a strategy that suits you best. No-one here is going to reveal how he or she
trades the markets, either successfully or not.

There is no one magic indicator or one single strategy that will give you consistent wins.
You obviously have learnt the similarities between forex & poker, controlling emotions and the need for a clear strategy.

What puzzles me is, if you are successful at poker, why do you need to trade forex ?
You have an edge with poker, are you prepared to graft & put in the time to learn something new ?
Like Poker you need to understand who you are playing against.
It never gets easier, you just get better
  • #48
  • Edited 12:56pm May 20, 2015 12:31pm | Edited 12:56pm
Most if not all industries/business are (in some way) about making money of people less informed (eg perhaps I don't know how to make a good game so I buy a game but I can't be sure it's really good or not - youtube helps in this case lol). Of course real (not con-)artists tend to be more honest and genuine (you have to be or the art will suck - of course many people can't tell difference between good and bad art!) and they tend to be poor because they do the opposite : real artists sell their art for less that it is really worth in my observation. That's why there's so much art investing. Of course again, only artists (and informed collectors/experts) can easily spot what art is worth much - non-artists only spot rising prices and invest based on buying high and sell higher theory.

So if the fx market has following participants (maybe more idk): fx-service providers, retail traders, pro traders, commercial hedgers, funds, (central)banks, market makers... now if you think of trading as your business, then the relevant question is, who of these can you make money out of? For first couple years of studying fx I really wanted to make money of the banks, central or otherwise. The problem is, while back in the day this was feasible (when there were direct fx interventions, carry trade, more prop trading - their human traders weren't always as good as the algos these days though - and now algos have got AI behind them), some kind of "Soros" type trades where you can make the bank bleed are rare these days - betting CHF to unpeg was such opportunity but due to high swap costs you probably had to do it through futures or some sort of private deal.

So if you are trading very short holding times, the question really is, who have similar holding times out of those participants. I would argue mostly traders hold short times and HFT/some fund algos. Market makers may have inventory at times.

It very quickly boils down to short term retail traders trading against other retail traders (even more so in bucket shop type of situation). Why do most of these people lose? It has to do with the short hold time and the spreads and commissions added by broker. If all these novice traded either direct or through a platform without commissions and no spread markup, even the losers would stay around a bit longer. (When I was demo trading, I found that in one bucket shop the expenses were so small and the market didn't react to my trades at all .. winning by discretionary scalping was so easy I doubled the account in just hours... - same tactics on a more realistic broker an I blew up dozens of accounts before I figured it was all due to the spread) - also those who hold longer lose because compared to short term traders they are investing in lottery tickets/insurance. So no matter what you do, you lose. You really need advantage/reads on many timeframes and perhaps sell the lottery tickets instead if your lottery ticket picking skills suck.

I guess what I am saying is that if you fail at FX, go try something like idk, bitcoin or whatever where it's possible to trade real money without fees. If all the "dumb money" move to bitcoin from FX, I'll move there too - because pro traders will trade wherever the trading is suitable (has dumb money involved), not whatever market they happen to hold dear (eg. I might like CHF but if it's illiquid because of SNB scaring people away, it's not good idea to trade). The advantage for both the pro and the novice is the lack of commissions and spreads. The disadvantage is that with no middle men (brokers) making big bucks, there's no marketing of it beyond the whole fresh and unique news value it has had in last few years so it's less liquid due to that reason. So to repeat: as far as intraday trading goes, if you aren't where the dumb money is right now, then you are missing out. This is really no different than some cheap arse brick and mortar with crappy quality clothes setting up shop in the best location of the town. Suitable fx analogy here is: if the dumb money trades at 10 o clock, that's when you want to be trading too. The next step is of course to make some epic non-sensical "system" thread that gets a bunch of followers so you know exactly when the dumb money trades based on the system rules.

Oops. I probably spoiled the edge of about 100% of people talking in the systems forum. Sorry.
  • #49
  • May 20, 2015 12:37pm May 20, 2015 12:37pm
Quoting Rabid Leper
{quote} I agree that price is all you need, but I still think trading is based on incomplete information. I think we're just interpreting "incomplete information" differently.
Well sure, i mean some trader in a bank sitting on a 300.000.000 $ account might get the instruction to trade such and such much above this or that. And maybe what he had for lunch plays into that. I dont know what he had for lunch, but he is going to affect price. And i dont know what the fed and the ECB and bank of England is up to either. In that sense i dont ever have all the info. But that info is stuff that i cant factor in. Instead i concentrate on price, because that information at least i have. And its enough.
My signature is: "Classified".
  • #50
  • May 20, 2015 12:39pm May 20, 2015 12:39pm
Quoting shellsnail
{quote} How do you know what you are saying is true? i.e. the part about "the market is essentially a dynamic beast so there are probably no repeated market conditions at any point in time..." Personally I used to think that as well, but it's just a belief that's not grounded in reality. I used to believe that no system can work and the only way to succeed is to be use some sort of intuition. It's wrong. Definitely wrong. I've seen and proven to myself that there are profitable systems out there, systems that have been profitable for decades and...
One of the best post I have read on the forum in a good minute.
  • #51
  • May 20, 2015 3:17pm May 20, 2015 3:17pm
Quoting yaed
{quote} Well sure, i mean some trader in a bank sitting on a 300.000.000 $ account might get the instruction to trade such and such much above this or that. And maybe what he had for lunch plays into that. I dont know what he had for lunch, but he is going to affect price. And i dont know what the fed and the ECB and bank of England is up to either. In that sense i dont ever have all the info. But that info is stuff that i cant factor in. Instead i concentrate on price, because that information at least i have. And its enough.




We don't need to factor it in,its done for us .the present price is all the information streamed into the result.The result being the price ,the order flow.this result gives us a point of comparison.this flow of quotes has in itself predictive outcomes more probable .what ever words we choose to describe it ,it amounts to the same thing and as you have said yaed this is enough.
  • #52
  • May 21, 2015 1:37am May 21, 2015 1:37am
Quoting shellsnail
{quote} How do you know what you are saying is true? i.e. the part about "the market is essentially a dynamic beast so there are probably no repeated market conditions at any point in time..." Personally I used to think that as well, but it's just a belief that's not grounded in reality. I used to believe that no system can work and the only way to succeed is to be use some sort of intuition. It's wrong. Definitely wrong. I've seen and proven to myself that there are profitable systems out there, systems that have been profitable for decades and...
Well sure, why else would be trading at all?

I did a very interesting experiment with a friend of mine. He never saw a chart before in his life and i opened a E/U M15 chart. I asked him when he wanted to sell and when he wanted to buy and when he wanted to close, and then we scrolled the chart one candle at a time. He did pretty good, he had a profit factor of about 2. If he could just stay calm and strong he probably could make a living as a trader. Hes not going to since he didnt believe me when i said he did good.
My signature is: "Classified".
  • #53
  • May 21, 2015 1:38am May 21, 2015 1:38am
Quoting diceman555
{quote}[/color] We don't need to factor it in,its done for us .the present price is all the information streamed into the result.The result being the price ,the order flow.this result gives us a point of comparison.this flow of quotes has in itself predictive outcomes more probable .what ever words we choose to describe it ,it amounts to the same thing and as you have said yaed this is enough.
Thats what im saying.
My signature is: "Classified".
  • #54
  • Edited 4:50am May 21, 2015 4:38am | Edited 4:50am
Quoting limzy
HI Myrmica, {quote} The market is essentially a dynamic beast so there are probably no repeated market conditions at any point in time, therefore reading the market is more of an art than a science.
I am sorry I would have to disagree. There are many patterns in a random walk market. As i have posted many times on this forum even seemingly random sequences conducted by humans(which markets are) will favor sequences over each other. One of the patterns I measure for has an astonishing high hit rate across nearly every pair.

Going back over 5 Years on the 4 Hour CHFJPY chart this pattern I am currently trading has appeared 66 times and has had a 100% success rate(there will be a failed setup eventually as nothing will remain 100%).

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Going back over 5 years on the 4 Hour AUDCHF chart this pattern has appeared 85 times and has had a 91.7647% success rate.

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And since the market is fractal you better believe these patterns work on any time frame.

Going back a little over 2 years on 30 Minute CHFJPY chart this pattern has appeared 104 times and has had a 98.0769% success rate.

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Going back a few months on the 1 Minute CHFJPY chart this pattern has appeared 817 times and has had a 92.9009% success rate.

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GBPUSD 1 Minute Chart

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AUDNZD 1 Minute Chart

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The market is not some esoteric beast that can not be measured. In fact I believe most traders fail because they are not measuring any aspect of the market thoroughly. Instead they constantly try to trade a method they can not even describe because as you say, its an "art".

The market can be measured IF... you have the right process or model.

A good start is to realize the market will always consist of highs and lows that will either be broken or they wont be. I think every trader in the world can agree on this. This is how the markets had always worked in the past, its how they work in the present, and it is how they will work in the future.
  • #55
  • Edited 8:12am May 21, 2015 7:51am | Edited 8:12am
While this is true... allow me to play devil's advocate...

I think we don't need to know much to profit from the markets. The real cause of failure is traders do too much.. Losers lose because of strings of losses averaging down into a momentum/trend move OR from emotional trading or a big losing trade. (By this definition, I am for sure a loser, because I still tend to slip back into emotional trading sometimes. But this isn't about me.)

See, at any given point, the market is approximately a random walk. There is no directional bias. Then suddenly a thing called "trend" forms and then it travels in the direction of the trend for a bit, and then it reverts back to a random walk, and then a trend forms again... But each time the ticks in the opposite direction kind of more or less cancels out the trend such that in the long run there's no trend and it's all a random walk (from the larger time frame perspective i.e. markets are fractal).

So using this model of the market... Isn't it just painfully simple that, it doesn't matter what position you enter. Make a best guess and set stops wide enough to accommodate the current volatility. And then you wait. Wait for the trend to appear. When it appears, you start adding to your position, and then moving stops up, so that whatever movement the market makes, you capture it as profit. Since trends exist, you are bound to make a profit.

I don't think it can get any simpler. But what are most traders doing? Trying to trade the opposite model -- GRID system. Grid system is saying, well let's profit during the random walk, and let's hope the trend doesn't get out of control. But hope kills. Facts triumph.

***

For most markets, trends exist 30% of the time. But FX is a bit special. It's so special that you know in advance when trends will exist because of how the market opening hours are divided. For sure pairs not traded will RANGE during hours their markets are closed and for sure they will trend when markets are open. If you count the hours, 3+3 hours around london and NY open is around 6 hours which is 25% of the time. So essentially, the game is already hacked for you, you can choose to trade only when trends are most likely to exist. I can't see a simpler market to trade.
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  • #56
  • May 21, 2015 2:18pm May 21, 2015 2:18pm


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  • #57
  • May 22, 2015 1:17am May 22, 2015 1:17am
And then there is always things like this:
http://www.usatoday.com/story/money/...nced/18885767/

We forex traders have to deal with.
Charts never lie! (everyone else does) ... now where's that FF Adult lounge
  • #58
  • May 22, 2015 6:22am May 22, 2015 6:22am
Quoting Sis.yphus
{quote} I am sorry I would have to disagree. There are many patterns in a random walk market. As i have posted many times on this forum even seemingly random sequences conducted by humans(which markets are) will favor sequences over each other. One of the patterns I measure for has an astonishing high hit rate across nearly every pair. Going back over 5 Years on the 4 Hour CHFJPY chart this pattern I am currently trading has appeared 66 times and has had a 100% success rate(there will be a failed setup eventually as nothing will remain 100%). {image}...
Thanks for all the encouraging words. It gives some hope that some have made it to find a successful way to approach the markets.

Congrats Sys.yphus that you found a chart pattern that is profitable. I am also looking at it right now to find some profitable chart formations or patterns.
  • #59
  • May 22, 2015 7:05am May 22, 2015 7:05am
Myrmica in a sense all analysis and everything about predicting the market is just esoteric illusional talk even the 100% pattern somebody mentioned, just another illusional talk (sorry!).

You are missing the big point however, and such big point is:

Market can only go up or down, just 2 directions, that's it.

And it do exactly that, go up, and down, go up, then all of a sudden go down again, etc. etc.
Unless there is some strong fundamental trend that somehow let the market go straight in a particular direction (and that is a money making opportunity!), market would just go up (for hours, days, weeks) and down (hours, days, weeks).

Just cycles, these cycles offer money making opportunities everyday on every timeframe, of course if you are looking for some secret formula (pattern?) and you try to predict what market do next (using small stoplosses etc.) you are eventually going to lose your pants.

But if you trade easy, you can make money.
  • #60
  • May 22, 2015 7:27am May 22, 2015 7:27am
Quoting tunera
Myrmica in a sense all analysis and everything about predicting the market is just esoteric illusional talk even the 100% pattern somebody mentioned, just another illusional talk (sorry!). You are missing the big point however, and such big point is: Market can only go up or down, just 2 directions, that's it. And it do exactly that, go up, and down, go up, then all of a sudden go down again, etc. etc. Unless there is some strong fundamental trend that somehow let the market go straight in a particular direction (and that is a money making opportunity!),...
tunera, the esoteric talking I was referring to was the general sayings about trading we all read a hundred times. In contrast to this Sys.phus gave some hard statistics about the success of this chart pattern which is something I am still looking for. When you now know there is something that is profitable you can apply all the esoteric advice to make money with this pattern but not the other way round. But I dont know what what exactly he meant with the successrate. Even a 90% hitrate can make you lose if the losers are far bigger than your wins.
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