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Random Walk (The unbeatable!)

  • #101
  • Apr 5, 2017 1:28pm Apr 5, 2017 1:28pm
Quoting Cobra
{quote} And that is the beauty of high probability systems..... Few will find it useful and they will apply it to their advantage.... Some will use it and start tweaking it until they lose interest....... Some does not really make an effort to understand it and rejects it with his first post..... To some it is simply not a system...... Some others wants to be spoon fed and gets frustrated if things do not work out for them.... Most traders does not want to do "screen time" and will never have an understanding of how the markets work......
I will have to agree with all your statements. What you are saying is so true and very unfortunate for those who don't want to understand...Chasing a dream or utopia that will never happen unless you work very hard at it....

Good Luck, my friend.....
  • #102
  • Apr 5, 2017 1:38pm Apr 5, 2017 1:38pm
Quoting GoldTheHun
{quote} Here is a trade I took today. By the way I only trade futures, with a futures broker. I also use MT4 for technical analysis and coding of indicators. We were only 40 minutes into the live trading session of emini sp500. The priceaction already hit the W1Sup0, with the daily range already 20 (generally hovers around 14.5). With still 4 hours to go in the session this upward thrust could not have gone on. So I shorted at W1Sup0. I have put the take profit at D1Res0 (which is Fib 100). As you see on the pic it worked perfectly. If the price...
GoldTheHun,

Thanks for taking the time to post the analysis for your trade...

One follow up question i have is:

My understanding is the Support and Resistance Lines offer a 24 HR trading window/opportunity. Within the 24 hour period, the market could show different faces of trend depending on the time frames....

5Min*288
15Min*96
1HR*24
4HR*6

An uptrend on a 15 Min TF could be pullback on a hourly...

Also,The more i see, a trend/drift would yield results if it was defined in terms of market structure, case in point: Your example: Using ADR and mapping it to the Support or resistance...

I want to fix on a method of defining trend {which is the confusion part for me} and get onto the business of putting in the screen time...


In this sense, could you advise on the framework?

Thanks
  • #103
  • Apr 5, 2017 2:01pm Apr 5, 2017 2:01pm
Quoting aaven
{quote} GoldTheHun, Thanks for taking the time to post the analysis for your trade... One follow up question i have is: My understanding is the Support and Resistance Lines offer a 24 HR trading window/opportunity. Within the 24 hour period, the market could show different faces of trend depending on the time frames.... 5Min*288 15Min*96 1HR*24 4HR*6 An uptrend on a 15 Min TF could be pullback on a hourly... Also,The more i see, a trend/drift would yield results if it was defined in terms of market structure, case in point: Your example: Using...
Hello aaven,

Welcome for the analysis of the trade. It was just a sample of one way the levels have to be used. I am sure you can probably find hundreds more...

Since we are concentrating on the current day, finding the trend does not depend on time frame. We have to focus on today, that means looking at the daily time frame first. Does it show a short or a long stance? Take a look at last 20 or 30 days. Prices want to go down or up? When prices don't want to to certain direction the volatility drops towards that direction and picks up steam when going towards the opposite direction.
These are just to name a few pointers. I am sure other traders might have better view of the trend.

The levels are not ADR mapping at all. The are purely done on 5 minute closes volatility. They seem to hover around ADR, because the ADR consists of 288 of 5 minute bars. This means that random walk theory works.

Honestly I do not have a solid method for a trend. Believe me I have checked and tested so many methods to define the trend, but unfortunately they all failed at one point or another.

My best advise would be to watch watch watch (which is what I do). Also I look at the options data at CME website to see if there are huge open interests at one price.

I hope this much helps. Please feel free to ask anything.

Good luck...
  • #104
  • Apr 5, 2017 2:08pm Apr 5, 2017 2:08pm
Quoting aaven
{quote} GoldTheHun, Thanks for taking the time to post the analysis for your trade... One follow up question i have is: My understanding is the Support and Resistance Lines offer a 24 HR trading window/opportunity. Within the 24 hour period, the market could show different faces of trend depending on the time frames.... 5Min*288 15Min*96 1HR*24 4HR*6 An uptrend on a 15 Min TF could be pullback on a hourly... Also,The more i see, a trend/drift would yield results if it was defined in terms of market structure, case in point: Your example: Using...

One more important point aaven. In my personal view trading forex is the hardest of all.
The pairs are all interconnected to one another. If 1 moves, connected ones have to move. So you do analysis on 1 pair, but the movement of another pair totally screws this analysis up.
I suggest everybody to trade cfds (non currency) or futures...Nothing else, not even spot gold. If you want to trade metals choose the cfds only..
Thats my 2 cents...
  • #105
  • Apr 5, 2017 2:30pm Apr 5, 2017 2:30pm
Quoting GoldTheHun
{quote} Hello aaven, Welcome for the analysis of the trade. It was just a sample of one way the levels have to be used. I am sure you can probably find hundreds more... Since we are concentrating on the current day, finding the trend does not depend on time frame. We have to focus on today, that means looking at the daily time frame first. Does it show a short or a long stance? Take a look at last 20 or 30 days. Prices want to go down or up? When prices don't want to to certain direction the volatility drops towards that direction and picks up steam...
Thanks GoldTheHun for the great insight... It is much appreciated...
  • #106
  • Apr 5, 2017 2:34pm Apr 5, 2017 2:34pm
Quoting aaven
{quote} Thanks GoldTheHun for the great insight... It is much appreciated...
You're always welcomed...

Have a good one...
  • #107
  • Apr 5, 2017 2:35pm Apr 5, 2017 2:35pm
Quoting GoldTheHun
{quote} One more important point aaven. In my personal view trading forex is the hardest of all. The pairs are all interconnected to one another. If 1 moves, connected ones have to move. So you do analysis on 1 pair, but the movement of another pair totally screws this analysis up. I suggest everybody to trade cfds (non currency) or futures...Nothing else, not even spot gold. If you want to trade metals choose the cfds only.. Thats my 2 cents...
GoldTheHun

Could you please clarify:

"Suggest everybody to trade cfds (non currency) or futures...Nothing else, not even spot gold. If you want to trade metals choose the cfds only"

When you say trade cfds(non currency), is it equity like stocks/shares of company? What does trading Futures or CFD's offer in terms of advantage?

Thanks
  • #108
  • Apr 5, 2017 2:54pm Apr 5, 2017 2:54pm
Quoting aaven
{quote} GoldTheHun Could you please clarify: "Suggest everybody to trade cfds (non currency) or futures...Nothing else, not even spot gold. If you want to trade metals choose the cfds only" When you say trade cfds(non currency), is it equity like stocks/shares of company? What does trading Futures or CFD's offer in terms of advantage? Thanks
I am talking about index cfds (not individual stocks).
To name a few
SP500
DAX
NASDAQ
DOW
Metals (cfds only)
FTSE

CFDs::::::::::::::
You can follow the quotes on other sources on the web easily. Very hard to spike on purpose (like some brokers do).
In forex there is no fractional lots on interbank markets, but all the retail brokers offer fractional lot sizing. Which means they are not hedging at all. They are all market makers meaning conflict of interest (you lose, they win).
Cfds on the retail brokers are same also (they are market makers). But you can check the tick by tick prices through another source, hard for them to play with the prices.

FUTURES:::::::::::
Open market, totally transparent. You see the orderbook, quantity of buy and sell orders on each price level. Lower margin. Disadvantage only round lots trading 1, 2, 5 etc.. No fractions.. No hedging.. First in first out rule.
When you lose money you know it is you, no other hand intervening...

Just to name a few that I can recall...
Hope it helps...

Good Luck...
  • #109
  • Apr 5, 2017 3:19pm Apr 5, 2017 3:19pm
you are pretty close but haven't figured it out yet though with this prob system. ))) Good advice on the cfds via currencies though, or even plain equities much better option for long-term account survival.
  • #110
  • Apr 5, 2017 3:21pm Apr 5, 2017 3:21pm
Quoting asgcorp
you are pretty close but haven't figured it out yet though with this prob system. ))) Good advice on the cfds via currencies though, or even plain equities much better option for long-term account survival.
Thank you for your input asgcorp...

Good Luck....
  • #111
  • Apr 5, 2017 3:28pm Apr 5, 2017 3:28pm
you can say that you figured markets out when you can pinpoint exact price levels and probability of price hitting this level one week ahead of time. seek and you shall find.
  • #112
  • Apr 5, 2017 3:37pm Apr 5, 2017 3:37pm
problem with traders nowadays that everyone just wants a get rich fast scheme and put least effort into it. Just buy weekly call options in Facebook stock and become a millionaire overnight. ))) Won't work like that.

Anyway nice thread, just keep in mind if markets were random than you won't have guys like Jim Simmons @ Ren Tech managing closed 20 bln USD+ fund with 40% returns pretty much every year since inception in mid 80s. So yeah, markets are random, unless you can figure out certain patterns which are coded inside.
  • #113
  • Apr 5, 2017 3:40pm Apr 5, 2017 3:40pm
Quoting GoldTheHun
{quote} I am talking about index cfds (not individual stocks). To name a few SP500 DAX NASDAQ DOW Metals (cfds only) FTSE CFDs:::::::::::::: You can follow the quotes on other sources on the web easily. Very hard to spike on purpose (like some brokers do). In forex there is no fractional lots on interbank markets, but all the retail brokers offer fractional lot sizing. Which means they are not hedging at all. They are all market makers meaning conflict of interest (you lose, they win). Cfds on the retail brokers are same also (they are market makers)....
Great Inputs GoldTheHun... Really quick response...

1.So if we trade CFD's on currencies, we can rest assured the shenanigans by brokers are put in check? {I read somewhere that they have some sort of plugin or program that will spike price which will be visible only the terminal but there won't be any spike on the real price...something along the lines}...

A real nugget of gold you have given.

2." In forex there is no fractional lots on interbank markets, but all the retail brokers offer fractional lot sizing. Which means they are not hedging at all."

Is it a normal practice for brokers/entities that deal in InterBank markets to hedge their positions? Is the hedging done via some other instruments like gold/indices or derivatives or some other medium?


Thanks
  • #114
  • Apr 5, 2017 3:46pm Apr 5, 2017 3:46pm
Quoting asgcorp
you can say that you figured markets out when you can pinpoint exact price levels and probability of price hitting this level one week ahead of time. seek and you shall find.
Asgcorp,

From what you said, it is a reasonable guess that you can pinpoint exact price levels ahead of time...I am not trying to pry your egde.

Could you shed some light on what characteristic/behavior of market lends to its predictability?

Random Example of characteristic/behavior : Liquidity, Some Hedge Fund/Entity needing to fill a X Lot Size and requires a week to do that and within a price range before commencing it's move etc....

Thanks
  • #115
  • Apr 5, 2017 3:51pm Apr 5, 2017 3:51pm
"problem with traders nowadays that everyone just wants a get rich fast scheme and put least effort into it. Just buy weekly call options in Facebook stock and become a millionaire overnight. ))) Won't work like that."

%100 correct...

"Anyway nice thread"

Thank you for the positive comment...

"
just keep in mind if markets were random than you won't have guys like Jim Simmons @ Ren Tech managing closed 20 bln USD+ fund with 40% returns pretty much every year since inception in mid 80s. So yeah, markets are random, unless you can figure out certain patterns which are coded inside."

The markets are random %70 of the time, then they pick up towards the direction that they intend to go. Then they are no random at all..
So my personal view is that I can make money during the %70 of the time, and stay away the rest of the time. When the real trending starts it is very hard to know where it will end. In trading entry is the easiest part, exits are the hardest..This is my personal view of course...

Thanks once again for your input..

Good Luck...
  • #116
  • Apr 5, 2017 3:54pm Apr 5, 2017 3:54pm
aaven I don't have that edge over the market otherwise you won't see me posting around here I guess )) Still getting there.

But part of the edge is seasonality and it's not FX only. Then again there would be only a few who can dig deep enough into this to actually be able to profit from this, it's not just buying Apple stock before new IP presentation in September. )))
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  • #117
  • Apr 5, 2017 3:54pm Apr 5, 2017 3:54pm
Quoting GoldTheHun
"problem with traders nowadays that everyone just wants a get rich fast scheme and put least effort into it. Just buy weekly call options in Facebook stock and become a millionaire overnight. ))) Won't work like that." %100 correct... "Anyway nice thread" Thank you for the positive comment... " just keep in mind if markets were random than you won't have guys like Jim Simmons @ Ren Tech managing closed 20 bln USD+ fund with 40% returns pretty much every year since inception in mid 80s. So yeah, markets are random, unless you can figure out certain...
Thanks a Lot GoldTheHun...
  • #118
  • Apr 5, 2017 3:58pm Apr 5, 2017 3:58pm
Quoting aaven
{quote} Great Inputs GoldTheHun... Really quick response... 1.So if we trade CFD's on currencies, we can rest assured the shenanigans by brokers are put in check? {I read somewhere that they have some sort of plugin or program that will spike price which will be visible only the terminal but there won't be any spike on the real price...something along the lines}... A real nugget of gold you have given. 2." In forex there is no fractional lots on interbank markets, but all the retail brokers offer fractional lot sizing. Which means they...
Thanks aaven...

When I said hedging I meant they should pass your order to interbank in order to avoid risk and keep their spread difference as a profit( be a real broker). But unfortunately this does not happen with the retail brokers. They keep all of it. Thats why all those expert advisors that show profit during backtesting fail big time in real trading. Slippage, spikes, delayed quotes etc etc...
There is no chance left for the retail forex trader to make money. Sooner or later you will fail.
This is my view of course...

Good Luck...
  • #119
  • Apr 5, 2017 4:00pm Apr 5, 2017 4:00pm
GoldTheHun yeah some valid points in there, taking profits in equities though is much easier compared to FX. Trends don't change that often but start of new periods, i.e. month/quarter is a good reference point cause funds will reshuffle their portfolios and you can spot valid entry and exit points before market will turn. Funds will trim exposure to stocks that did well in previous quarter/month and take profits.

Same deal with AMD/NVDA stock right now, pretty much had an awesome run in 2016 both names up over 250% for the year, most likely topped out for this cycle and funds took profits but there are still desperate souls going all-in looking for another 250% run in 2017, that's called greed.

Point is if a stock is up 250% last year chances are it won't be going anywhere this year.
  • #120
  • Apr 5, 2017 4:07pm Apr 5, 2017 4:07pm
Quoting asgcorp
GoldTheHun yeah some valid points in there, taking profits in equities though is much easier compared to FX. Trends don't change that often but start of new periods, i.e. month/quarter is a good reference point cause funds will reshuffle their portfolios and you can spot valid entry and exit points before market will turn. Funds will trim exposure to stocks that did well in previous quarter/month and take profits. Same deal with AMD/NVDA stock right now, pretty much had an awesome run in 2016 both names up over 250% for the year, most likely topped...
asgcorp,

Thanks for your input, bu unfortunately I do not follow individual stocks or options. I only follow the indices and trade futures only. It looks like you are knowledgeable in stocks area (obviously more then me) you should stick with it. I believe every trader should trade what they know.. With endless capital out there, scraping the bones is more than enough for a retail trader...

Good Luck...
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