No one can forecast the direction of a trend, it’s a paradox | Forex Factory

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No one can forecast the direction of a trend, it’s a paradox

  • #1
  • First Post: Apr 5, 2017 9:53am Apr 5, 2017 9:53am
THE TURN OF AN END OF A TREND IS the main problem of paradox i think.
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  • #2
  • Apr 5, 2017 9:58am Apr 5, 2017 9:58am
What's the purpose of this thread, my fellow human? To ramble on about something that has been uttered millions of times here already?
"Don't lose your cool, and you will fare well".
  • #3
  • Apr 5, 2017 10:01am Apr 5, 2017 10:01am
That's why Forex trading is a beautiful art.
  • #4
  • Apr 5, 2017 12:13pm Apr 5, 2017 12:13pm
We do not try to forecast trends. Instead, we partake in trends that we have recognized and trade in that direction from the beginning to the end. While approval of a trend’s presence is explored through a variety of analytical measures, no one can identify a trend’s start or end until it becomes a subject of a record.
  • #5
  • Apr 5, 2017 3:54pm Apr 5, 2017 3:54pm
Why would you sell when your 5+ waves into price movement?
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Learn, a forex trader must, unlearn and relearn he will.
  • #6
  • Apr 5, 2017 9:18pm Apr 5, 2017 9:18pm
Quoting COGSx86
Why would you sell when your 5+ waves into price movement? {image}
the wave i draw means nothing, just show a downtrend thank you.
  • #7
  • Apr 5, 2017 9:21pm Apr 5, 2017 9:21pm
Quoting diana91
What's the purpose of this thread, my fellow human? To ramble on about something that has been uttered millions of times here already?
a good system must have lose trade this is not a ashamed thing, but if some one dont admire any losing , he must brag
  • #8
  • Apr 5, 2017 10:10pm Apr 5, 2017 10:10pm
Quoting liunliun
THE TURN OF AN END OF A TREND IS the main problem of paradox i think. {image}

You cannot predict when Smart Money will Stop Selling or Stop Buying.

You don't need to just follow the Price when they Stop Selling BUY when they Stop Buying SELL you will only be wrong once in every Trend.

The next thing is being able to spot a Balanced Market early so you aren't being bounced around like a rubber ball.
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  • #9
  • Apr 5, 2017 10:14pm Apr 5, 2017 10:14pm
Quoting stevepatt
{quote} You cannot predict when Smart Money will Stop Selling or Stop Buying. You don't need to just follow the Price when they Stop Selling BUY when they Stop Buying SELL you will only be wrong once in every Trend. The next thing is being able to spot a Balanced Market early so you aren't being bounced around like a rubber ball. {image}
yes man ,this is what i mean,but people who learn the system doesn't admire any mistake that make me sad.
  • #10
  • Apr 5, 2017 10:51pm Apr 5, 2017 10:51pm
Quoting liunliun
{quote} yes man ,this is what i mean,but people who learn the system doesn't admire any mistake that make me sad.

Hi Liun,

It's about finding a set of rules that are easy to follow and repeatable.

As long as you make no mistakes following your set of easy rules you will succeed, but you will have Losing Trades
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  • #11
  • Apr 6, 2017 2:18am Apr 6, 2017 2:18am
Quoting liunliun
{quote} the wave i draw means nothing, just show a downtrend thank you.
Ah but waves do show the strength or weakness of the move and exhaustion of price continuing that movement.

The point was to show that when price has reached 5+ waves in a movement it becomes a much lower probable trade to continue to trade the trend and a trader should avoid these movements. Sorry I wasn't clear.

have you heard of "Elliott wave principle"? It is a way for determining the strength or weakness of price movement in a trend before you will see a retracement or reversal.
Learn, a forex trader must, unlearn and relearn he will.
  • #12
  • Apr 6, 2017 5:54pm Apr 6, 2017 5:54pm
I think with basic technical analysis, you can forecast the change in a trend with a small degree of success. With advanced technical analysis, this is more likely. Including trend lines, elliott wave, hurst theory, etc. would put you in a rather good position to forecast trends successfully. Drawing simple trend lines alone, however, won't do much.
  • #13
  • Apr 6, 2017 9:34pm Apr 6, 2017 9:34pm
Forex cannot be predicted with any long term accuracy. There are some patterns. They work sometimes. Sometimes they don't work. You're all wasting your lives.
  • #14
  • Apr 6, 2017 10:11pm Apr 6, 2017 10:11pm
If we define analysis as :
A detailed examination of the elements or structure of something, typically as a basis for discussion or interpretation

And we understand the analytical process as four steps (minus one):
Gather Facts
Create Findings
Make a forecast
But do not be a fortuneteller


Analysts should begin with confirmed facts, apply expert knowledge to produce plausible but less certain findings, and even forecast, when the forecast is appropriately qualified. Analysts should not, however, engage in fortunetelling that has no basis in fact.

So, Looking at Forex through this lens the previous posters are right... Prediction is not possible because that would be fortunetelling... No one can predict the movement. Forex can be forecasted, but only with a percent chance of success. Looking at things this way we must think, as the great Mark Douglas put it, probabilistically. Read, "Trading in the Zone" by Mark Douglas. There are 5 key tenets of a probabilistic mind. They are:

1- Anything can happen
2- You don't need to know what is going to happen to make money
3- There is a random distribution between wins and losses for any given set of variables that define an edge
4- An edge is nothing more than an indication of a higher probability of one thing happening over another
5- Every moment in the market is unique
  • #15
  • Apr 22, 2017 8:42pm Apr 22, 2017 8:42pm
What determines a profitable trade is not why you buy or sell, it's when you get out.
The paradox is that the entry doesn't mean a thing, because what actually makes the trade profitable, is what happens after you enter the market.

And you don't know what market type you are in, until you are in it :-)
  • #16
  • Apr 22, 2017 9:09pm Apr 22, 2017 9:09pm
Quoting Grabowski
What determines a profitable trade is not why you buy or sell, it's when you get out. The paradox is that the entry doesn't mean a thing, because what actually makes the trade profitable, is what happens after you enter the market. And you don't know what market type you are in, until you are in it :-)
Hi Grambowski, I can't figure how you rationalize that. When you enter is half of the story - you can't just jump in whenever unless you're prepared to weather the consequence of such a move, which is drawdown. Accepting large or unlimited drawdown can be interpreted as the very definition of high risk as there is no guarantee the market will eventually reverse. Your goal as a trader should be to sell at the top and buy at the bottom, always, and figuring out how to do that is a huge chunk of the journey. Once you find high probability places to enter that offer low or no drawdown, then it is time to solve the other half of the puzzle in choosing an exit point.
  • #17
  • Apr 22, 2017 9:19pm Apr 22, 2017 9:19pm
Quoting Kanzler
{quote} Hi Grambowski, I can't figure how you rationalize that. When you enter is half of the story - you can't just jump in whenever unless you're prepared to weather the consequence of such a move, which is drawdown. Accepting large or unlimited drawdown can be interpreted as the very definition of high risk as there is no guarantee the market will eventually reverse. Your goal as a trader should be to sell at the top and buy at the bottom, always, and figuring out how to do that is a huge chunk of the journey. Once you find high probability places...
Hi Kanzler, what makes a trade profitable? what happens after you enter the market. I did not mention anything about position sizing in my post and I didn't say you should let your losers run.
You obviously found something that works for you, and our approaches are very different, but you don't have to be right 50% of your trades to make money in the markets.
  • #18
  • Edited 9:47pm Apr 22, 2017 9:33pm | Edited 9:47pm
Quoting Grabowski
{quote} Hi Kanzler, what makes a trade profitable? what happens after you enter the market. I did not mention anything about position sizing in my post and I didn't say you should let your losers run. You obviously found something that works for you, and our approaches are very different, but you don't have to be right 50% of your trades to make money in the markets.
Totally agree that you don't have to be right 50% of the time, you can be right far less. However I didn't say anything about position sizing, I'm just making the point that if you don't pick your entry carefully you will by logical extension experience drawdown or "paper" loss. If you have a set price where you know you are wrong and you find that drawdown acceptable compared to what you expect to earn if you are right, then I guess that's fine. But far too many people choose to jump in the market and when it doesn't go their way, the goal is hope and pray. They get used to this because they're trading based on a crossover or some other technical indicator that really doesn't give them a logical way of determining when they have made a mistake, because these methods are based on voodoo, not base market mechanics of buying and selling. Sometimes that temporarily works, but it will guarantee bankruptcy. It's just illogical to say choosing your entry is not important, because the entry point is what determines how much risk you incur before you know you are wrong and stop out for whatever risk tolerance you have set.

Which of these two trades would you rather have been in, which had less risk? Both of them made target, but the obvious answer should be the one with less risk of taking a hit on your bank account. Trading like the first picture is crazy!


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  • #19
  • Apr 23, 2017 5:39am Apr 23, 2017 5:39am
Kanzler,
I know we might not agree on this, but to me Technical Analysis is kind of voodoo to me. The reason why, is that you are trying to predict something based on the past, to continue in the future.
Humans are very good at seeing patterns that aren't really there, and if you create a complete random chart, your mind instantly draw S/R, channels and all kind of things, that has never been proven to work, just like voodoo. I'm not saying TA and PA doesn't work, all I'm saying is that perhaps the reason why it works is because of your high risk:reward or how you manage your trades.

At the end of the day, it doesn't matter what you trade. The results justify the means.
  • #20
  • Apr 23, 2017 5:40am Apr 23, 2017 5:40am
it's all about the probability, the question you should ask is not if it can be forcasted or not,
but what are the probability the trend will reverse?
if you think it is a higher chance in percentage than the winrate of your method,
if your hit rate is 50% then if you use 2:1 reward to risk, you only need to be right more than 25% to brake even,
so if you then think it is a 26% chance it will reverse, you should trade it and even be happy if you get stopped out because you would win in the long run,
nobody really know for sure unless you can push the market will millions of lots, then you know for sure
Bulls are stupid Animals!especially when Im short!
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