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  • #21
  • Edited 2:09am Apr 21, 2016 1:54am | Edited 2:09am
Quoting dancingphil
The better question is WHICH INDICATOR/S ARE SUCCESSFUL.
Yup, you're really kidding.

Quoting dancingphil
Ranging market conditions are 85% of the time; so trending EAs will fail 85% of the time. Ditto but in reverse for ranging market EAs.
Hear hear, ranging market EAs work 85% of the time.

Quoting dancingphil
Success means NOT losing. The trading system I mentor in uses an EA that sets BE (Break Even) + 1 pip at 5 pips profit. In the classic "The Richest Man of Babylon", Rule 1; protect your capital, don't lose it. Hence my systems rule of setting BE+1 at 5 pips profit so that as best as possible, money cannot be lost.
"BE (Break Even) + 1 pip at 5 pips profit" - can you tell us how many times the market took your SL before making a large move in your trade direction ?
  • #22
  • Edited 6:36am Apr 21, 2016 3:43am | Edited 6:36am
Quoting swissyking
1) What is more important, technical or fundamental in a trading strategy? and why?
If a trader has a talent for technical analysis and it makes him money, then to that trader, technical analysis is more important. Likewise if the trader has a talent for fundamentals.

Every trader's (winning) edge is different and usually unique to the individual.

Quoting swissyking
2) Do you think behavioral finance (psychology of the trader) affects the strategy he/she is following?
Insofar as it pertains to a trader's attitude towards risk, yes. But let's be clear: you can be risk-averse and make money; you can also be risk-gung-ho and make money. It all boils down to the individual trader's edge.

Quoting swissyking
3) Are indicators necessary for a successful trading strategy?
No. Some might say that answer conflicts with my answer to Question 1 vis-a-vis technical analysis talent. To me, if a self-described "technical analyst" relies heavily on indicators to generate signals, then he's not really conducting technical analysis. He will come to grief when his indicator stops "working".

Quoting swissyking
4) How do you know when a forex trading strategy stops working?
A strategy is not an engine that can suddenly stop working. To me, if a trader consistently fails at a strategy, it's either because the strategy was wrongly suited to his risk-taking profile or wrongly suited to his personal circumstances in the first place (his availability to trade particular timezones, for example), or both.

The strategy itself (no matter how stupid it may sound to its detractors) is usually blameless.

Quoting swissyking
5) Do fundamentals affect technical and if so why?
My two cents: fundamentals do not "affect" technicals (much). Fundamentals "influence" bank traders in speeding things up or slowing things down but ultimately bank traders are heavily guided by past order flow history (whether they want to admit it or not) and bank traders will in turn affect the market (for now).

Technical analysis tells the story.

Quoting swissyking
6) Why are indicators criticized?
This is a loaded question i.e. it assumes that indicators ARE criticized i.e. I can always say "they are not". If my old project paper supervisor caught me asking it without proof, he'd tell me to re-write it.

Perhaps you should just outline YOURSELF why indicators are criticized, and then ask if the arguments are justified.

I have no answer, except to say that indicators are frequently (wrongly) used to generate signals instead of to aid analysis.

Quoting swissyking
7) Does discipline plays a big role in a successful trading strategy?
Yes.

Quoting swissyking
8) Does the success rate rely on the fact that a trading system must give more or less signals in a week? Generally speaking
It is not a proven "fact" that a "system" MUST generate more or less signals in a week. In any case, my answer is No (generally speaking).

Quoting swissyking
9) What do you think should be or is the key characteristics of a winning trading system?

  1. When it makes money for the trader who designed and practiced it in the timeframe he is gunning for (whether medium term or long term) as part of a sensible equity-building programme. In other words, if he's thinking of trying to regularly put food on the table (i.e. targeting the short term), it is my guess he will be be frequently disappointed.
  2. When the "system" is robust and remains in pristine condition from inception to the present i.e. the system's author does not change the parameters of the strategy just because of drawdowns that were taken in strict observance of the strategy's original rules.
  3. (my primary assumption: that even the most stupid-sounding strategy can be turned in a "winning" one, and that it is the trader who makes the system stop "winning")

I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #23
  • Edited 11:36am Apr 21, 2016 5:48am | Edited 11:36am
A renowned academic freelancer can help you write and complete this task. You can contact him .
{ email address deleted by staff }
  • #24
  • Apr 21, 2016 6:17am Apr 21, 2016 6:17am
Quoting swissyking
Hi guys, Im a university student in my final year doing my dissertation, it is a research project, the title of the project is: "Identifying key characteristics of a winning forex strategy" I have made some questions to be answered by some experienced and some intermediate experienced trader. It is a questionnaire to see what is a common answer amongst traders, and ultimately gain an understanding as to what actually is the key characteristic of a winning forex strategy. I will make a new post on this, and I will be very very grateful if you can...
Hello Swissy. Intriguing Thesis. I dropped my opinion below..

1) What is more important, technical or fundamental in a trading strategy? and why?

It depends on what youre doing. There are a hundred million profitable ways to trade. If your strategy depends on the value of government bonds and interest rates then Fundamentals might be more useful to you; if, however, youre front-running others orders, the metrics that matter to you should be substantially different.

2) Do you think behavioral finance (psychology of the trader) affects the strategy he/she is following?

Sure, whatever you do in life is a product of how you think; Trading or otherwise.

3) Are indicators necessary for a successful trading strategy?

No. Again, depends on what youre doing.

4) How do you know when a forex trading strategy stops working?

How did you know it was working in the first place? Consider what convinced you initially.

5) Do fundamentals affect technical and if so why?

Yes, if we assume that fundamentals drive the value of currencies and the volumes traded on the time scale for which the technical studies are applied.

6) Why are indicators criticized?

Because most indicators don't reliably forecast the future...and forecasting is how a lot solve the profitable trading strategy problem.

7) Does discipline plays a big role in a successful trading strategy?

No..or Yes..you'd have to let us know what the trader is doing.

8) Does the success rate rely on the fact that a trading system must give more or less signals in a week?

Signal frequency doesn't matter in absolute terms. There are profitable High Frequency Traders, there are profitable Long Term Trend Following Systematic Macro Traders who maybe do 8 good trades in a year.

9) What do you think should be or is the key characteristics of a winning trading system?

First, you must find repeatable behavior in price and/or volume and/or traders and/or trading infrastructure and/or underlying market conditions.
Then, you'll need to devise a means to exploit it systematically.

Hope that helped.
  • #25
  • Apr 21, 2016 9:15am Apr 21, 2016 9:15am
Quoting hanover
{quote} Agree with Rtm, dancingphil's comments are right on the money. All I would add is: 1) What is more important, technical or fundamental in a trading strategy? and why? Nothing to add, Phil nails it perfectly IMO. 2) Do you think behavioral finance (psychology of the trader) affects the strategy he/she is following? Yes, markets are ultimately the product of a collection of different belief systems, and psychology has a bearing on the way that each trader frames his beliefs about the market, and then places his orders accordingly. The more...
Hi,
thank you for taking some of your time in helping me out, and yes i will, there are a lot of members here that have a a deep understanding of forex!
  • #26
  • Apr 21, 2016 9:18am Apr 21, 2016 9:18am
Quoting numbnuts
{quote} Both, but it depends on the strategy and where the trader is achieving his edge. If the trader is a quant freak trying to gain an advantage through superior technical studies, that is more important. If the trader has a genuine interest in macroeconomics and is trying to use that to his advantage, fundamentals are more important. 2) Do you think behavioral finance (psychology of the trader) affects the strategy he/she is following? Yes, we generally enjoy doing things that we think we are good at. Confirmation bias also plays a part .......
Hi,
thank you for the insightful information, this will be great towards my dissertation, most likely i will be posting it once i finish it, it is an academic piece of work. wish me luck, and thanks for dedicating some of your time.
  • #27
  • Apr 21, 2016 9:22am Apr 21, 2016 9:22am
Quoting skenobi
{quote} If a trader has a talent for technical analysis and it makes him money, then to that trader, technical analysis is more important. Likewise if the trader has a talent for fundamentals. Every trader's (winning) edge is different and usually unique to the individual. {quote} Insofar as it pertains to a trader's attitude towards risk, yes. But let's be clear: you can be risk-averse and make money; you can also be risk-gung-ho and make money. It all boils down to the individual trader's edge. {quote} No. Some might say that answer conflicts...
Hi, thank you for dedicating your time, the sole purpose here of the questionnaire is to get a view of forex traders, and sum up by analysing as to what are the KEY characteristics of a winning system, the system itself dont really matter, as long as it posses the identified traits which i will analyse then it should be successful, of course it means following the rules!
  • #28
  • Apr 21, 2016 9:27am Apr 21, 2016 9:27am
Quoting Thoughts
{quote} Hello Swissy. Intriguing Thesis. I dropped my opinion below.. 1) What is more important, technical or fundamental in a trading strategy? and why? It depends on what youre doing. There are a hundred million profitable ways to trade. If your strategy depends on the value of government bonds and interest rates then Fundamentals might be more useful to you; if, however, youre front-running others orders, the metrics that matter to you should be substantially different. 2) Do you think behavioral finance (psychology of the trader) affects the...
Hi,
thank you for the compliment, and thanks for the time you took to help me out.
the only problem is that i do not have enough time or words count (10,000) to actually fully analyse the data i have gathered to show a full comprehensive study of the key characteristics of a winning/successful forex system.
But after my submission i will be taking this on further, and ask potential members of the ForexFactory if they would wast contribute towards this study.
Thanks for the reply though.
  • #29
  • Apr 21, 2016 9:31am Apr 21, 2016 9:31am
Quoting skyway
{quote} Yup, you're really kidding. {quote} Hear hear, ranging market EAs work 85% of the time. {quote} "BE (Break Even) + 1 pip at 5 pips profit" - can you tell us how many times the market took your SL before making a large move in your trade direction ?
Hi,
the sole purpose of the study is to gain a view of different forex traders, and what they individually think are the key traits of a winning forex system.
My job will be to analyse the data and come up with a common theme amongst the traders, furthermore, i will take the study forward to ask insightful questions to get a deeper understanding, only after my completion of the study. hand in date: 11th May.
Thanks for your thought
  • #30
  • Apr 21, 2016 9:32am Apr 21, 2016 9:32am
Quoting swissyking
But after my submission i will be taking this on further, and ask potential members of the ForexFactory if they would wast contribute towards this study. Thanks for the reply though.
Might I suggest that since you are focussing on winning strategies, that for the follow up study, you exclude anyone without a published trade journal and a minimum live trading time/number of trades (6months/2000 trades - something like that). Talk is cheap after all.
  • #31
  • Apr 21, 2016 10:47am Apr 21, 2016 10:47am
Quoting slaughter28
{quote} Might I suggest that since you are focussing on winning strategies, that for the follow up study, you exclude anyone without a published trade journal and a minimum live trading time/number of trades (6months/2000 trades - something like that). Talk is cheap after all.
Hi, thanks,
  • #32
  • Apr 21, 2016 10:49am Apr 21, 2016 10:49am
Dear all,

I would like to say thank you all for contributing, and i have enough now to help me out, but i will put a questionnaire to answer here guys, so please feel free to fill it in, i will make a new thread for it, and i will post it here too!
  • #33
  • Apr 21, 2016 11:29am Apr 21, 2016 11:29am

Hi guys,
Please feel free to answer the below questions to help me analyse the gathered data for my research project, look at the question and answer it by choosing one of the agreements or disagreements, by only writing one of them below the questions.

Key characteristics of a winning forex system

1 – Does the psychology of the trader determine the winning rate of the trader?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
2 – Having end of the week objective or aim help assist the trader towards success?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
3 – Does the ‘personality’ of the individual actually impact the success rate of that person?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
4 – Considering the philosophical thought “ignorance is bliss”, so having less knowledge of the way the market operates, and only knowing how to use the followed strategy, do you think it will increase the success rate?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
5 – In the market, do you think, ‘trend is your friend’?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
6 – Is the ‘Holy Grail’ the way the trader thinks and sees the market?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
7 – Is the ‘Holy Grail’ the trading system the trading is following?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
8 – Are new emerging technical indicators useful?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
9 – Does the use of few indicators compliment the trader’s confidence in taking a trade?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
10 – Can small start-up capital be a disadvantage for the new trader?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
11 – After 4 years of trading experience, does it mean the person is successful?
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
12 – Does back-testing blur the traders live perception of how a ‘set-up’ or ‘exit’ look like? (In a sense that: the back-testing is that past, it’s not live, but in the live trade price is moving consistently, therefore the indicator moves with the live price movement)
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
13 – Do technical indicators give the trader false perception of the market? As they are lagging behind the actual price movement of the market
{C}1. Strongly agree
{C}2. Mediate agree
{C}3. Agree
{C}4. Disagree
{C}5. Mediate disagree
{C}6. Strongly disagree
  • #34
  • Apr 21, 2016 2:38pm Apr 21, 2016 2:38pm
Your cause to learn some stuff is suddenly completely lost with the nonsense of your multiple choice questionnaire.

As I said in my first post to answer you;

"You MUST abandon the belief that the human mind can be mapped as a group in any logical way. We are all wankers; but we all do it in different ways."

There is NO multi-choice questionnaire that can result in anything that could be meaningful.

FIND ANOTHER WAY.

Quoting swissyking
Hi guys, Please feel free to answer the below questions to help me analyse the gathered data for my research project, look at the question and answer it by choosing one of the agreements or disagreements, by only writing one of them below the questions. Key characteristics of a winning forex system 1 Does the psychology of the trader determine the winning rate of the trader? {C}1. Strongly agree {C}2. Mediate agree {C}3. Agree {C}4. Disagree {C}5. Mediate disagree {C}6. Strongly disagree 2 Having end of the week objective or aim help assist the...
  • #35
  • Apr 21, 2016 3:09pm Apr 21, 2016 3:09pm
1. I'd say technical. Everything you need to trade successfully is right on the chart in front of you, you just have to decode it.

2. In my experience, the ratio between strategy/psychology is 25/75. Someone can make money from a strategy which barely breaks even if they follow it like an emotionless robot. On the flip side, you can have a technique which ought to win you 75% or more of your trades, but you keep sabotaging yourself due to fear, greed, revenge, desire to avoid uncertainty etc.

3. Absolutely not. Supply/demand analysis (with a number of enhancements to the theory) and key SR are all you need. The only tools required for this - a rectangle and a line.

4. If you are reading the charts in the correct fashion, in terms of key S/D levels and trying to get into the psychology of the banks and how they like to play tricks on the masses, it won't stop working. This is the fundamental way in which any market operates.

5. Fundamentals drive the movement of the currencies, which shows up on the charts, the after effects of which you can then analyse technically, so yes.

6. Most indicators in one form or another operate on a basis of statistical probability - mean reversion after a period of over-extension. This would work fine if the markets were random, but they're not. The banks are also not stupid - they know a vast number of people use common indicators, and this gives them opportunity to play tricks based on this fact.

7. It's the single most critical factor, unless you've managed to find something statistically based which can be coded into an EA. This is far from easy.

8. Quality over quantity. Patience is a key skill in the markets, to recognise your edge, levels you know have a very chance of bouncing price, and then waiting for them. The more entries you take in between these places, the lower the odds of them working. A sniper rifle is preferable to a shotgun in trading.

9. It needs to be based on the correct approach to technical analysis, namely the interplay of supply & demand and how this leaves its footprint on the chart which can be read, and also trying to anticipate the tricks that the banks like to play on the herd.
  • #36
  • Apr 21, 2016 3:12pm Apr 21, 2016 3:12pm
Quoting dancingphil
Your cause to learn some stuff is suddenly completely lost with the nonsense of your multiple choice questionnaire. As I said in my first post to answer you; "You MUST abandon the belief that the human mind can be mapped as a group in any logical way. We are all wankers; but we all do it in different ways." There is NO multi-choice questionnaire that can result in anything that could be meaningful. FIND ANOTHER WAY. {quote}
Hi,
I fully acknowledge what you mean, but the point of a the questionnaire is to get an understanding of the way traders operate, this will allow one to gain valuable insight the way traders sees some characteristics of trading
  • #37
  • Apr 21, 2016 3:28pm Apr 21, 2016 3:28pm
Quoting Hoodlum
1. I'd say technical. Everything you need to trade successfully is right on the chart in front of you, you just have to decode it. 2. In my experience, the ratio between strategy/psychology is 25/75. Someone can make money from a strategy which barely breaks even if they follow it like an emotionless robot. On the flip side, you can have a technique which ought to win you 75% or more of your trades, but you keep sabotaging yourself due to fear, greed, revenge, desire to avoid uncertainty etc. 3. Absolutely not. Supply/demand analysis (with a number...
Hi, thanks for the insightful view, this will be added to my analysis, i will be posting the outcome when i can
  • #38
  • Apr 22, 2016 8:17am Apr 22, 2016 8:17am
I guess i'll leave my 2 cents here.

1) What is more important, technical or fundamental in a trading strategy? and why?
Neither. The importance of a form of analysis is subjective to each trader thus confirming the vacuity of both technical and fundamental analysis.

If observing patterns in the clouds aids one in going long in a bull market and going short in a bear market then that form of analysis is of utmost importance to him.

2) Do you think behavioral finance [Does the] (psychology of the trader) affects the strategy he/she is following?
Yes. Moving on.

3) Are indicators necessary for a successful trading strategy?
One indicator is of critical importance: Price.

I have never seen a profitable strategy that doesn't include price or a derivative of price as a component.

4) How do you know when a forex trading strategy stops working?
The notion that a strategy 'works' stems from the observation that a strategy's performance corresponds with an expectation of the future. People will often remark that a strategy has 'stop working' when the dissonance between performance and expectation reaches a certain emotional threshold. This implies naivete in strategy design.

In my opinion, strategies either work or they don't. If a strategy is said to have 'stopped working' then you never really had a strategy that worked in the first place.

5) Do fundamentals affect technical and if so why?
<Price> affects the <demand for reasons and explanations> which affects the <fundamental reporters and financial news media> which affects the <perceptions of underlying conditions both current and future> which affects <attitudes towards risk> which affects <the intentions of profit-seeking speculators and risk-avoiding hedgers> which affects <collective buying/selling> which affects <supply/demand> which affects <Price> which affects... ad infinitum.

The above is only a shadow of the actual complexity of markets where everything affects Everything. Your question presupposes simple causality. Markets are immensely complex systems that defy such reasoning.

If you wish to understand markets your work may fill volumes. If you wish to make money consider going with the flow.

6) Why are indicators criticized?
Because apparently THEY DONT WORK (refer to 4).

7) Does discipline plays a big role in a successful trading strategy?
Discipline implies a level of emotional control, as if sticking to a system should be an unpleasant process that must be tolerated.

Compatibility between you and your system is attained when you reach a point where you feel naturally obliged to trade it. If you have a positive expectancy and you know it then this isn't a problem.

8a) Does the success rate rely...
Success rate is 100%. Everybody is successful in getting what they want from the market.

8b)that a trading system must give more or less signals in a week?
Do your own research and form your own opinion. If you are extensive enough you may just realize that the question is intolerably asinine.

9) What do you think should be or is the key characteristics of a winning trading system?
I report that certain people have become immensely profitable by trading systems using simple price-based indicators that signal long positions in bull markets and short positions in bear markets while managing risk exposure during times where no such markets are apparent. You may draw your own conclusions from this.
  • #39
  • Edited 4:18pm Apr 22, 2016 2:26pm | Edited 4:18pm
Quoting Atokys
Everybody is successful in getting what they want from the market.
Must admit that I've struggled to see the profundity in Seykota's dictum, even after reading explanations like this. Surely everybody wants, or at least believes that they want, an income from trading -- although very few actually achieve it -- but are overtaken by irresistible subconscious desires (e.g. ego, greed, laziness, resentment, excitement, peer approval, perfectionism, masochism/self-loathing, fear of failure, fear of loss, illusory superiority, complacency, etc). Along with unrealistic expectations and general ignorance.
  • #40
  • Apr 22, 2016 3:45pm Apr 22, 2016 3:45pm
Thanks for the lead David. I'm downloading the Market Wizards audio book now.

Not that I have ever been concerned about the trolls here on FF (actually, my crew and I always have a great laugh when I "go playing with the trolls" here on the forum side of things), but the below does explain them perfectly;

"The trader who barely likes to trade, but loves to post on the forums and racks up thousands of posts in a short amount of time, is getting exactly what he wants. They may lack the social connection in their lives and in their trading and get that want fulfilled by posting on the forums twenty times a day."


Trolls are always easy to spot. Their posts are always very short, and never on topic answering any specific question that has been asked. Rather their retorts are hateful and very short, much like their penis size - which probably is at the core of their anger.

I'll enjoy listening to Market Wizards when the sun comes up, and I begin my long walk.

Quoting hanover
{quote} Must admit that I've struggled to see the profundity in Seykota's dictum, even after reading explanations like this. Surely everybody wants, or at least believes that they want, an income from trading -- although very few actually achieve it -- but are overtaken by irresistible subconscious desires (e.g. ego, greed, laziness, resentment, excitement, peer approval, perfectionism, masochism/self-loathing, fear of failure, fear of loss, illusory superiority,...
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